WASHINGTON––The Obama administration is set to inject millions
of dollars into a group of cutting-edge education providers to
address a vexing problem: Many Americans are leaving college with
debt but without skills the economy needs.
It is turning to the private sector for help. In a novel
experiment, the Education Department plans to announce Tuesday up
to $17 million in loans and grants for students to undergo training
at eight entities that aren't traditional colleges.
Most of the sites are for-profit companies. They include coding
academies such as New York startup Flatiron School and Oregon-based
Epicodus, as well as websites such as Study.com and StraighterLine
that provide online courses at reduced costs.
The most unusual of the group is corporate behemoth General
Electric Co., which won't receive funds directly but will provide
training at one of its jet-engine plants under the program.
Until now, the half-century-old student aid program has been
restricted to students at community colleges, universities and
trade schools that must first win approval from a regional
accreditor composed of fellow college leaders. The Education
Department said that peer-review system has allowed colleges to
become complacent in shaping curricula to keep up with
technological advances, and that alternative providers can inject
competition into higher education.
The program will let up to 1,500 students in the coming academic
year enroll in a select group of traditional colleges while
undergoing much of their training at the eight nontraditional
providers, ultimately leading to degrees. As with educational loans
for traditional colleges, the grants will be made to students who
will then pay the alternative providers.
The program, called Educational Quality through Innovative
Partnerships, or Equip, is largely designed to enable low-income
Americans to learn skills in areas where colleges often fall short,
such as learning how to write computer code, or using new software
to operate high-tech manufacturing equipment to make jet engines.
Ted Mitchell, the Education Department's undersecretary, said the
program is part of a broader trend, accelerated since the
recession, of colleges turning to employers to learn what skills to
teach.
"It's a must for us to build these kinds of partnerships," Mr.
Mitchell said. "Our economy depends on it."
The program marks a shift in the Obama administration's approach
to higher education. The Education Department has taken a hostile
stance toward for-profit schools, which it has accused of using
deceptive marketing while earning billions in profits off federal
student aid. Some academic experts say that by opening up federal
aid to for-profit companies, the Equip pilot program risks inviting
the same abuses.
Mr. Mitchell said the agency will closely monitor how the funds
are spent, with a "laserlike focus" on whether students find
decent-paying jobs afterward.
Officials point to an economic imperative for change.
Enrollment in higher education just underwent a historic boom,
but the outcomes have been mixed. College enrollment soared 20%
between 2005 and 2010, the biggest increase since the 1970s. Yet
millions of students never graduated, and among those who did, many
couldn't find jobs.
At the typical four-year public college, only 48% of first-time,
full-time students graduate within six years, according to a report
this month by Third Way, a nonpartisan think tank.
Meanwhile, nearly half of all college graduates hold jobs in
fields that don't require their degrees. About 44% of college
graduates are underemployed, according to the Federal Reserve Bank
of New York.
The Equip program is designed to address those issues. Graduates
at coding academies like Flatiron are learning skills in high
demand among employers, and they are quickly finding high-paying
jobs after graduation. Websites like Study.com allow midcareer
professionals to earn credits at their own pace at far lower prices
than charged by traditional schools. Academics say lower costs
increase the likelihood of a student graduating.
The Education Department is conducting the program under a
federal law that allows the agency to temporarily waive legal
restrictions on how federal aid is spent. The agency said the pilot
program will allow future administrations to determine whether to
press Congress to pass legislation to permanently open up federal
student-aid dollars to nontraditional providers.
The Equip sites set to be announced Tuesday include GE, four
coding academies and several companies that provide online courses
in traditional subjects such as English and math at costs far
cheaper than at traditional schools. Education Department officials
say the programs will target students who never went to college and
midcareer workers who are looking to upgrade their skills.
GE's aviation unit will partner with Northeastern University in
Boston to allow students to undergo training at one of the
company's jet-engine facilities while working toward a degree in
advanced manufacturing. Dozens of GE employees will make up the
initial batch of students, the company said. Northeastern President
Joseph Aoun said college instructors will teach courses at the
facility focused on how to use software to operate machines, giving
workers hands-on experience.
Funds from the Equip program will go to Northeastern to cover
tuition, he said, while no funds will go to GE.
Mr. Aoun said the university has for years partnered with
private employers to allow students to get "experiential learning"
on job sites as part of working toward bachelor's degrees. He said
the practice has allowed the school to increase the share of its
graduates who find well-paying jobs after school.
"Other universities are waking up" and determining that teaching
specific, on-the-job skills is a necessary part of a degree, Mr.
Aoun said.
The eight sites under the Equip program are GE, Flatiron,
Epicodus, StraighterLine, Study.com, MakerSquare, Zip Code
Wilmington and Guild Education.
Write to Josh Mitchell at joshua.mitchell@wsj.com
(END) Dow Jones Newswires
August 16, 2016 08:45 ET (12:45 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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