The Race to Graduate: Which Incentives Really Work?

Posted January 2, 2013

Given how important money is to all but the most fiscally privileged of high school and college kids, nobody should be shocked to find out that financial rewards stand as some of the most common incentives when it comes to encouraging heightened graduation rates. Depending on the institution and level, this could mean anything from loan forgiveness to tuition discounts. Tests run by MDRC concluded that the most effective strategies for encouraging students to graduate early or on time all involve addressing their economic concerns. Most of these programs require recipients to maintain a minimum GPA, of course, and grades seem to increase alongside degree completion when money enters the mix. For low-income enrollees especially, these incentives prove particularly viable.

As with all things involving expenditures, providing monetary rewards and incentives, critiques both valid and invalid exist dissecting both overarching efficacy and best practices. One of the most curious, however, peers into issues of development. High school students qualified to graduate early raise questions about whether their emotional maturity complements their academic aptitude. As much as test scores might reflect a heightened chance at collegiate (or even post-collegiate) success, some (but by no means all) students simply aren’t cut out for enrolling until they grow up a little. No definitive test exists for whether they can handle the unique demands colleges require, however, and some express concerns that incentives might end up wasted in some of these instances. Other issues regarding rewards revolve around some packaged with built-in penalties. Students at California State University actively protest the system’s proposals involving paying the school if certain graduation goals go unmet. Ostensibly, levying fines like $91 for every class repeated and $182 for enrolling in more than 18 hours lowers the rate of dropped and overloaded classes. But for the ones paying up, these hefty fees mean additional expenditures in an already crowded budget. Many feel as if such penalties actively hinder the path toward graduating on time and/or with the desired GPA rather than accomplishing their projected goals.

Meanwhile, in the marketplace, employers enjoying comparatively more resources offer up tuition reimbursements in their benefits packages, though usually stipulating relevance to the position, completion, and/or some minimum degree of sticking around following graduation. As of 2008, at least 50% of American companies provide educational perks, though only 15% apply that toward any course workers wish to take. Most people tend to associate this generous benefit with MBAs, but some employers have started adding bachelor’s degrees as well. Employees in San Francisco, Oakland, and Sacramento whose companies offer up tuition waivers can snag online diplomas for free thanks to UniversityNow’s College Works initiative (it only offers a business major so far). Even individuals serving the city of Oakland qualify in a move that certainly pleases local government officials desiring a more educated workforce. Participants cite the online format as ideal when it comes to balancing their lives and their jobs, which so often compromise graduation in more traditional settings.

But it isn’t just college graduates and lucky employees receiving perks for making it through school. Programs such as YesPhilly, based out of the eponymous Pennsylvania city, use art and awards to encourage GED completion. It also incorporates life skill and art training alongside rewards like free laptops in order to prepare participants for higher education. Within the span of 18 months, 30 students finished their high school equivalency exams and 18 went straight on into college. Such preparation directly feeds into the national First in the World initiative that wants an additional 8 million Americans to complete a college degree by 2020 and offers individual states $20 million and $50 million grants if they establish successful strategies meant to bolster the graduation rate. The Department of Education suggests tuition freezes or stabilization and a more streamlined credit transfer system to make college accessible to a wider demographic.

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