Our goal here at Credible is to give you the tools and confidence you need to improve your finances. Although we do promote products from our partner lenders, all opinions are our own.
What if college students earned a tuition rebate and textbook stipend as a reward each year they’re able to complete 30 credit hours in good academic standing?
Cleveland State University introduced a Graduation Incentive Plan three years ago that does just that, and saw the number of students taking enough classes to qualify for the incentive jump by 14 percent in 2014.
That’s according Cleveland State President Ronald Berkman, in an opinion piece in The Hill urging Congress to get behind a $2-billion-a-year Pell Grant funding initiative proposed by the Obama administration that would provide incentives for students to finish college faster.
“Students are consumers,” Berkman says. “And consumers respond to incentivization.”
Cleveland State’s Graduation Incentive Plan was aimed at offsetting a 2 percent tuition hike driven by state budget cuts. Other “Student Success” initiatives aimed at helping students stay on track included capping the total credits needed for graduation at 120 hours, offering multi-term registration, and eliminating additional tuition costs for students taking more than 16 credit hours per semester.
Collectively, Berkman says the initiatives have boosted student retention rates to 70.7 percent in 2014, up from 67.2 percent two years before, and 6-year graduation rates, which have climbed from below 30 percent to nearly 40 percent (If that graduation rate seems low, it’s in line with other Ohio schools serving students with comparable ACT scores).
The Obama administration’s proposed “Pell for Accelerated Completion” program would help millions of students spend thousands less on their degree by attending school year-round, and by providing a bonus for those who take a full load of courses each semester.
There’s some thought that students can lay the groundwork for a speedy college degree while still in high school. The Department of Education will soon launch a pilot program that will allow up to 10,000 high school students to use Pell Grants to take college courses.
Getting on a fast track to graduation can reduce college costs, and the amount of student loan debt taken out while in school. Actually obtaining a degree is crucial to being able to pay that debt off.
While it may seem counterintuitive, the more student loan debt students take on, the less likely they are to default — in part because default rates are highest among dropouts, and because holders of advanced degrees have greater earning power.
Taking on a reasonable amount of student loan debt can actually increase the probability that a student will graduate, but there are diminishing returns as the level of debt increases.
Matt Carter <email@example.com> is editor of Credible News. Follow us on twitter @Credible.