Imagine a minority student facing economic hardship beginning his freshman journey to become a first-generation college graduate at a public institution. They begin this new chapter in life knowing that their parents are unable to provide financial support. They earn a scholarship, but it’s not enough to cover the total cost of attendance. So, they get a part-time job working nights at a local restaurant. The stress associated with balancing academics, work and personal life begins to take its toll during the first semester.
During this same time, administrators at the college are contemplating a 3% increase in tuition and fees to help offset rising operating costs. Relying on state funding isn’t a viable option, as legislatures are predicted to continue the trend of spending less on higher education. This college’s budget, unfortunately, has primarily relied on tuition and fees and legislative funding as revenue streams. Thus, this college will place the financial burden on students.
With higher education often considered the pathway toward social mobility, the escalating cost of tuition and fees creates significant barriers to achieving career trajectory. This trend intensifies socioeconomic disparities between low-income minority students and affluent students. In other words, social mobility becomes difficult when universities rely on students to take on additional financial responsibilities.
To stay true to its purpose of social mobility, higher education needs creative solutions to address new revenue streams and increase student success. If an academic program experiences a rise in retention and graduation rates among low-income minority students, it signals a likelihood to achieve long-term sustainable growth. Meaning this program has discovered success among a vulnerable student population that tends to stop out. This is a model that should be replicated and financially supported, yet, cash-strapped universities struggle with allocating finances for instructional and non-instructional programs. If students are left with the bill to solve these problems, it makes college less affordable, perhaps pricing low-income minority students out of the market. The hopes of achieving social mobility become shattered.
Rather, colleges and universities need to transform their existing model to create innovative partnerships that provide the necessary support to increase social mobility. One initiative gaining momentum is public-private partnerships (P3s) between universities and for-profit businesses. These partnerships can provide pathways to eliminate financial stress and increase student support.
For example, a P3 can supply capital assets. Rather than investing in new construction of academic buildings that can lead to increased maintenance costs, a P3 creates cost-sharing opportunities by contributing building space for modern labs and classrooms. Another avenue is enhancing student engagement through undergraduate research. In this case, the university provides support through research grants and the private entity contributes technology and research projects. Both parties benefit because students receive opportunities to expand their intellectual curiosities and strengthen their research skills while providing businesses with new research insights into solving some of their pressing challenges. This partnership can lead to the advancement of public transportation, which can reduce overall travel expenses. Even a short 15-minute drive to and from campus can add financial pressure to low-income students, especially when gas prices and maintenance costs increase. Moreover, public transportation creates revenue-sharing opportunities such as advertising space, while businesses can receive carbon credits and secure government subsidies. Networking opportunities can also be created where both parties organize events to connect professional executives with students, which expands employee talent pipelines and builds a professional circle for students.
A P3 can also leverage shared financial and IT expertise. For example, the financial aid office and corporate financial executives can develop predictive models to improve the allocation of scholarships, which can bridge the gap for accessible and affordable education. In addition, a P3 can improve the probability of receiving technological grants, which can provide resources to low-income students impacted from the digital divide.
These cost-sharing opportunities can create fiscal flexibility to invest in services that focus on supporting the whole student. This flexibility can help a university invest in campus-wide mentorship programs, supplemental instruction, writing centers, wellness programs, laptop loan programs and other targeted strategies to help overcome specific challenges experienced by low-income minorities.
Moreover, a P3 can restore consumer confidence in investing in a college degree by making the walls between academia and industry more porous. For example, a P3 can elevate high-impact practices in the classroom, update curriculum and create connections between what students are studying and their career path. With demand to upskill employees, a P3 can result in professional education paired with on-the-job training, providing additional evidence that universities stimulate economic benefits. This joint initiative can also lead to developing workshops, seminars, and industry-approved certification programs, bolstering the university’s brand credibility.
This strategic P3 must focus on creating financial sustainability by tackling persistent operating deficits and low cash flow. Moreover, these partnerships must find new ways to attract and retain students, while building a viable workforce for businesses. Cash-strapped private universities, for example, use discounting tuition as a method to increase enrollment, but it also widens their financial hole. Rather, institutions must bolster revenue through P3s to make college affordable, so it doesn’t affect the accessibility of higher education for lower socioeconomic students.
Overall, a P3 must be part of university’s short-term and long-term strategies that lead to social mobility, with a focus to provide financial relief for economically disadvantaged minority students. Within this strategy, an aspirational and measurable institutional goal such as 75% of students graduating with zero debt paves the way for minority students who have a financial need to persist toward earning their college degree. P3s also need to help create new student experiences to keep students engaged and motivated during their academic studies.
Higher education leaders have a responsibility to transform the way universities operate, so we can create pathways for economic progression. Failing to innovate leads to us failing to help students enhance their socioeconomic position. A P3 allows both entities to innovate by combining resources and expertise that can create a supportive, student-centric environment that elevates student success and empowers low-income students to stay on track to earn their college degree and achieve social mobility.