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College and Universities, Financial Risk Sharing – An Alumnus Perspective

Posted on July 28th, 2015  Posted by Kristen Yancey
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By design, the higher education system is intended for any American interested to take advantage of the opportunity in some size, shape or form. The message is clear: we all must have some type of education after high school to flourish in our careers.

This is an excellent marketing opportunity for any organization of high learning. These institutions are relevant because they offer a promise for a better future, a higher quality of life. Most Americans make the lion’s share of the investment to obtain higher education. Students make huge investments of their time and money. And then, if you are a student who is adequately driven, skilled, and yes, lucky enough, to persevere in the 59% higher education graduation rate, you swiftly and frequently receive requests from your alma matter’s alumni departments for financial assistance. (Sometimes before you actually have found gainful employment.)

When I receive a request from my undergraduate university, my first thought is, “Yeah right….I am a public educator. There is no money to spare.” My second thought usually is, “Where was this donation money when I was in school?” More often than not, there are stories in these communications describing stories about Student X, who would have not been able to remain at college without the alumnus fund. Perhaps I was just not in the know about taking advantage of alumni funds; it’s possible.

I receive letters, emails and phone calls designed to persuade me to give. I will admit, sometimes I do seriously consider offering a donation to my school. I am, after all, very proud to be a graduate. Then reason always prevails as I come to realize: I still have my own student debt. I cannot possibly donate for others to complete school until I have repaid my debts. From my point of view, institutions of higher learning have a vested interest in my post-attendance funds, regardless of the glaring fact that I am indebted as a result of my attendance.

This leads me to a question on many minds: Why are these institutions not vested financially, as students are when committing themselves to higher learning, particularly for costs not associated with tuition? Is it wrong for students and society to expect that institutions of higher learning are entrusted at equal or greater levels compared to their students? The current funding model for most students are student loans. Colleges have entire departments devoted to obtaining them for students. After the student loans are processed, higher education institutions collect - and then have virtually no horse in the race.

Some voices have recently been calling for a more even spread of risk for student loans spread between students and their university alike – in short, the institution would be responsible for paying portions of loans should students default on making payments. What do you think of such a model?

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