Do You Think Erie County Should Be in the College Business?

When writing the other day about the Erie County Community College and what it was supposed to be, I had not yet seen the proposal submitted by the county. It’s now on the county website with all of the associated studies and resolutions, somehow, I missed it when looking for it a short while ago. Wading through it requires some time and patience, however, after having done so, a few things become apparent.

Was the feasibility study’s conclusion ever in doubt?

The feasibility study, commissioned at considerable cost, ($360,000 was allocated, it’s not clear how much was spent), is a 65-page document that begins and ends with statements about why a community college is needed. Everything in it leads you to the same conclusion because that’s what it was designed to do. If you instead, look at the problems they are trying to solve, as cited in the study, without a preconceived answer in mind, other solutions are possible.

On the plus side, there is recognition in the study that student enrollments are declining, that other schools, colleges and universities exist in the county and that funding for a community college is a big concern among taxpayers.

To alleviate those concerns, the county states that funding will come from gaming revenue, the Erie Community Foundation, some tuition dollars and, of course, grants from the state. Combined they project no other funds will be needed, but if funding falters, Erie County is responsible.

Lack of schools isn’t the problem

Why is a community college even necessary? The study points to a number of needs within the county, but one seems to get the most attention and that is that many students who wish to further their education simply cannot afford it. The schools and training are available, but even with the financial aid currently offered, it’s beyond reach. The county’s solution is to build a whole new college and charge less, becoming the low-cost provider, but the problem isn’t a lack of schools, it’s lack of financing options that can make school affordable. You can address that issue directly without building a school and, oddly enough, if you solve that problem in a creative way, some of the other needs they identified are met, as well.

What’s an ISA?

A lesser known method of paying for higher education is getting a lot more attention recently and it’s already being used in some locations, like Purdue and at coding bootcamp Lambda, it’s called an ISA, an Income Sharing Agreement.

In an ISA, students pay no tuition upfront, only repaying the education provider once employed—in essence, funding today’s educational opportunities for a fixed percentage of tomorrow’s income, within a set window of time.

There are a lot of benefits to this arrangement. Obviously, the student pays nothing up front, they sign the agreement and go to school. The school gets nothing up front, they train the student and get paid back when the student gets a job, so they have a very strong incentive to keep the student engaged and learning the skills necessary to become a highly paid employee because that’s how the school gets paid. In other words, the school has “skin in the game.” No fluff courses and meaningless degrees or certificates. Real training and education leading to real jobs.

Schools will need to be highly aware of what kind of training employers need and put together course work that gets the student up to speed which solves the problem of schools being responsive to employers. No one will want their training if there’s little chance of employment afterwards.

A bipartisan bill in congress is addressing ISAs

Sens. Todd Young (R-IN), Marco Rubio, (R-FL), Mark Warner (D-VA), and Chris Coons (D-DE) introduced the ISA Student Protection Act of 2019 to clarify tax treatment of funding education this way. Maybe we can contact our senators and tell them to get on board.

Do we want Erie County in the college business?

Instead of Erie County going to Harrisburg with outstretched hands hoping for funding, adopting the ISA approach means students, schools and employers can work together to meet each other’s needs. The county doesn’t need to get into the college business and employers are more apt to quickly see highly trained employees becoming available. Students won’t have debt hanging over their heads and schools will build up a future stream of income from students now employed and sending payments back to the school. It’s a win-win-win!

Of course we can take the old way of doing things and get the government involved in a project for which they have little expertise, risking taxpayer dollars in a plan where the politicians have no skin in the game if it all goes wrong. I know which option I prefer, how about you?