Photo: Lincoln Electric welding school
Even if you’ve been following the years long effort to get approval for a community college, you might not be aware of how much money Erie County has already spent. There was an initial $300,000 grant for a feasibility study, plus another $60,000 commitment from county council just because. Then there were legal expenses of $244,000 for the recent appeal and hearing in Harrisburg owed to legal firm, Post & Schell which could rise to as much as $325,000. That’s a total to this point of $604,000 with a possible total of $685,000 and all we have to show for it is a pretty study with charts and graphs and a board of trustees. When government officials do what they do, spending money that’s not theirs, this is par for the course. In the world of business, some might call it crazy.
What might have been done instead?
Instead of a feasibility study, why not test some ideas directly? Proponents of the college already know what they want to build, but is there a need for what they want to teach? Will students put in the effort and learn? Will employers hire the newly trained students? Are jobs available? Survey answers can be wildly inaccurate, so here’s a possible experiment:
In Erie County and elsewhere, a popular skill often taught in community colleges that leads to high paying jobs is welding. As luck would have it, about 90 minutes down the road in Cleveland, Ohio is welding equipment manufacturer Lincoln Electric and connected to their facility is a very well known, world class welding school, so here’s an idea.
Identify the community of students the college is aiming to serve and come up with a list of students who would like to learn to weld. Choose 20, by competition, lottery or some other method and send them to the comprehensive 16 week welding course Lincoln Electric offers for about $7500 each, that’s $150,000 for all 20 students. It’s an impressive course and the student can choose to take a certification test for any one of the welding methods he or she has learned.
When the students return, help them find a job in Erie County. Did all of them successfully complete the course and graduate? Did they all earn a certification? Were they all able to find work? If so repeat the process.
What was learned?
For $150,000 you have trained and employed 20 students, against the $600,000 the county has already spent and trained none. You’ve also learned how well your target students do in a serious learning environment with a specific skill and whether or not local employers really have jobs for them. If some didn’t graduate or did poorly, you can find out why and what might, in the future, help students like them to be more successful, all before spending millions on a community college.
But wait, it gets better!
This process of sending students to welding school could become self-funding after it gets started. Students sign an agreement up front, an ISA or Income Sharing Agreement (we wrote about them here), that obligates the student to pay back a percentage of their earnings for a set period of time into the program. They don’t pay if they can’t find a job, but the higher paying jobs mean they pay more into the program. The program, after a few cycles of students, has its funds replenished by the working graduates who received the training with no out of pocket expenses up front.
Though the ISA is usually run by the school which provides the training without getting paid and relies on successful graduates to pay it back, in this particular case the school is already successful and doesn’t need to do that, but we could have a separate organization here in Erie County (NOT the Erie County government!), administering the funding and also watching the results. If graduates start to find jobs unavailable for a particular skill, the program could slow in that area until demand begins to increase.
Add training for different skills one at a time
Obviously, an ISA could be offered for more skills and the same process takes place. Send an initial group to school, find out how it works, make any necessary adjustments and as the funding begins to rebuild for that skill, add another. All of this happens without any commitment to a fixed building, fixed costs, teachers and administrators and potential taxpayer liabilities.
This solves the affordability problem
Since one of the justifications for the community college is that some students can’t afford what’s already available, this ISA arrangement, takes care of that. Since the initial grant from the local foundations was for over $3 million, that money can be used as the seed capital to begin this process.
Flexibility and skin in the game
The group administering the program can adjust what skills get funding as job opportunities rise and fall in those areas, they become very agile instead of being committed to a particular course of study just because the college has spent money on equipment and teachers for a specific curriculum. They also have to be sure their students are successful or their self-funding dries up.
Other local schools can use the ISA model, too
This same self-funding model can be used by any of the local schools, whether regular colleges or technical schools, there’s no need for it to be a county government program. Maybe there’s no need for the community college at all, but that’s a discussion for another day.
Training students without spending millions of dollars
Seriously, what’s not to like? This keeps Erie County taxpayers from a future ongoing liability, it provides training for Erie County students, solves the college affordability problem and adjusts on the fly as the needs of local employers change all without spending the millions of dollars the current plan anticipates it will cost. It seems like a winner to me.
