Tomorrow is college decision day, when many high school seniors choose which college to attend after graduating. Most young people have accepted the paradigm that to land the job of your dreams you must attend four years of college. However, a new alternative to a college education has received much attention, and for good reason.
A partnership of education experts and private companies based in San Francisco has emerged to deliver students an alternative: MissionU. MissionU is a tuition-free, year-long intensive program of learning by doing. It partners with companies including Spotify and Lyft.
MissionU is popular because students are being asked to spend more money on education that does not guarantee employment. According to the National Center for Education Statistics, the average tuition and fees for public colleges rose 33 percent between 2004 and 2015, and by 26 percent at private colleges. Since 2015, College Board reports that average in-state tuition and fees increased another 3 percent at public colleges and 4 percent at private colleges.
MissionU accepted around one percent of applicants for its first cohorts, which may encourage other institutions to provide similar education paths. Cutting the cost of education could have major economic effects.
Companies participate in designing the curriculum, ensuring the lessons are relevant to employers’ needs. MissionU offers training in data analytics, “business intelligence,” on-the-job training with partner companies, financial management, and practical lessons in finding a job. It is looking to expand its programming to other areas.
The MissionU payment method presents a low-risk, high-reward alternative for students worried about debt. Instead of paying tuition, they repay the program through their wages after obtaining a job that pays at least $50,000. For 3 years, 15 percent of a graduate’s salary will go to MissionU.
This model differentiates MissionU from most coding boot camps and other certification alternatives that require up-front tuition. MissionU is a hybrid of specialty boot-camps and traditional universities. Its one-year program is longer than boot-camps and workshops, which typically last several weeks or months.
MissionU’s list of well-known advisors and corporate partners has brought media attention, increasing its ability to attract more partners and applicants. Its payment model and short time frame set it apart for students.
If MissionU expands and is replicated by competitors, its business model could give students another viable option, better preparing them for the ever-changing economy, and allowing them to save. This could benefit the entire economy, not just enrolled students.
According to the latest data from the New York Federal Reserve Bank, students with loans graduate with an average balance of $34,000. Important economic milestones such as saving for retirement and buying a home take longer (or are never reached) for debt-holders.
Another problem is that what colleges teach and what employers require are often different. A skills gap emerges, which decreases productivity and company profits.
High school graduates could easily replace traditional humanities and social science courses to enter the business world. Thousands of young people agree with these assessments, which is why they applied for MissionU’s coveted few spots.
It will take time for more competitors to meet the demand, as well as more partner companies to participate in an arrangement such as MissionU’s. Potential competitors may be waiting to see how the MissionU program turns out. These programs should be able to expand quickly, however, because 80 percent of MissionU’s instructional content is delivered online.
For the time being, MissionU is only educating small cohorts of students, approximately 25 per year. If MissionU and others prove to be successful, some young people may become more astute about college costs, and do tangible cost-benefit analyses.
The desire for the traditional “college experience” and unlimited federal loans have given four-year colleges a steady stream of applicants, causing tuitions to keep rising. Parents try to help finance college because they feel they must help their child become competitive in a market where degrees are more ubiquitous than ever before.
MissionU could help crack the code of degree inflation by cutting out the expensive middleman. Traditional colleges do not have to be a universal stamp of approval. Not only does MissionU connect students to partner companies, but it also must help its students find good jobs for its own financial stability. By comparison, traditional colleges host career days and job fairs, but they do not have the same financial imperative to ensure high earnings after graduation.
If this model for alternative education grows, it could displace many traditional colleges. Many students benefit from learning by doing, and the economy could benefit from the integration of business and collegiate education.
Joshua Hardman is a contributor to Economics 21
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