Looking for a way to encourage your college kid to graduate in four years? How about a sweet incentive, courtesy of the school.
A small number of universities around the country are dangling tuition rebates, guaranteed tuition rates for four years, textbook credits and other monetary carrots to nudge more students into graduating early or on time.
Those schools include public colleges in the University of Texas system, Cleveland State University in Ohio, Grand Valley State University in Michigan and Howard University in Washington.
While there has been much angst over the rising cost of college education and what to do about it, one surefire way to save big money and cut down on student loan burdens is to graduate in no more than four years.
Yet there is ample research showing that the vast majority of full-time college students who will soon be picking up their diploma will have taken more time in school to accumulate the necessary credits to walk in the graduation procession.
At four-year major state institutions, 36 percent of full-time students graduate on time, according to a December 2014 report by Complete College America, a nonprofit organization trying to improve college graduation rates. At smaller public universities, the four-year graduation rate is 19 percent, the organization said in its report titled “Four-Year Degrees Now a Myth in American Higher Education.”
An extra year at a major public university could cost $22,826 in tuition and fees, room and board, books and other supplies, Complete College America said. But there is another cost: Students give up $45,327 in potential lost wages by graduating late, the organization said.
Those numbers are worth weighing closely if you’re the parent of a college student or have a high school senior starting to look at fall semester class schedules. Can you enroll in the required core classes or are slots filled? Is summer school an option to pick up those requirements?
Acting on those financial concerns, some institutions are focusing on ways to improve their on-time graduation performance. In late February, Howard University announced steps to control tuition costs, including a rebate offer to graduates who earn their degree early or on time starting with the 2015-2016 academic year.
The rebate — 50 percent off the final semester’s tuition — will be paid after May 2016 graduation. Howard’s single semester sticker price is $11,900, so the rebate would amount to nearly $6,000.
Cleveland State University since 2013 has been offering financial incentives to students who complete their college education on time. It gives students who take a full course load of at least 15 credits a semester a 2 percent tuition rebate and returns $200 for textbooks.
In the 2014-2015 school year, the university spent $1.2 million on rebates and textbook credits, according to Bloomberg News. Since launching the incentive program, a higher percentage of students have signed up for a full course load.
The state of Texas, through its B-On-Time program, offers interest-free loans to Texas residents who are undergraduates at state schools. The loans are forgiven for those who graduate with at least a 3.0 grade point average within four years of starting college.
What’s in it for the schools?
Good publicity and marketing material to be sure.
Such steps are likely to improve the college’s graduation rate, said Mark Kantrowitz, a higher education expert with Edvisors.com. That in turn should enhance a school’s image in the competitive and closely watched school rankings produced by publications such as U.S. News & World Report.
From a financial standpoint, a discount or rebate is “usually minimal” for the school compared with a full-fledged tuition cut, said Kantrowitz.
If that’s the case, then more schools should be considering the idea. And perhaps the notion of a four-year degree will again be alive and well.