With just under half of American adults having “a great deal” or “quite a lot” of confidence in the value of higher education, student outcomes data has become an increasingly important tool for schools across the country. That’s because this information—ranging from graduation and retention rates to post-graduation employment stats—not only assess the effectiveness of an institution’s programs, but it is also provides results-oriented metrics on the ability of a college to set their graduating students on a path for success.
However, collecting this data—and good data, at that—has proven to be a challenging task. Not only are survey response rates typically low, and rely on self-reporting, but since much of this information is gathered right around the time of graduation, a significant number of graduates are not yet set with an employment opportunity. What’s more, students’ first post-grad opportunity may simply be a stepping stone to even greater success; but once the survey is taken, students are often not able to update their responses as circumstances change.
While colleges and universities continue to try new tactics to improve reporting and the quality of the data itself, a relatively new tool to accomplish this task has quietly emerged. And that is, Income Share Agreements (ISAs).
A measured way to collect student outcomes
An ISA, at its most basic level, is an agreement in which a student pays a fixed percentage of their income for a defined period of time after they leave school in exchange for up-front tuition funding. The idea is simple: if a school makes a financial commitment to the future of its students, it has a greater incentive to prepare those students for rewarding and successful careers. And in doing so, demonstrates a college’s faith in its own curricula while aligning the cost of college with its value. (For more on the fundamentals of ISAs, check out our previous blog post.)
Since ISAs recoup their upfront tuition through a fixed percentage of students’ income after they are out of school, information about the students’ income, job placement, and more is regularly reported back to the institution. This includes knowing when a student doesn’t meet an ISA’s minimum income threshold for payments, if a student finds themselves in a temporary job or one outside their field.
Even better, this information is collected for years after college—for whatever the term of the ISA is (typically 5-7 years). This provides a wellspring of verifiable data far beyond what the average survey can gather—and delivered right to the institution where it can be used in marketing, career centers, and gap analysis to determine where to direct more services and programs.
That’s not to say collecting timely, relevant student outcomes data should be a reason to start an ISA—in the list of the many benefits ISAs deliver, this is a fairly small point. But as a valuable byproduct on top of all the advantages and opportunities they create, ISAs surely should not be overlooked.