Detroit colleges tackle dropout challenge by offering debt forgiveness

Dana Paglia’s path to graduation at Wayne State University has been a circuitous one.

Paglia put her degree on hold in the winter semester of 2012 because her father was terminally ill. When she tried to re-enroll a year later, she was blocked by the university because of an outstanding $1,300 balance from her last semester there.

Not only was Paglia — who was just 15 credits short of graduating — stopped from taking more classes, the balance meant the university wouldn’t release her transcript to send to other colleges.

She eventually took culinary classes at a local community college and worked for several years on food trucks in the Detroit area.

“It was fun and different,” Paglia said of the detour in the culinary industry. But it was not what she envisioned when she started at Wayne State, where she had hoped to pursue a career in advocacy.

“Working 80 hours a week to make $12 an hour is not exactly what I wanted, especially since I was so close to having a whole other career I was planning for myself,” she said.

Things changed quickly last fall when she got a call from Wayne State offering her a chance to wipe out her debt and re-enroll at the college. After posting improvements on low graduation rates at the university, college officials set their sights on former students like Paglia who left campus without a degree. By January of this year, she was back in classes to complete the anthropology degree she began several years earlier.

“When I got the call, it was a too-good-to-be-true type of situation,” she said.

Paglia was one of the first students to enroll in the Warrior Way Back program, an initiative Wayne State launched last year that has become a model for higher ed institutions in the Detroit metro area and is drawing attention from well outside the Midwest region. The program offers incremental amounts of debt forgiveness to students who left without graduating if they re-enroll and make progress toward earning a degree.

Warrior Way Back reflects the growing concern of many higher ed officials and policy makers with the number of students who leave college without a degree. Nearly 700,000 people in the Detroit metro area have attended college but have not graduated. People who left college without finishing are more likely to have difficulty paying off their student loans or to default on their student loans, according to higher education experts. The large number of noncompleters is also an indication of how institutions such as Wayne State have fallen short in serving many students even as those institutions have made marked improvements in retention and graduation rates.

Dawn Medley, Wayne State’s associate vice president for enrollment management, said she got the idea for Warrior Way Back after listening to a radio story about a Detroit initiative to forgive parking fines of residents.

“We had been talking about re-engaging adult students. A lot of students are hindered not just by student loan debt. They were hindered because they also owed us [a balance],” she said. “What if we could set it aside like a parking fine?”

Colleges can’t forgive students’ federal or private loans. But small balances students owe to their institutions can often make or break their ability to complete college, especially if they’ve exhausted financial aid options such as federal grants and loans.

“When they came to us originally, we said based on their admission that they could be successful here. Somewhere along the way, we as an institution weren’t there to be helpful,” Medley said. “We see it very much as the student giving us another chance.”

Wayne State students who withdrew more than two years ago, had at least a 2.0 grade point average and owe no more than $1,500 to the college are eligible for the Warrior Way Back program. Medley said the college has identified about 5,000 former students in the area who qualify and for whom they have a current address. About 60 percent were seniors when they left the college. And the vast majority (about 80 percent) have some level of financial need. Medley said she hopes eligibility requirements for the program can eventually be expanded further.

In the interim, the college is already seeing returns on the initiative. Since Wayne State began Warrior Way Back in the fall of 2018, 142 students have enrolled in the program. Twenty have since graduated, and 10 more are expected to follow suit in December. Medley said the buzz about the program has even prompted former students who left without graduating but didn’t owe money to the university to inquire about returning.

Warrior Way Back is part of broader changes happening at Wayne State University in recent years. The university has received national attention for improving its graduation rate. About a third of new students at the college were completing a bachelor’s degree in six years in 2014. At 13 percent, the rate was even more dismal for African American students. But the college boosted its six-year graduation rate to 47 percent by 2017, although degree attainment for black and Latino students still lags.

That improvement is due in part to more personal outreach to students by advisers and initiatives such as a summer program for entering freshmen who need remedial courses. Wayne State officials they want to cut the university’s racial achievement gap in half by 2025.

“We have more support now to help those students cross the finish line,” Medley said.

The Policy Perspective

Julie Ajinkya, vice president of applied research at the Institute for Higher Education Policy, said a key feature of the Warrior Way Back model is that a student’s balance is forgiven over a series of terms, so they are incentivized to make progress toward the degree. Just as important, she said, is that colleges themselves change how they support students.

“We’re not just asking folks to re-enroll, crossing our fingers and hoping something is different this time around,” she said.

While students benefit from finishing their degrees, colleges also stand to gain from the returning students. The balances being forgiven have already been written off by the college. And Wayne State generates more revenue from tuition and fees for those students than it loses by canceling their outstanding balances.

IHEP has created an online cost calculator that shows college leaders the potential return on investment from establishing their own debt forgiveness plan modeled on Warrior Way Back. The group completed that project with backing from the Lumina Foundation, which has provided grant funding to organizations in 24 cities across the country since 2017, including Detroit, to address higher ed degree attainment.

Other colleges have used creative ideas to get students back to campus, including offering scholarships. But Wayne State’s focus on using institutional debt forgiveness is as significant as the way it’s become a regional strategy to steer former students toward college completion.

“If you live in the Detroit area, you have an entire ecosystem of higher education that has adopted what I think is a commonsense policy allowing people to continue their education,” said Dakota Pawlicki, Lumina’s strategy officer for community mobilization.

Thanks in part to Detroit’s inclusion in a network of Lumina “Talent Hubs,” the Wayne State model has been noticed by institutions well outside Michigan.

Colleges in Indiana, Ohio, Oregon and Wisconsin have inquired about the program. And Eastern Iowa Community College already has its own institutional debt forgiveness program underway, Pawlicki said. But the program’s influence has been largest in Wayne State’s own backyard.

Model for Other Detroit Colleges

After learning about the Wayne State model, officials at Oakland University, another four-year institution about 40 minutes north of downtown Detroit, opted to target an even larger group of students — including both students who left without a degree as well as those at risk of dropping out.

“We wanted to look at ourselves to make sure we’re not increasing the problem,” said Dawn Aubry, associate vice president for enrollment management at Oakland. “What can we do to make sure we’re not contributing to the stop-out issue?”

College officials look for telltale signs that students may be at risk of dropping out — lower grades, changes in majors or overall time to earn degrees — and reach out directly to offer individual support, including advising and financial assistance.

Oakland’s Golden Grizzlies Graduate Program forgives the outstanding balance of former students for each semester they make progress toward a degree. It also offers microgrants of up to $500 to those students who don’t owe a balance to the university.

At Henry Ford College, a two-year college in Dearborn, Mich., officials are making the process easier for students who have left college without a degree to get an official transcript — one of the biggest barriers for students to later earning a degree. Students who pay down half their balance can receive the transcript immediately. Those who agree to a payment plan can re-enroll in classes. The college also assigns those returning students individual academic advisers.

Daniel Herbst, vice president for student affairs at Henry Ford, said the college’s president became interested in starting an initiative like Warrior Way Back after hearing Medley speak about the program.

“Some schools will look at this as a way to increase enrollment,” Herbst said. “For us, it’s more about serving students who really need the opportunity to come back to school.”

Employers Aim to Develop New Talent in Region

Local industry has taken its own interest in the debt forgiveness model to hit ambitious goals for a more educated workforce in the region. An initiative backed by the Detroit Regional Chamber has set a degree-attainment goal of 60 percent, including high-value certificates and associate degrees, for adults in the area by 2030.

The Detroit metro area’s degree-attainment rate is currently 45 percent, and the population of new high school graduates is declining. So to boost the share of residents with postsecondary credentials, local colleges have to do more to reach the adult students, said Greg Handel, vice president of education and talent at the Regional Chamber. The Wayne State model for steering students back to campus appeared to be promising for other colleges in the area as well, he said.

“The idea here is taking a great idea and commitment from Wayne State to tackle this issue and seeing if we could leverage that idea and turn it into a regional strategy,” Handel said.

The debt forgiveness model is just one strategy among several being tested in the Detroit area to hit degree-attainment targets. The chamber is also working with local colleges to create stronger degree pathways for adult students and also encouraging local firms to offer tuition benefits to employees who enroll in higher ed programs. The chamber is also playing a direct role in connecting students with colleges.

“There’s this notion that maybe a generation ago people moved to where the jobs were. Now companies with the best jobs that pay the most tend to seek out the most educated talent,” Handel said. “We need to ensure we that we have a good, solid pool of educated talent both for our existing employers and for employers that may want to expand into our region.”

A generation ago, many Michigan residents were able to get well-paying jobs without continuing their education past high school, said Tiffany Jones, director of higher education policy at the Education Trust, which advocates for closing gaps in achievement for low-income students and students of color in colleges and K-12 schools.

“Those jobs are few and far between now,” Jones said.

The debt forgiveness model has the potential to increase the social mobility of new graduates because their degrees will boost their prospects to get a better-paying job, Jones said. It also matters that Wayne State in particular is pioneering the new program, she said. Nearly 40 percent of the university’s student body is nonwhite, and 50 percent are low income. Those students are disproportionately likely to benefit from a program like Warrior Way Back, Jones said.

She noted that the program also reflects a shift in understanding of higher ed institutions’ role in their students’ success.

“A decade ago, if someone dropped out, college leaders would have a hundred reasons why that was the case. All of those reasons put the blame entirely on the student,” Jones said. “Higher ed institutions actually have a role in these outcomes and can do better.”

Medley said that’s true of Wayne State, where college officials are now more focused on how they can better help both current and former students finish degrees.

“We’re a different institution than we were 10 years ago,” she said.

Paglia, now 27, is emblematic of the kinds of changes college officials believe Warrior Way Back can lead to for individual students. She entered the fall semester with only one class remaining to complete her bachelor’s degree but got approval to begin taking courses for a master’s degree in urban planning concurrently.

And her return to college has already helped her land a new job at the Community Housing Network, a nonprofit that helps connect people dealing with chronic homelessness with housing options. The job goes “hand in hand” with her graduate program, she said. She got it after giving a presentation on chronic homelessness at the Detroit Institute of Art.

Paglia acknowledged initially feeling nervous about coming back to campus. But she said she soon realized many other students had dealt with similar challenges.

“You start to realize this is more common than you think,” she said. “It was scary feeling like you didn’t belong after so long, but no one made feel like I didn’t belong for a second.”

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