Elizabeth Smith, a stay-at-home mom of six in southern Vermont, recently re-enrolled in school when the Community College of Vermont made an offer she couldn't refuse: $3,500 a semester deposited in her bank account, no strings attached.
“I think I was in a little bit of disbelief,” Smith recalled recently.
The money doesn’t go too far after she accounts for textbooks, groceries and childcare — it's not enough to cover even the part-time childcare she needs for her own two-year-old — but it helps.
The Community College of Vermont and other two-year schools from Maine to Florida are now shelling out money, sometimes in tandem with employers, to enroll students in training programs that prepare them for office jobs, as auto mechanics and in childcare. Community colleges in Massachusetts began partnering with Bank of America, Wayfair, Boston Scientific and other corporations in 2021 to pay students $15-an-hour for on-the-job customer service and administrative assistant certificate training. And in Maine, the community college system offers $500 weekly stipends and housing to students who enroll in training programs in welding and automotive repair. In Florida, Disney is paying some of its hourly employees to take courses, earn a degree, a high school diploma or learn a vocational skill at Orlando-based Valencia College.
Low U.S. unemployment and a declining college enrollment landcape have fueled the trend, although it has some higher ed analysts questioning whether paying students after they complete a degree might be a better strategy.
“Colleges are desperate,” said Brandon Busteed, chief partnership officer at Kaplan, a corporation that provides higher education training and services. “Our population in the U.S. is not growing and we just don't have enough young people in the pipeline to backfill that.”
Between now and 2030, 75 million baby boomers are set to retire from their jobs. Over the same period, the population of traditional college-aged students will drop by 15%, leaving employers scrambling to fill the gap in trained workers.
Hospitals like Southern Vermont Medical Center in Bennington, Vermont and Massachusetts General Hospital in Boston, as well as companies like Wayfair and Bath Iron Works in Maine, are helping foot the bill to create new worker pipelines. And Vermont offers a prime example of the problem: according to a recent analysis, the state needs more than 2,000 additional childcare workers in order to meet demand. That's a 78% increase in the total number of early childhood educators over current levels.
Only 18 students have taken advantage of the Vermont program so far. But James Trimarchi, director of planning for Southwestern Vermont Health Care, said he expects that number to grow as word gets out.
The hospital wanted to expand its nursing staff during the pandemic, and to do that, it had to hire more early childhood educators at the center.
“If you're going to attract nurses, nurses often have families and they'll go to a place where their families can be safe while they're at work,” he said.
Instead, too many students are currently stuck slowly moving through community colleges, taking one or two courses a semester, often while working.
If "we could pay those students to focus on their academics, they could get their degree, move into the labor force more quickly," he said.
The hospital, which treats patients from Vermont, New York and Massachusetts, gave a chunk of its federal COVID-19 relief funds to the Community College of Vermont to pay students.
Some analysts, like Kaplan's Busteed, have criticized the program as flawed for not awarding the money to students more wisely, like when they graduate.
“The better incentive is to pay for completing or to pay when they're hired in a job, where you're ultimately tracking the outcome,” he said. “If there's no expectation that I don't complete, why wouldn't I just ghost that enrollment?”
The Community College of Vermont said it is paying only students who live in Vermont, have worked in their chosen field and have maximized their financial aid to prevent ghosting.
But the reality is that only about 30% of community college students attain a credential within four years, according to the National Center for Education Statistics. Often the reason students don't obtain a degree is related to the cost of college or a fear of accumulating too much debt.
Nancy Noel, director of Learning Tree, the early education center at the hospital in Bennington, said childcare isn't a high-paying career that allows students to pay off college loans quickly.
“If we can help pay them along the way and they can get done earlier with less loans, hopefully they're going to enter the workforce at a full-time rate versus a substitute rate, which is really what we need to have,” Noel said.
While tens of millions of Americans are hoping for relief through President Joe Biden’s $400 billion college loan debt forgiveness plan pending before the Supreme Court, some said that money would be better spent expanding programs like the one in Vermont if they help students not just attend, but graduate.
Shalin Jyotishi, senior program manager at the Burning Glass Institute, said Biden's debt forgiveness plan doesn't fix the college affordability problem in a long-term way.
“We're going to add a Band-Aid that will quickly peel off as more and more learners get loans and do not get jobs that sustain a local, living wage,” Jyotishi said.
Jyotishi thinks colleges should provide more incentives, like cash, for students to graduate on time. He cited a collaboration betweeen Mesa Community College in Arizona and Boeing that reimburses students after they complete their $250 manufacturing training.
In Massachusetts, once participants in the on-the-job training program are hired into positions, they are paid the company's full-time rate with benefits, which is typically about $20 per hour.
For now, the $3,500 financial enticement in Vermont appears to be working.
Amy Bishop, a preschool teacher who never thought she'd be able to afford a college degree, signed on. A degree will give her a helpful pay bump.
“I’ve just been doing this for so long, I just figured that I might as well have a degree in my life,” she said.
And if she keeps up, she will find another $3,500 in her bank account next semester.