How Microgrants and Micro-Loans Are Working to Improve College Graduation Rates
Posted By Eliana Osborn on March 3, 2016 at 2:30 pm
Small changes can make a big difference in the lives of students close to graduation. And upping your graduation rate makes colleges look good too. Identifying the barriers to reaching the finish line of a degree is a win-win situation. This is why retention grants, or microgrants, like the Panther program at Georgia State, are a growing trend on college campuses.
The Hechinger Report writes, “The idea, being tried at a growing number of colleges and universities, is simple: For low-income students, many of them minorities or the first in their families to go to college, surprisingly small financial shortfalls are often all that stands between them and their goals, according to Tim Renick, vice president for enrollment management and student success at Georgia State. Microgrants ranging from several hundred dollars to $2,000 can get them to the finish line.”
The Georgia State program caught the attention of President Obama. He spoke of it in 2014 when announcing additional funding for college completion initiatives. Getting students through to graduation—especially those who are first in their families to attend college—has been an emphasis of the Obama administration’s higher education spending.
The concept of micro-credit is usually something we think of for the developing world; providing very small dollar amount loans, often to women, to help them grow a business. Muhammed Yunus and Grameen Bank won the Nobel Peace Prize in 2006 for their microcredit work which revolutionized the idea of lending. The Nobel Committee explained it as “economic and social development from below.”
On college campuses, micro-loans target immediate needs that might get a student off-track. Money is tight, as the growth of food pantries at colleges shows. Any unexpected expense, like a medical bill, is enough to push students over the edge. Quitting school seems like the most obvious choice.
Tom Sharbaugh, an alumnus from Penn State, started a micro-loan program of his own in 2011. His loans range from $1,500 to $2,500 at low interest rates, funded by him and his wife with additional donations from other graduates. “The office of financial aid says that students routinely come in with emergencies, often in the middle of a semester. The stories are really heartbreaking, such as students whose parents have lost their homes or jobs. They often need extra money to cover the rent or maybe fix a car they use to commute to campus,” Sharbaugh told Kiplinger Today.
Schools around the country are investigating ways to help students who need just a little extra boost. The University of Nevada-Las Vegas has a program where graduate students can apply for emergency retention grants when they’ve explored all other financial options. This trend toward more humane fiscal policies can make a big difference in the lives of affected students.