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Today's post is a little different. The story below is sponsored content by Degree Insurance, meaning it stems out of a commercial relationship with Extra Points. I only agreed to write this post because it is about a topic that would be relevant to Extra Points readers anyway, and is still aligned with our editorial values. If you are interested in sponsored content at Extra Points, drop me a line at sales@ExtraPointsMB.com. If you have questions about this post or about this publication generally, I can be reached at Matt@ExtraPointsMB.com.
Think of the most expensive purchases you'll typically make in your life. Your house. Your car. Maybe some specialized equipment or tools.
For all of that stuff, you can buy insurance. If I buy a new computer, and it doesn't work, or it completely sucks, I can return it and get my money back. If the car that I bought doesn't actually work, I can return it, or at least have somebody else pay for the repair costs. I pay money every month to some company somewhere so I know that if something crazy happens to my house, and I can't live here anymore, I'm going to be protected.
But there's one expensive purchase I couldn't effectively insure...my college education. I borrowed some money when I was 18 and had never seen a check with a comma in it before, and then bet that whatever I learned at that school would get me a good enough job to pay back all that money I borrowed.
You can't really give back a college education, even if you didn't like it, or it wasn't effective at helping you become employed, or it didn't deliver on any of the things you were promised back at the start. Nobody can crawl into your brain and repo that knowledge. You're just stuck with the check no matter what.
Wade Eyerly, the founder of Degree Insurance, is trying to change that dynamic.
Here's how the system works. Degree works with a university and offers to guarantee the salary for every graduate, pegging the salary guarantee to a median, depending on major. Upon graduation, a student submits their W9 to Degree. If they didn't earn the amount of money on the guarantee, Degree pays out the difference.
This process, according to Eyerly, is supposed to remove much of the risk of going to college. "Now, you know what you're going to earn, you go out when you graduate, you get the best job you can. And for five years, you're going to send us your tax returns. And if I said you were going to make 45 grand a year, and your job only paid you 41, I'm going to cut you a check for the difference."
Here's why a school might want to do this, and how it could impact college sports
If you're a massive state school, or a very elite private school, you're probably not as worried about student recruitment or retention. But with a demographic cliff approaching, and with international recruitment becoming more expensive and more difficult, many other schools are deeply concerned about how they'll be able to recruit enough students to fill classrooms, and, more importantly, graduate.
If a school paid an entity like Degree to guarantee salary, according to Eyerly, the school would suddenly have a very powerful carrot to help students power through and complete their degree. It would potentially be a powerful recruiting tool for potential students. Degree points to their work with Augustana College, in Illinois, that helped increase enrollment by 20%.
That could carry into college sports as well. After all, most college athletes, especially below the D-I level, aren't on full scholarship. They may be weighing opportunities at the D-I, D-II or D-III level, all with varying degrees of partial scholarships, grants, and loans. A student who knew exactly what they would be making after graduation could make a better informed decision about where to attend college.
Plus, post Alston, schools now have the ability to provide financial awards to their college athletes that are educationally related.
According to Eyerly, the NCAA explained that "if a school is providing an insurance benefit to all students, then there's no issue. If a school wanted to provide the insurance to target all students of a particular group, like all business majors or all first-generation students, then that's also fine. If they want to just give it to athletes, then a school should talk to their compliance officers," but feedback they've gotten from D-I and D-II schools indicates they don't see issues.
For a coach that can't offer every athlete a full scholarship, but wants to pitch their program as a "40 year, not four year" type decision, being able to provide post-graduation salary clarity could be a significant recruiting boost.
Beyond that, Eyerly sees this as part of a mission to improve inequality and access to higher education
Even with college costs skyrocketing and many doubting the value of a college education, Eyerly remains very bullish on the value of a degree as a pathway towards building wealth and security. But borrowing money to attend college, and then not graduating, may be an even worse outcome than attending college at all.
"When I think of maybe some students that are a bit more wobbly on the proverbial slackline when they enroll in college...your first generation students, your Pell Grant eligible students, students from underrepresented minority groups, even athletes who have such massive time commitments in school...they're all taking on real risk when they enroll. We want to help build a safety net around them, to support them."
"Most athletes, they're going to go pro in something other than sports, right? That's the old NCAA saying? We want to build a way to help support them, so that they know they'll leave college with more than just pictures of them with a football helmet."
For more information on Degree Insurance, visit their website at Degree Insurance.co
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