Behind the Bumper Sticker: Risk-Sharing

Behind the Bumper Sticker: Risk-Sharing

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  • Molly Simon
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  • Ladan Ahmadi
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  • On Wednesday, February 21st, Third Way’s Education team hosted their second event in a series designed to give experts a platform to debate what is “Behind the Bumper Sticker” on some of higher education’s most talked-about topics—this time on the hot topic of “risk-sharing”. Third Way’s Lanae Erickson Hatalsky moderated a conversation with higher education experts, Dr. Nick Hillman, Dr. Tiffany Jones, and Dr. Matthew Chingos, digging into questions like, what is “risk-sharing”?, what does it really mean to make sure colleges have “skin in the game”?, and how can we make sure any risk-sharing program doesn’t result in less opportunity for students who may be deemed “riskier”?

    From the start, the panelists all agreed that “risk-sharing” proposals need to have the end game in mind when designing a policy that is suitable to meet the needs of students. Dr. Hillman, an Associate Professor of Educational Leadership & Policy Analysis at the University of Wisconsin-Madison, brought up that “the traditional ‘risk-sharing’ policies being proposed do not help students who are currently drowning in debt,” rather the plans are focused on future students who have not yet taken on debt or defaulted. Dr. Hillman pivoted to make the point that “risk-sharing” is an opportunity to get new data that helps students navigate the higher education marketplace as well as be an accountability tool for policy.

    Dr. Jones, the Director of Higher Education Policy at the Education Trust, reminded the audience that, “sometimes inequities can be masked when you just look at averages, even among institutions that might enroll diverse students who may not have equal access to programs or equitable outcomes" and, “it is really important to have information on who has access to what because institutions who serve the disproportionate numbers of low-income students and students of color have the least resources.” Dr. Jones emphasized the importance of equitable investments in institutions that serve a higher percentage of students of color and low-income college students, like Historically Black Colleges and Universities (HBCUs) and other minority-serving intuitions.

    When Lanae asked the panelists what is your “risk-sharing” policy? Dr. Chingos, the Director of the Urban Institute’s Education Policy Program, responded that “risk-sharing” creates incentives for institutions to improve outcomes, but the problem is most “risk-sharing” proposals have little incentive when measuring outcomes ten years down the line. Dr. Chingos emphasized that a good risk-sharing proposal “need[s] to use federal policy levers to create short-term incentives for colleges to support student completion and success.”

    Overall, this event made it clear that “risk-sharing” is a potential tool to hold institutions accountable for their students’ outcomes, so long as they take into account metrics, race, and income. But as pointed out throughout the discussion, creating a robust policy that doesn’t have unintended consequences for students will be trickier than most people think.

    If you have suggestions for a future “Behind the Bumper Sticker” topic you think we should demystify, please email Molly Simon at