BREAKING: Rock Island’s Augustana College First in Nation to Offer New “Income Insurance”
BREAKING NEWS: Augustana College is the first in the nation to partner with Degree Insurance and offer “income insurance” for new students who transfer to Augustana. This effort involves Degree Insurance’s flagship insurance product, American Dream Insurance (ADI), the private Rock Island school announced Tuesday.
The Transfer Student Income Assurance Program is a pilot program in which 20 new transfer students are guaranteed the average income
for their academic field for the first five years after graduating from Augustana.
“This is yet another great reason for transfer students to consider enrolling at Augustana in the fall of 2021,” said Kent Barnds, vice president of external relations. “If the graduate doesn’t earn the expected salary for their major, the difference will be paid through the insurance program.”
This pilot program is limited and targeted as a test, involving no cost to students or to Augustana. Degree Insurance is covering the cost for the pilot program.
The first 20 new transfer students who apply and are admitted between July 15 and August 23, and enroll for fall of 2021, will be eligible for the income insurance.
The program guarantees income at the average for academic fields, based on actuarial information. For example, if an Augustana student graduates in a field where the average annual income is $60,000, but the Augie graduate’s job, in that field, pays only $55,000 a year, the income insurance makes up the difference in a cumulative lump sum of $25,000 at the end of five years.
“Augustana and Degree Insurance are partnering because we know that students who enrolled as new students at other institutions last fall may not have had the experience they had dreamed of for themselves,” Barnds said. “This may be the extra incentive they need to pursue an Augustana education.
“In a time when students have experienced so many unknowns, Augustana and ADI leaders hope this partnership signals assurance and confidence for college students.”
To remain eligible for the income insurance program, participating students must work in the United States after graduating from Augustana. If the graduate decides to enroll in graduate school, serve a church mission or participate in Teach for America or a similar program, the coverage will be paused during those years. Once the graduate accepts their first job in their field, the coverage begins.
American Dream Insurance has been intentionally designed to encourage graduation, according to www.degreeinsurance.co/how-it-works/colleges/. In order to qualify for the policy, a student must graduate.
“It is our sincere hope that removing the risk from a student’s investment in education we can encourage them to persist through to graduation,” the Degree website says. “As you know attending college is most often not a path to better earnings, but graduating is. It is important we reframe the conversation from “going to college” to graduating college in order to give students and their families the best chance of increased earnings and security in poor economic environments.”
Wade Eyerly, CEO of the new start-up Degree Insurance, told Education Week in April:
“Ours is the first guarantee on a student’s earnings in the years following graduation. Colleges choose to buy our insurance, and we use data on student outcomes from that college to set expected salaries for their students, by major. When students graduate from a college with our income guarantee, those students are covered for five years after graduation based on whatever major they finished with. At the end of the five years, all the students need to do is send Degree Insurance their W2s or tax returns—objective, verifiable, third-party documents that they’re filling out anyway—and we send them a check for the difference between what they were expected to make and what they actually made. For students, it couldn’t be simpler.”
Eyerly told Forbes last December that colleges and universities should be able to make back their premium costs and “turn a profit” in just a few years, through a boost in enrollment and gains in student retention.
For more information on the Augustana program, contact Bonne Jessee, Augie’s associate director of admissions and transfer enrollment, at 309-794-7395.