Last October, Bill Gates weighed-in on America's alarmingly high college drop-out rate in a video he posted on his blog: "The U.S. has the highest college dropout rate. We're number one in terms of the number of people who start college but we're like number 20 in terms of the number of people who finish college."
"Based on the latest college completion trends, only about half of all those students (54.8 percent) will leave college with a diploma. The rest--most of them low-income, first-generation, and minority students--will not finish a degree. They'll drop out."
"This is tragic," he says. "Not just for the students and their families, but for our nation. Without more graduates, our country will face a shortage of skilled workers and fewer low-income families will get the opportunity to lift themselves out of poverty."
High drop-out rates mean that millions of students are taking on debt without earning their degree. And the level of student debt has exploded in recent years: Today 44 million Americans hold $1.4 trillion in student loan debt.
While many people debate what to do about the problem, two entrepreneurs have decided to do something about it. Four years ago, while they were still working at a management consulting firm in Boston, Jackson Boyar and James Morrissey provided pro bono advice to colleges trying to establish mentorship programs for new students.
Spotting an opportunity to build a business around the mentorship services they were providing, they quit their jobs and launched Shearwater International. Backed in part by angel investors such as NXT Ventures, the company today is partnering with over 60 colleges, universities, and secondary boarding schools to provide pre-qualified mentors to thousands of students.
I recently spoke with Boyar and Morrissey about how they're helping students find mentors and how their business model works.
What types of students would typically take advantage of the mentoring service you provide?
Jackson Boyar: Some schools work with us to support their first-generation college students, women pursuing STEM degrees, or their international students. Some schools offer this mentoring opportunity to their entire incoming class.
We have really focused on helping institutions take a model that's been around for many decades, which is mentoring, and add software, additional support, and scalability. We now have schools working with us that are facilitating thousands of mentorships, and we're helping schools use mentorship as a tool to impact their strategic goals, like retention and graduation rates, and the integration of new students.
How is your service different from existing mentorship programs?
James Morrissey: When people think of mentorship they might just think, "Oh, you matched two people together and they have a conversation, then they grab a coffee." But what's very different about our model is we spend a lot of time on the training and guided interactions.
We want to make sure that there are certain learning outcomes that are achieved through the program, whether that be an increase in the graduation rate, or an increase in acclimation. We have a curriculum that's built around that, as well as assessments through our program that help schools see those outcomes.
We've actually helped several schools improve outcomes such as reducing drop-out rates, and increasing retention from the first to second semester.
Mentoring is a very hands-on, personalized experience. How are you able to provide that at scale?
Jackson Boyar: The mentor ultimately is a big conduit for all of the learning that's happening. We train them to help the students achieve learning outcomes. A really big challenge that universities face when they create mentoring programs is scaling it.
When a school like Penn State has 18,000 incoming students every year, how are they possibly going to give personalized support to each one of them, especially when some of them might come from a single-parent household? Some of them might be first-generation, some of them are international students from different countries and cultures.
The technology we provide allows schools to have a very personalized track for students. So their mentor will be personalized to their background. The curriculum and content they cover are personalized to their background. In our own research, we've seen that that is perhaps the most important thing that leads to success for a student.
How does the platform work? Who are the mentors and how do they interact with the mentee exactly?
Jackson Boyar: Before they're ever matched to a student they will have completed training. They also take a matching survey, which is akin to an online dating service where we're basically looking at what traits a mentee would want from their mentor. Then we look at what languages they speak, what their passions and interests are, and we make a match based on the best possible fit within the community.
Once the match is made the mentors are expected to meet at least once monthly with their mentee. Some of those interactions will be over software platforms, others will be in person.
Where are you at in terms of number of schools that you're working with and how many students are using the program?
Jackson Boyar: We're roughly at 60 partner schools right now. Some of those are small boarding schools with maybe 50 students going through the program, whereas others, like at Northeastern, might have thousands of students being offered the program.
In terms of mentorships, we had over 10,000 students engaging with our platform in 2017. Our internal goal as a company is by 2020 to be launching over 100,000 new mentorships each year.
What's been the feedback on your platform so far? What kind of metrics do you track?
Jackson Boyar: In one randomized control trial we found that students who were mentored were 150 percent less likely to go on academic probation than those in the control group.
We're also asking students to self-report how prepared or acclimated they feel at school, and what we've found is that each incremental meeting with their mentor tends to have a bit of a lift in that score over time.
For almost all of our partners, our revenue renewal rate is usually well above 100 percent, meaning that schools are not just continuing to work with us, but they are also paying more money for the service and expanding it to new populations.
What is the impact of increasing retention and graduation rates?
Jackson Boyar: In America, more than 30 percent of college students drop out after their first year. Not only is it awful for students, but it's a huge financial hole in the institution's business model.
James Morrissey: I remember a few years ago, when we were looking into market size, we learned that the annual cost of attrition, which is when students drop out or transfer, was over $16 billion a year. And that's just for U.S. colleges. So helping students graduate on time is very meaningful.
You describe Shearwater as a social entrepreneur enterprise. You're also for-profit, right?
Jackson Boyar: We are for-profit. Something that we've both been very excited about is that we recognize this is a business that can not only be very successful financially, but also can create a ton of impact that is extremely value-aligned with the student at the institution. We're not just trying to help schools recruit more students, we're helping them make sure that the students that they do bring in are successful. And the more success we show in that area, the more schools are willing to pay us.
James Morrissey: In fact, the only way we can be a financial success is if we show a ton of social impact. We're basically charging based upon our ability to deliver all these outcomes. You can think of mentorship as the means to an end.
How do you measure social impact?
James Morrissey: One goal we have at the company is, in ten years we want to increase the national graduation rate by 20 percent.
Jackson Boyar: Right now, the six-year graduation rate is 60 percent. Only 60 percent of students are graduating. We'd love in ten years for people to look back and say Shearwater was a huge part in getting that 60 percent to 80 percent. And I think that would be a huge contribution, not just to families, but to the economy because of how much debt they're taking on.
(Note: Shearwater International is not a client of mine, nor do I have any other business dealings with the company.)