From ITIF – Creating alternatives to traditional degrees would let students pursue their best options for learning and apply competitive pressure on colleges and universities to improve quality and reduce the costs of education.
Across modern economies, innovators and entrepreneurs are marshaling the power of information technology to reorganize business processes and reimagine entire industries, thereby improving quality and lowering the costs of goods and services. But higher education has largely escaped such disruption, even as IT and the Internet have created new ways to research, learn, and impart knowledge. The reason is that colleges and universities hold a unique franchise: They are responsible for educating students and for granting them degrees. Schools thus lack incentive to help students learn outside the classroom, even if it would lower costs or be more effective, since it would cut into their revenue, and they lack incentive to raise standards for their degrees because it would drive away customers. Students meanwhile have little incentive to push themselves harder than necessary to earn their degrees, since degrees are opaque, deriving their value from institutional brands rather than clear measures of academic achievement. This paper argues that the federal government should spur reform by promoting alternatives to traditional college diplomas that allow individuals to more effectively demonstrate educational mastery to prospective employers. This would give students the freedom to pursue their own best options for learning, incentivize students to study harder and schools to teach better, and apply competitive pressure on colleges and universities to reduce the costs of education.
There are at least two major problems with allowing colleges and universities to control through granting of degrees the primary way learning outcomes are assessed. First, these institutions usually limit students from mixing and matching various, and usually cheaper, ways of learning, such as community college courses, massively open online courses (MOOCs), or self-study, if students want to receive the “sheepskin” showing mastery. So even though information technology should be making higher education more efficient, tuition costs are rising faster than inflation, making college less affordable. Second, since each college and university has its own grading practices and degree standards, students, parents, and employers have little ability to compare the quality of education that different schools provide for a particular degree. Instead, each school is evaluated mostly on reputation and other factors such as quality of its facilities, notoriety of its graduates, and SAT scores of entering students. This lack of transparency regarding outcomes diminishes the incentives schools have to compete on how well they actually educate students, and also the need for students to work hard, because many know this will have limited bearing on their future employment prospects, as long as they do enough to simply earn a diploma. This is one explanation of why the quality of higher education in the United States is uneven, and many college graduates enter the workforce underprepared.