An important step in breaking higher education’s credentialing monopoly?

On the road to the dismantling of  higher education’s expensive monopoly on credentialing comes an announcement of new online testing options for students.  

First, a review of economics.

… If the price of something rises a lot, people look for substitutes. Resources (dollars) are scarce, and individuals want to make the best use of them. They “maximize their utility” by shifting away from high-priced good or service A to lower-priced good B.

Students and employers are stuck in our current system, where colleges hold credentialing monopoly.

With regards to colleges, consumers typically have believed that there are no good substitutes–the only way a person can certify to potential employers that she/he is pretty bright, well educated, good at communicating, disciplined, etc., is by presenting a bachelor’s degree diploma. College graduates typically have these positive attributes more than others, so degrees serve as an important signaling device to employers, lowering the costs of learning about the traits of the applicant. Because of the lack of good substitutes, colleges face little outside competition and can raise prices more, given their quasi-monopoly status.

As college costs rise, however, people are asking: Aren’t there cheaper ways of certifying competence and skills to employers?

…
New competency tests as college alternatives:

The search for alternative ways is leading to other entities offering credentials for much less than the $30,000-$60,000 per year that colleges charge.  New agreements between Burck Smith’s StraighterLine, the Education Testing Service (ETS), and the Council on Aid to Education (CAE) to offer online competency tests have just been announced.

Students can tell employers, “I did very well on the CLA and iSkills test, strong predictors of future positive work performance,” and, implicitly “you can hire me for less than you pay college graduates who score less well on these tests.”

Will it be more “fair”?
The suggestion is that employers will be a driving force in the move to alternative credentialing as a way to keep salary costs in line.  This could be true, pointing to a possible increasing class divide between high and low earners, with only graduates of elite residential colleges in the running for top salaries.  On the other hand, employers would be able to spurn the graduates of the many expensive-but-mediocre colleges in favor of alternatively credentialed employees who would be able to compete for jobs on a true merit basis.

More:  How quickly will the Higher-Ed Revolution happen?

It’s happening, almost overnight: what could be the collapse of the near-monopoly that traditional brick-and-mortar colleges and universities currently enjoy as respected credentialing institutions whose degrees and grades mean something to employers.

Related:  Higher education is a prisoner’s dilemma

How to get a free education

Unfortunately, this free education comes without the credentials.  Only traditional institutions of higher learning can offer those.  For now.

Marc and Angel Hack Life put together a list of 12 Dozen Places To Educate Yourself Online For Free, ranging from Khan Academy  to Open Yale Courses  to my new favorite, Bio’s Best.

Those people who take the time and initiative to pursue knowledge on their own are the only ones who earn a real education in this world.  Take a look at any widely acclaimed scholar, entrepreneur or historical figure you can think of.  Formal education or not, you’ll find that he or she is a product of continuous self-education.

Have fun!

Related:  Is higher education on track to lose its credentialing monopoly?

Is higher education on track to lose its credentialing monopoly?

Higher education may be at a crossroads, facing the possibility of losing its role as the main merchant of career credentialing.  Naomi Schaefer Riley wrote about this in her commentary on Peter Thiel’s initiative to lure entrepreneurial students away from college.

Colleges have long been engaged in an odd deal with students and their parents. Paying for a college education — or taking on a huge amount of debt to finance an education — is a transaction in which most of the buyers and most of the sellers have fundamentally different understandings of the product….

In the college transaction, most parents think they’re buying their kids a credential, a better job and a ticket, economically speaking at least, to the American dream. Most college professors and administrators (the good ones, anyway) see their role as producing liberally educated, well-rounded individuals with an appreciation for certain kinds of knowledge. If they get a job after graduation, well, that’s nice, too.

The students, for the most part, are not quite sure where they fit into this bargain. Some will get caught up in what they learn and decide to go on to further education. But most will see college as an opportunity to have fun and then come out the other end of the pipeline with the stamp of approval they need to make a decent salary after graduation.

Here’s a dirty little secret that’s quickly becoming common knowledge.

Thanks to the wonders of grade inflation and the lack of a serious core curriculum, it is possible to get through Harvard and a number of other high-price universities acing your computer science classes and devoting very little effort to anything else.

College students are spending less time studying, graduating with minimal evidence of academic growth.   Their course work often consists of random bits of dumbed down fluff classes.

Beyond the top tier, there are also gaping holes in higher education. Executives at U.S. companies routinely complain about the lack of reading, writing and math skills in the recent graduates they hire. Maybe they too will get tired of using higher education as a credentialing system. Maybe it will be easier to recruit if they don’t have to be concerned about the overwhelming student debt of their new employees.