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

by Grace

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


6 Responses to “An important step in breaking higher education’s credentialing monopoly?”

  1. Hmm, so in software students are actually LEARNING something during their college years and getting some value for their money. That may be different from some other fields of study.

    I think initially these do-it-yourself competency options will be the route taken mainly by poor but ambitious students.


  2. “That is kind of going in the opposite direction, wouldn’t you think?”

    I don’t know, but perhaps employers are simply facing reality about their need for actual skills.

    I was thinking “poor but ambitious” students would be the ones with the initiative and persistence to seek out mentoring (or maybe already have it) and other factors important for their success. I’m not in the trenches to see if these kids really exist, but I’m hopeful.


  3. It occurs to me that having a mentor has become more important, even vital, than in years past. I just a few days ago read something about how having a mentor was the single most important factor in academic success, or something like that.

    Maybe it used to be less important to have a mentor because the demands of school didn’t require so much parental oversight. You didn’t used to need parents helping you with homework, whether it meant taking you to the craft store for school project materials or helping you navigate the Internet for your 3rd grade puffin report. Similarly, applying to college wasn’t as complicated as it is now. I speak as a former “poor but ambitious” student who did not have parents, wondering if I would be able to navigate today’s academic landscape as successfully as I did back then.


  4. Well…I think mentors were important when I was in high school too, at the end of the 70’s. Some of the opportunities I had came about only because of the interest of teachers at my school. I wasn’t from a poor family, but my interests were completely outside the area of expertise of my family. I also know of some things that were messed up when there wasn’t someone outside the family giving advice.


  5. I think mentors have always been important, but nowadays mentors seem to be needed for the most basic of academic needs, like making a smart student understand that a “due date” is when an assignment is actually due. Believe me, I learned that just fine in high school without a mentor. I just think K-12 schools have changed to the point that they’ve curiously lowered standards while at the same time raising expectations, if that makes any sense. 😕



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