Higher Education Needs a Numerator

Lamar Alexander has a pretty interesting piece in Newsweek pushing the idea that you should be able to get a bachelor’s degree in three years. I think, however, that any innovation around this theme is ultimately going to be hampered by the same problem that befalls nearly all efforts to provide cost-effective higher education: Nobody knows what the numerator is.

Which is to say that the claim you’d want to make as a proprietor of a three-year college is something like “our students get 95 percent of the learning in 75 percent of the time and at 80 percent of the cost.” But we don’t have any systems in place to measure, even very roughly or extremely imprecisely, how effective different colleges are at actually teaching people. Instead we have this kind of prestige-based economy of higher education in which basically nothing can change. There’s an aristocracy of fancy private institutions that raise tons of money and get tons of applications and can thus be very selective in their admissions and raise tons more money. And in any given state university system, a couple of campus are designated as the “good” ones so they get the best applicants and thus wind up with the best students and thus stay as the good ones. The other branch campuses tend to languish in semi-obscurity.

When schools invest money in self-improvement, the tendency is not to use the funds to improve the quality of the education but to use it to improve the quality of the students. Offer a more generous aid package to a student who capable of being accepted at a more selective institution, and you can wind up generating a higher quality of graduate through pure selection effect. And that improves your reputation, and thus your fundraising and your applicant pool.

The whole set-up makes it extremely difficult for outside-the-box efforts to improve value to get a toe-hold. You can’t really prove that you are offering value, for one thing, and cutting your price can even serve as a counter-indicator of quality and make your school look like some kind of second-rate, bargain bin institution.