A threat to traditional higher education (and I like it)

As a teacher, I like to see what's going on in the world of education. There's an article in the Chronicle of Higher Education that tells of something called "Alternative Certification." It's a new development in the education marketplace that should make many educators nervous. I actually like the idea.

The announcement of agreements between Burck Smith's StraighterLine and the Education Testing Service (ETS) and the Council on Aid to Education (CAE) to provide competency test materials to students online is potentially very important, along with several other recent developments. It all comes down to economics to explain why this is important.


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. And, of course, this is the problem--no competition.

So colleges have been able to raise prices at will, knowing that students and their families will pay through the nose. But people are now asking an important question: Aren't there cheaper ways of certifying competence and skills to employers?

If someone could offer a less expensive job-hunting license--one that assessed an entry-level job-seeker's worth to a prospective employer at least as accurately as a college degree does--then the demand for college would plummet, as young adults could realize the same gains from a much smaller investment. I'm OK with this since the market should be allowed to operate and come up with better alternatives.

That's where ETS and CAE come in. They will offer two tests. One, called iSkills, "measures the ability of a student to navigate and critically evaluate information from digital technology." The other, the CLA, "assesses critical learning and writing skills through use of cognitively challenging problems." Students can tell employers, "I did very well on the CLA and iSkills test, strong predictors of future positive work performance." The idea is that the business can hire people for less than they would have to pay college graduates who score less well on these tests.

If the practice became widespread, it would drive college costs down and force cost-cutting and downsizing within the higher-ed industry. Sounds great to me. But you can expect the industry to fight hard against it.

I'll discuss ways the schools and colleges will fight back in the next blog.