Critics of Ashford point to a high dropout rate -- about 80 percent -- but many traditional brick-and-mortar universities have four- year graduation rates that are less than 15 percent. What standards are the accrediting agencies using?
The discrepancies point to a conflict. Political leaders and wealthy foundations (the Gates and Lumina foundations, in particular) say we need to increase the number of college students to promote equal educational and economic opportunity but rein in the rapid inflation in college costs. But other powerful forces will work to control competition in higher education and are raising barriers to offering college at an affordable price, whether it is a for-profit such as Ashford or a venture such as Udacity, which plans to get its revenue from employers who use it to identify potential job applicants.
The financial value of a university degree comes from the diploma. Employers see that a student has met certain standards. All the degree represents, however, is the certification that a student has completed a package of courses, typically 40 to 50. Universities are in the business of packaging courses into degrees.
The advent of "massively open online" courses presents an opportunity to new packagers who come along and, after evaluating the quality and nonduplication of courses, confer degrees, perhaps consisting of 10 courses offered via Coursera, 10 from edX, eight from Udacity, five from StraighterLine or Saylor and 12 "live" classes at the local state university or community college.
At present, the archaic accreditation rules make that impossible even though such a package of courses would cost less than half the current price of a degree, and most courses would be prepared by accredited, even elite, institutions, or use academics who have done much of their teaching at those schools.
Yes, this new approach to credentialing competence is complicated and needs oversight. For example: How do students prove they are doing the online work? Some instruction calls for face-to-face contact. And many benefits of higher education relate to nonclassroom learning and socialization. Still, the question should be: Do the barriers imposed ensure quality and protect students, or stifle competition, innovation, access and affordability?
Vedder directs the Center for College Affordability and Productivity, teaches economics at Ohio University, and is an adjunct scholar at the American Enterprise Institute.