Beware: Alternative Certification Is Coming - Innovations - The Chronicle of Higher Edu... - 1 views
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George Mehaffy on 16 Feb 12"Beware: Alternative Certification Is Coming January 23, 2012, 4:42 pm By Richard Vedder 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. A little economics explains why this is so. In the first week of beginning economics courses, professors usually make this fundamental point: 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. 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? Employers like the current system, because the huge (often over $100,000) cost of demonstrating competency is borne by the student, not by them. Employers seemingly have little incentive to look for alternative certification. That is why reformers like me cannot get employer organizations like the U.S. Chamber of Commerce to take alternative certification seriously. But if companies can find good employees with high-school diplomas who have dem