This post is a piece I just wrote. I tried unsuccessfully to publish in five different venues and gave up, so I’m posting it here.
I focus on an issue that I’ve been thinking about for quite a while: How to understand the core business model that governs American universities. The answer is in the title. See what you think.
Universities Give Away Knowledge and Sell Degrees
Universities operate according to a strange business model: They give away knowledge but they sell degrees. Their brand is to be institutions of higher learning, but they don’t actually sell this learning. You can go to the library or look online and read all of the cutting-edge advancements in knowledge that their scholars have produced. When these scholars publish research in academic journals, they don’t get paid for their work; often they have to pay a processing fee in order to get in print. You may incur a charge to get past the publisher’s paywall, but none of this money goes to author or university. And only a tiny proportion of the academic books published earn more than pin money for the author. It’s true that academic inventions that are commercially viable can earn dividends for both scholar and institution via patents, but these are miniscule in number. It’s also true that scholars get rewarded by their home institutions via promotion and merit pay increases, but this money is not coming from all the people who read their research and benefit from it. The lucky latter get a free ride on the system.
We’re really talking about is two kinds of knowledge transmission here. One, which I’ve been discussing so far, is the knowledge produced by university researchers. Another, which is even more prominent – and certainly most pertinent to the average educational consumer – is the knowledge that students acquire when they enroll in academic degree programs. At both the undergraduate and graduate levels, people go to college primarily in order to accumulate the knowledge they will need in the workforce. In the process, they acquire a credential that certifies what they have learned in their program, which can then be traded in for access to jobs that require that knowledge. Students pay – often an exorbitant amount of money – for this service. But it’s worth the money if the return on investment is positive, where lifetime earnings increase by an amount greater that the cost of acquiring the degree.
Ok, we all know that. But my point is what students are really paying for is not the knowledge but the degree. They qualify for graduation by accumulating the number of course credits that the university sets for that degree. And they earn these credits by passing a series of classes that meet program guidelines, with each class offering a set number of credits to the students who pass it. At my university, Stanford, a BA degree requires 90 credit units, an MA typically requires an additional 45 units beyond a BA, and a PhD requires an additional 135 units. The number of credit units for a given course is roughly a measure of the number of hours the class meets per week, so a three-credit class would typically meet for three hours a week.
Universities strongly discourage anyone who is not registered from sitting in on classes. So, even though most instructors don’t bother to enforce the rule, this means that for the most part only official students are receiving instruction in each class; and the credits they earn are their reward for learning the material at an acceptable level. All of which suggests that, as advertised, students are indeed paying for knowledge via their tuition dollars.
But let me provide an example from my own experience, which calls that conclusion into question. For three years, I held the most unpleasant academic position of my life, as the associate dean for students at the Stanford Graduate School of Education. Most of this involved doing things that faculty didn’t want to do – lots of administrivia and meetings, plus resolving problems with students and their difficulties with advisors and instructors. But in the process, I learned a lot about the inner workings of the university, in particular with regard to the university registrar’s requirements for student progress and graduation. At one point, I got in a fight with the registrar about the credits required for a PhD. Even after appeal to a committee of the faculty senate, I lost the battle; and the reason for this loss gave me a flash of insight into the university business model.
Here was the issue. Doctoral students at Stanford often enter a PhD program with a master’s degree already in hand. Those students can apply to transfer up to 45 credits from the master’s program toward their PhD, and this is usually approved if the master’s work is relevant. This means the student only needs to earn 90 new units at Stanford in order to reach the required total of 135. But, as part of their doctoral programs, education students in particular are encouraged to pursue part of their coursework in a disciplinary area that is central to their research interests. And students often choose to take enough courses in a particular discipline (a minimum of 45 units) to qualify for earning a master’s degree in, say, psychology or sociology or economics, in addition to their PhD in education. This degree is useful to students by helping them signal a disciplinary identity in the job market as an adjunct to their identity as scholars of education.
The problem the registrar raised was that a number of education students had been double counting. They had been transferring 45 units from a previous master’s in education and then earning an MA in a discipline as part of the doctorate. The registrar said they were gaming the system by getting both a Stanford MA and PhD for only 90 units. His logic was impeccable: We don’t sell PhDs for only 45 additional course credits.
The issue was not that they were taking all those courses in a discipline as part of their doctoral program. Instead, it was that they were seeking to certify this course work with an MA. They could gain all the knowledge from these courses and graduate with a PhD for 90 units. But if they took the courses and also applied for an MA degree, they would have to pay an additional 45 units. The message was clear. The university charges for degrees not for knowledge.
I later heard an analysis that put this insight into a broader perspective. A few years after this incident, Stanford’s then-provost, John Etchemendy (a philosopher by training), explained the nature of the university to the faculty senate when it was discussing an issue about credentialing. The university, he said, is a certifying organization. It certifies what knowledge is valid, who has the expertise to teach it, who is qualified to learn it, and which learners have sufficiently mastered it.
In higher education, form often matters more than substance. A diploma is a signal to the market that you have certified expertise. The certificate means that employers don’t need to ascertain the depth of an applicants’ knowledge on their own. The university says they have this knowledge, so enough said.
The university is the primary knowledge-producer in modern societies, but it doesn’t have a monopoly on this production. Corporations, think tanks, government agencies, and independent scholars, and inventors also make large contributions. But what universities do have a monopoly on is the process of certifying which individuals possess what knowledge.
Consider a thought experiment. How many people would spend massive amounts of time and money enrolling in university instructional programs if the resulting degrees were no longer required for entry into the most desirable occupations? A number might still want to pursue the university experience for reasons of the love of knowledge, personal interest, esthetic pleasure, broadened horizons, and social engagement, but most prospects would reasonably conclude that this experience was not worth the considerable cost.
Moreover the emphasis on form over content is not peculiar to higher education. Elementary and secondary education also has a formalistic quality about it. Consider the “Schooling Rule,” as formulated by John Meyer and Brian Rowan: “Education is a certified teacher teaching a standardized curricular topic to a registered student in an accredited school.” Your job as a student is to pass tests, gain promotion to the next grade, and graduate from high school. And this diploma gives you a ticket of admission the next level of the system – where you pass more tests, pick up course credits, and earn another diploma. The process may continue on to the graduate level. At whatever level you complete your schooling, your terminal degree will decide the highest occupational level you’re likely to attain.
Keeping this in mind, it is perhaps more accurate to call systems of education what they really are, which is systems of schooling. In these systems at all levels, schools are giving away knowledge and selling degrees. The transmission of knowledge in these institutions is not irrelevant to their overall function but it is less the main effect than a side effect. What makes them schools is the role they play in certifying this knowledge.