By Richard Vedder
The recently departed commissioner of education statistics, Mark Schneider, says American colleges are "failure factories", pointing out the dropout rate (after six years, yet) is far higher than the much more criticized high school dropout rate. INSIDE HIGHER ED asked another former Ed Department official, the indefatigable Cliff Adelman, for his comments, and they were not particularly favorable, implying Schneider has some hostility towards higher education (Cliff himself, however, is no shrinking violet, and has been known to be highly critical as well). Cliff notes, for example, that because of the plethora of part-time and transfer students, the published grad rates are seriously deficient, a point with some validity.
Even Cliff acknowledges, however, that roughly one-third of students have not graduated within EIGHT years (time enough even for most part-timers to graduate). And it does not seriously question Mark Schneider's contention that there are literally hundreds of institutions with published graduation rates below one-third. Why do we keep funding these institutions? Why do we not punish failure? Many institutions take students they KNOW will fail, robbing them of their tuition monies and giving them false hopes, only to have them left degree-less and debt-ridden.
This gets to the major problem. There are almost no consequences for substandard performance or behavior in higher ed. Because of grade inflation, students who goof off in class usually get by and graduate. The intellectual content of many courses has become sadly diluted, and the course content highly suspect, with kids even getting credit for learning how to get around the university campus (through credits given for orientation classes). Schools that take kids who are highly unlikely to graduate get subsidies for taking those kids.
Above all, there is no bottom line. In the 2007 FORTUNE 500 list, AIG was the company with the 11th highest market value; today it is history. Citigroup was 8th in 2007, and not in the top 20 in 2008. Capitalism punishes those who make mistakes, and punishes them brutally. And rewards are great too. Between 2007 and 2008 Berkshire Hathaway added over $40 billion in stockholder value as it rose from 14th to 7th on the Fortune 500 companies by market value.
Yet rankings of college show modest change over time. The top 10 schools in 1940 are, roughly speaking, the top 10 schools today. With no discernible way of measuring quality, we assume schools remain constant, no matter how ineptly they are managed, no matter how neglectful the school becomes of undergraduates, no matter how much the curriculum is diluted.
Mark Schneider may not have raised colleges' self-esteem, but he should be commended for telling it like it is.