Colleges: Does a Market-Driven Approach Work?

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The Background
Back in the seventies, when everybody discovered graduate business schools and MBA's (the graduates of which probably brought us to our present pass), you had to be pretty clever to succeed in a graduate school of business.  Most of those who were accepted were not business major graduates, but engineers.  Through the next several decades, graduate business schools were not so much working on improving their product, but in increasing capacity and flow; in other words, they succumbed to their own propaganda, and began pandering to rich graduates who wanted to buy qualifications in order to legitimize their ambitions to get into the upper echelons of business and industry, even if they were light on quantitative skills, and heavy in personality and ... what can I call it?  --Bullshit.

From basic bullshit, they progressed to intermediate- and eventually advanced bullshit.  They began to take courses in Political Science and Economics, learning both the benefits of rhetoric and corruption, and the bullshit substitutes for substance and quantitative analysis.

It was inevitable that, over the years, Business Academicians gradually lost their quantitative analytical skills, while their bullshit skills were strong.  While they puzzled over the curriculum they inherited from their more quantitatively skilled predecessors, seeking how to support a migration towards a more bullshit-based curriculum (and how to sell it to the curriculum overseers with more bullshit), they noticed a surprising (to them) trend with incoming freshmen: they couldn't do math.

"The poor darlings can't do math!" they howled.  "How will it help our school if this disgustingly quantitative curriculum forces them to flunk out?"  Administrators paid attention, their ears flapping.  They, too, were a little stronger in bullshit than in numbers, and depended on the Business schools to explain numbers to them, little knowing that number-explaining was the least of the skills of their business colleagues.

What happened next
As graduate business schools upped their production capacity, they spewed out graduates, some of whom found their way into schools of Education Administration.  After all, who needs money more desperately than colleges?  (Why else would colleges hire presidents at ever greater salaries?)

Inevitably, the focus changed from "What would we like to teach our little students?" to "What would our incoming freshmen like to see in our major descriptions?  What would impress their rich little parents?"

It turns out that what impresses the parents brings the kids in, but what the kids like keeps them in.  It is possible to attract a few bright, poor students with scholarships, so that the student profile isn't completely dismal.

Meanwhile, of course, some of these MBAs found themselves working for --you guessed it: Colleges.  Actually, they might not work for colleges, but the big universities that educate college presidents (people who earn degrees such as Doctor of Education) began to educate their students --who would go on to steer colleges across the nation-- how to keep a weather eye on the almighty dollar.  Over the years, they began to encourage keeping not just a weather eye, but both eyes on the financial foundation of a college's operation.  Traditionally, of course, college presidents have always been involved with raising money; it is almost the only thing they do.  But increasingly, the following question has become more important: what can we do to make our school more attractive to major philanthropists?

As it happens, major philanthropists are eager to give their 'hard-earned' money to schools that have a good financial foundation in the first place.  This means that they can attract paying students (in contrast to bright students) with their interesting curriculum, and good graduation rates.

Some schools improve graduation rates by making their faculty work harder.  Some schools improve graduation rates by encouraging less draconian standards.  Some schools increase graduation rates by providing lots of free private tutoring for students.  Other methods are:
Very careful monitoring of student progress, and timely intervention.
Very careful admission standards, so that students are prepared for success.
Careful control of student course schedules, to make sure students never bite off more than they can chew.
Careful control of curriculum development, so that harder courses are phased out, and easier courses created and put in place.

These steps have some indirect and unintentional consequences.

1.  Students, over the years, take less responsibility for their own success.
2.  Students begin to believe that they have the right to be entertained and kept engaged by the professor.
3.  Students do not take charge of studying, but expect that the instructor will provide study materials, and create course summaries for their students.  A student who creates his or her own summary learns an enormous amount more than one who simply get a present of a course summary.  But schools and instructors dare not take the risk that a class will not study for the test all.
4.  Standards are creeping lower.

The fact of the matter is that it is a great mistake to consider incoming freshmen and the current students as the primary customers of the market model.  In the market approach to any business, you must know who you want to impress: the prospective buyer.  But in a school, the ones you want to impress are, guess what: the alumni.

Over the years, some alumni are more likely to contribute to the college far more than they ever contributed in fees.  Alumni are also in a position to hire new graduates.  They are also in a position to impress folks with the quality of their alma mater.  So a school has a choice of going two ways: to pander to full-fee-paying, affluent students, who do not need to depend on scholarships and financial aid, but who are probably academically weak, and to accommodate whom the school has to lower standards, OR to focus on stronger students, who may be less financially able, but who have the potential to graduate well, and go on to earn positions in which they can support their former school, and hire its graduates.

Schools, in fact, mostly have a strategy somewhere in the middle.  But the younger administrators in any school are increasingly uncomfortable pursuing a strategy in which the payoff comes in the --to them-- distant future.  The Almni themselves, who often constitute a large component of the Board of Trustees and its financial branch, often encourage the school to pursue a "financially sane" admissions policy, thinking to themselves that it is more important to have any younger alum colleagues at all, rather than a few bright, capable alum colleagues.  So all the instincts of everyone involved are poisoned by the new Business sensibilities.  But the damage is done; building an academically strong school takes a back burner to dealing with the perceived permanent state of financial crisis.

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