The Price Is Right
The press has been chattering recently about the “confusion”
diploma mills are causing government and industry. And, as always,
the Internet is only making things worse. Diploma mills are companies
that, for a nominal fee, will grant you any college degree you like
based on whatever life experience you claim to have. Some require
applicants to write an essay or two, while others have streamlined
the process to simply cashing the checks and mailing the diplomas.
Diploma mills have been around for decades, but revenues have doubled
over the past five years. It seems Internet marketing is the engine
driving that growth. We are bombarded daily by banner ads and spam
email offering to sell us a college degree that will move our career
to the next level, and there is no shortage of takers.
Last year the US General Accounting Office completed an investigation
of the academic credentials of senior military officers and high-ranking
federal employees. They discovered hundreds of individuals, including
dozens in very senior positions, had used government funds to obtain
degrees fromdiploma mills. Estimates are that there are thousands,
perhaps tens of thousands, of such degree holders employed by the
Congressional hearings were held, policies were dictated, and an
abundance of righteous indignation was vented over the “scam”
these institutions were perpetrating on all of us.
But no one is talking about the most shocking finding in the GAO
report. Although many of us have suspected it for a long time, the
implications are too frightening.
Those with the fraudulent degrees were doing their jobs just as
well as those who had attended real colleges. It took a lengthy
and expensive audit of the educational credentials of thousands
of people to identify the fake degree holders. Actual ability and
job performance would never have given them away. More than anything
else, the GAO research clearly demonstrates that there is little
or no relationship between academic qualifications and job performance.
Of course, that train of thought goes to destinations unknown,
so it's much better to stay on track and blame the diploma mills
for all the confusion they are causing. At this point, it’s
pretty obvious that this controversy will be resolved by legislating
these companies out of existence. All industrialized societies have
far too much invested in the myth of higher education to allow it
to be seriously questioned.
Safe in that knowledge; lets see what happens when this myth is
What's My Line?
A microcosm of the higher-education myth played itself
out during the bubble days of the late 1990s. At the time, software
engineers were in demand, but the technology was new, and employers
had a hard time evaluating potential employees. Software companies
saw the business opportunity and quickly came up with an array of
certification programs. Most of these programs consisted of a few
days of lectures followed by a simple test. Almost everyone that
attended these lectures received their certification, and for the
most part, graduates were profoundly unqualified to manage the systems
in which they were certified.
But of course, that was just fine. Getting people to believe in
the value of an education has nothing to do with education. It’s
about marketing, and the marketing strategy was simple and brilliant.
These companies spent half their marketing dollars convincing employers
that certification was important and should be included in job requirements.
This was surprisingly easy to do at the time since companies were
desperately looking for ways to vet applicants. They then spent
the other half of the marketing budget convincing job seekers that
most employers required these certifications. If done properly,
the result is a lucrative self-fulfilling prophecy.
In the year 2000, it looked like software certifications would
become as established as college degrees, but the bursting of the
Internet bubble reduced job demand and led employers to question
the value of such certifications. Only a small fraction of these
certification programs exist today.
I believe the reason software certifications failed where college
certification succeeded is two-fold. First, software certification
developed far too quickly to be credible. In only a few years the
industry went from having a handful of well known certification
programs to having hundreds of which most people had never heard.
Second, and perhaps more important, in many cases employers ended
up paying for these certification programs themselves, and were
therefore much quicker to question their value when budgets got
If employers were paying for their employee’s college degrees
today, we would be hearing very different accusations about who
is being scammed.
Let's Make a Deal
Let us suppose that we run a business and need to
send our employees for training. We send half to School A, in which
training costs $1,000 and takes one day. The other half, we send
to School B, which costs $100,000 and takes four years. After completing
their training, both groups of employees perform their jobs equally
In this situation, we would naturally and correctly conclude that
the expensive four-year program was a scam. However, if the employees
must pay the training costs out of their own pockets, and if we
too have invested in an expensive multi-year program, we reverse
our conclusion and declare that the inexpensive one-day school must
be shut down.
In all discussions about the diploma mills, the educational value
of real colleges is simply asserted. Most often with a rhetorical
question along the lines of “Would you want someone with a
diploma mill degree performing surgery?” Well, no I would
not. However, when examined closely, the question is an indictment
of higher education in general rather than diploma mills.
When lives are actually at stake, society recognizes that there
is little relationship between education and ability. Being a doctor,
a pilot or a professional civil engineer requires extensive and
continuing certification based on real knowledge and experience.
No one in these fields pretends that a collage degree demonstrates
competency. Only in low-risk professions do we indulge ourselves
in the myth.
The $64,000 Question
So how did higher education convince us of the value
of their certification?
The same way the software companies did it. Great marketing.
Higher education is truly a capitalist success story. In 1940,
13% of college-aged Americans attended college. Today, that number
is 62% and it increases nearly every year. Furthermore, there used
to be less than 200 accredited schools offering degrees in the United
States, and there are now more than 4,500. Oddly, according to the
US Bureau of Labor Statistics, despite increased competition in
the marketplace, the cost of college has been rising an average
of a few percentage points faster than inflation every year since
Precisely what all this expensive education has bought us is unclear.
We like to tell ourselves that life is more complex than it was
50 years ago, and that today’s society requires greater intelligence
than before. Unfortunately, not only is there no evidence to support
these assertions, but the claims have been popular at least as far
back as ancient Rome. We may be performing different tasks than
we were 50 years ago, but nothing really suggests that today’s
tasks are more intellectually challenging.
Higher education created the self-fulfilling prophecy that the
software companies could not. Although degree holders are no more
skilled than those who lack degrees, all large organizations use
these certificates as one of the most important criteria for hiring
Simply and circularly put, employers require degrees because they
need to have job requirements, and job seekers need degrees because
employers require them.