Are College Degrees the New Taxi Medallions?

Rachelle Peterson

This article originally appeared on Minding the Campus on November 16, 2014

In 2011 two of New York City’s prized taxi car permits sold for $1 million dollars apiece. In June 2013, another went for $1,050,000. A Craigslist ad from October 27 offered one for $1.1 million—2014 Toyota Prius included. A bachelor’s degree hasn’t reached a million bucks yet, but with college costs rising 1225 percent since 1976—compared with a 279 percent rise in the consumer price index—the million-dollar degree may not be so far-fetched.

The aluminum plates affixed to car hoods distinguish the legal mustard-yellow sedans from the solid black “gypsy taxi” Lincoln Town Cars. Why the need? New York City law caps the number of taxis at 13,237. The original idea when the medallions were introduced in 1937 was to curb traffic. The private black cars may transport those who arrange and schedule pick-ups in advance, but only the medallioned ones may stop for the outstretched hailing arm on the side of the street. That makes taxiing NYC passengers especially lucrative—and the ownership of the exclusive medallions a sure-fire investment. At the time of the million-dollar sales, the New York Times calculated that owning a medallion was better than owning a house, gold, or oil: the medallions’ value had increased approximately 1900% since 1981, versus the 1100% rise in the Dow Jones.

Since then the city has begun opening up additional medallions for individual taxi drivers who own their own cars (minimum bid: $650,000). But the metal stickers are still expensive, yet necessary investments in order to buy the privilege to compete in the passenger ferrying service. These artificial barriers to entry protect the interests of medallion-owning taxi drivers, but stymie the courier industry with massive inefficiencies that jack up prices for customers. As college grows increasingly expensive and more students take on more debt, and as having a degree is consistently linked to higher earnings and better career prospects, some are beginning to think of college in the same way. College, in this view, is a pricy but important investment. And primarily on those grounds, it’s seen as worthwhile for those who go.

That poses a question. Which is more important when it comes to college: the knowledge and education, or the diploma? “Competency degrees,” a new trend in higher ed to award college credit for life experience and professional skill, answer with the latter.

The taxi metaphor eventually breaks down, of course. Graduates don’t have metal labels on their foreheads, and slots for college admissions aren’t artificially capped by law. Colleges might not be wholly open in their admissions standards, but they’re not the epitome of a cartel, either. Most students who want to go to college can find an institution somewhere that will admit them. And getting a college degree isn’t a legal requirement to enter most fields.

But if there’s no government mandate to get a degree before entering a career, there is in many cases a social mandate. Employers want to see a college education on job candidates’ resumes—regardless, critics say, of whether the prospective employee has the appropriate skills and knowledge. That crowds out qualified but non-degreed applicants. In that regard, the taxi medallion metaphor is apt. Having an expensive permit to drive other people around has no correlation to the actual competence of the driver. Perhaps there are some tangential regulatory benefits in the form of screening out the truly inept and crazy. But the medallions don’t make the drivers any better at operating cars or navigating maps; they just set up massive barriers to entry that protect the exclusive few who got in. (Then again, sometimes it seems there really are some crazy taxi drivers.)

One response to the problem is to agitate against college in the first place. Just as Uber, Lyft, and other start-up app-based car-sharing services have begun to challenge the taxicab monopoly, higher ed is facing its own online nemeses in the do-it-yourself un-college movement and other MOOC-based alternatives.  These have slowed since their high-profile launch a few years ago, though, as students remain interested in gaining accredited degrees, following some kind of coursemap, and interacting with professors live and in person.

The other response is to retroactively recognize and reward skills and knowledge with degrees, granting diplomas on the basis of competence, not just classroom time. This model, “competency-based education,” aims primarily at mid-career professionals high on experience but low on credentials. Many have some college but no degrees. Competency degrees offer them a plan b, proffering a way to bring their life-education above board in the currency that resumes and job offers trade in: diplomas. It’s like offering medallions to drivers of the black Town Cars: a way to expand the pool of credentialed participants in the economy by acknowledging officially what’s been there all along.

But will it work?

Competency education proceeds by assessing skills and knowledge alone, apart from coursework, classes, lectures, and books. It rightly recognizes that sitting in class and squeaking by with a C doesn’t necessarily prepare a student for the workforce. Merely having a diploma isn’t enough to perform well on the job. But it also reinforces the necessity of getting that college diploma. And it equates final outcomes—knowledge and skills—with what traditionally has been a relational, process-based conversation.

Sometimes students pay for access to online tutorials, which they can use as much or as little as they choose, earning credit based on several assessments that exhibit their mastery of the content. Other times, they simply demonstrate the skills and knowledge gleaned from years of professional work and life experience. Candidates then perform practical operatives that mimic professional activity, or they draft reports and papers that show their knowledge. The most aggressive form of competency education bypasses credit hours altogether and “directly assesses,” to use the Department of Education’s term, the prospective students’ abilities.

These directly-assessed students emerge with degrees but no courses and credits on their transcripts, just diplomas. “Student” in this case isn’t really the right term. The goals of the participant are not study, learning, research, and induction into an intellectual community, but recognition. And professors, in this iteration, are neither sages on stages nor guides on the sides. They’re more like assayers weighing, grading, and calculating the value of raw ore. The task is to mine out nuggets of gradable material rather than add the pressure and heat that turns carbon into diamonds. Gone is the importance of instructing and filling minds and introducing them to what Jacques Barzun termed “The Great Conversation.”

The idea of competency substituting for courses is growing in popularity. In July, the Department of Education paved the way for institutions to experiment with competency degrees by waiving various federal requirements and allowing the institutions to retain their federal aid eligibility. At the time, 350 colleges and universities expressed an interest in competency degrees, though accreditation requirements have proven tricky. College for America (a subsidiary of Southern New Hampshire University) and Capella University both gained approval from the USDE and the regional accrediting agencies for direct assessment programs. Three of the Big Ten universities—the University of Wisconsin, University of Michigan, and Purdue University—have also begun creating competency options.

Many of the current programs focus on professional fields, where practical skills and specializations are most conducive to competency assessment. Wisconsin offers nursing, information science and technology, diagnostic imaging, and communications programs through the UW Flexible Option, which targets the non-degreed middle-aged. At the University of Michigan, practicing physicians, nurses, dentists, and other health practitioners can earn a master’s degree in medical health by completing practical exercises. The University of Texas, too, has dipped its foot into the waters, starting with a bachelor’s degree in biomedical sciences through its $50 million-dollar Institute for Transformational Learning. Eventually it plans to expand to all STEM fields, starting with high school and ending in graduate programs.

But the idea is gaining traction in the humanities and social sciences as well, where reducing courses to their learning outcomes concedes the most valuable part of a college education: Socratic discourse, careful reading, and intellectual community. Purdue’s new Polytechnic Institute offers interdisciplinary competency-based bachelor’s degrees, drawing on faculty in Technology and Science, and Engineering departments, but also in Education, Liberal Arts, and Purdue University Libraries. The hope, Purdue President Mitch Daniels announced, is that “this degree program will serve as a model for other Purdue academic programs.”

In some regards, competency-based degrees portend significant economic benefits—to society and to students. Why not expand the number of credentialed employees? It gives a leg up to degree-less professionals who feel unfairly stinted in their careers. And as employers often complain that young recent graduates aren’t prepared for their professional responsibilities, competency education ensures students learn how to draft reports and assess public policy, not just pontificate on deconstructing Of Mice and Men

But here’s where the comparison with taxi permits truly breaks down. Education isn’t just about skills and professional preparedness. The competency model reduces education to discrete abilities and practical skills. It abases courses to the learning outcomes enumerated on their syllabi. And while it correctly diagnoses some of the maladies of higher ed (such as grade inflation and the inability to discern student aptitude from transcripts), competency models capitulate the ideals of liberal education to the quest for useful education. It cedes academia to job credentialing, and, ironically, entrenches the professional importance of graduating from college in order to succeed in the workforce. And it turns college degrees into licenses to work, making getting a job more expensive than ever. We know how that fared with taxi medallions. 

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