Credits as Currency

One of the most interesting things going on in higher education is the Bologna Process, which is (to oversimplify a lot) an attempt to create a European common market for higher education. In the past, European countries have had very different ways of signifying postsecondary learning, both at the course level (credits) and credential level (degrees). This created a lot of friction and uncertainty in the labor market, making it harder for students to bring credits across national borders and for academics and employers to fairly judge the value of foreign degrees. Now Europe is moving to a standard 3+2 degrees cycle (3 years for a bachelors and 2 years for a Master’s, in American terms) and creating a great deal more transparency with respect to what, exactly, students who have earned credits from a given program or university have actually learned. That transparency, in turn, is the foundation for assuring that credits have value and mean what they say.

In part, the Bologna Process is a move to catch up with the United States. Just as there are no tariffs on interstate commerce, for a long time the United States had a much more open economy for college credits, with common degree cycles and the underlying assumption that credits are transferable from one institution to another. But beneath the surface there is still a great deal of the same kind of friction and uncertainty that the Bologna process is designed to reduce. Credit transfer for many students can be a bureaucratic nightmare. You can read the story of one such student in my new Chronicle column, here. (Readers have raised a lot of good issues / questions in the comments string.)

Overall, I think we’d be better off thinking about credits in more explicitly economic terms. They are a funny kind of currency, one whose value basis is not verifiable evidence of what you’ve learned but rather how long you’ve been taught (thus, credit hours adding up to two and four year degrees). You can only exchange them for a few classes of assets (degrees) that were established a long time ago and are rigidly applied to a huge array of disparate disciplines and academic programs. They’re also inflexible: There’s little difference in the job market between having one college credit and 119; both add up to “no bachelor’s degree.” The same is true for 120 and 200; you don’t get to keep the change if you earn more credits than you need. Tariffs, i.e. the inter-institutional credit tax imposed when colleges refuse to accept another college’s credits in transfer, are simultaneously large and nontransparent; oftentimes students aren’t told how many credits they can import until after they move from one school to another.

A lot of the craziness in the system stems from the fact that accredited colleges are simultaneously in the business of providing and certifying education. These functions don’t necessarily have to be in the same place; the fact that they are creates incentives for policies that are obviously disadvantageous to students. As I note in the column, Kent State University seems to have an very rigid set of standards for accepting credits earned via paying someone other than Kent State, but a much more sanguine attitude when Kent is the one cashing the checks. Like, for example, awarding an entire semester’s worth of credit for interning at Education Sector. This, of course, is also a main source of institutional enthusiasm for study-abroad programs — if you enroll for a semester at the University of Helsinki, which doesn’t charge tuition, you still have to pay full tuition to your home institution for the privilege of transferring the credits home.

In the long run we’d be better off with more separation between the education and credentialing functions and more transparency all around. The Bologna Process is very transparency-focused, which raises the possibility of Europe going from having a much less efficient higher-education market than the U.S. to a more efficient market in the span of a generation.