Unlike elementary and secondary education, higher education in the United States operates in a mostly competitive, heterogeneous market. For students who have received a decent high-school education and are willing to relocate, a wide array of choices is available in academic and job-training programs at public, nonprofit, and for-profit institutions.

Traditional market theory posits that students, as consumers of higher education, will naturally gravitate to colleges and programs that offer high-quality education at an affordable price. The rational student, the theory maintains, will select a career that appeals to him or her and then collect information to weigh the costs and benefits of academic programs geared toward that career. On the whole, students will select colleges and programs where the benefits outweigh the costs. And resources will move from low-value institutions to high-value ones, forcing the former to contract.  

Unfortunately, this theory of accountability has been a weak force in practice. Its most serious flaw is that prospective students and employers woefully lack accurate information about the real costs and benefits of degrees from specific programs.

For students to make rational decisions, they need easy access to information that accurately describes the value of degrees from academic programs. Graduation rates, job-placement data, and scores on standardized tests—like the Collegiate Learning Assessment and those required for professional licensure—would help students compare and evaluate program benefits. Data on average completion times, tuition and fee changes, and loan repayment—if presented clearly, in one place—would aid students in calculating the true costs of programs.  

Until the public can efficiently determine the real costs and benefits of college degrees, students will continue to select colleges based on athletics allegiance, geography, and marketing. And the most career-oriented students will continue to make decisions based entirely on college brand. Consumer choice and market forces have little influence on the quality of student learning under these constraints.

Forrest Hinton is a research associate at Education Sector, an education-policy think tank.