The average graduation rate at four-year colleges in the bottom half of the Barron's taxonomy of admissions selectivity is only 45 percent. And that's just the average-at scores of colleges, graduation rates are below 30 percent, and wide disparities persist for students of color. Along with community colleges, where only one in three students earns a degree, these low-performing institutions educate the large majority of Pell Grant recipients. Less than 40 percent of low-income students who start college get a degree of any kind within six years.
Some might argue that colleges are just enforcing academic standards by refusing to graduate unprepared students. But the evidence suggests otherwise. A 2006 study from the American Institutes for Research found that only 31 percent of adults with bachelor's degrees are proficient in "prose literacy"-being able to compare and contrast two newspaper editorials, for example. More than a quarter have math skills so feeble that they can't calculate the cost of ordering supplies from a catalogue.
Read the whole thing. Carey argues that publishing more data on college outcomes would result in a better market. That presumes that the problem is on the supply side--colleges want to hold back information. The Masonomics view is that the problem is more on the demand side--the role that signaling plays in creating perceptions of value.
A point that I keep making about higher education is that it is, like the Harvard-Goldman filter, a form of recursive credentialism. To get certain jobs, you need certain credentials. And the most important credential of all is that you must signal your support for credentialism.