CREATING SEAMLESS CREDIT TRANSFER:A parallel higher ed system to support America through and beyond the recession BY MICHAEL B. HORN & RICHARD PRICE

APRIL 2020

TABLE OF CONTENTSExecutive Summary

Introduction

The story of Electronic Health Records

Why credit transfer interoperability is hard in higher ed

Creating credit interoperability

Third-partyorganizationsthatcertifylearning

Specifiability,verifiability,andpredictability

A call to action

Conclusion

Notes

About the Institute, About the authors

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EXECUTIVE SUMMARYIn an era of increasing data interoperability in almost every sector of life, the idea that today’s students can’t seamlessly transfer credits from one institution to another seems preposterous. Yet higher education’s broken credit transfer system has plagued students and stumped policymakers for decades—to this day, first-time students who transfer lose 43% of their credits on average. This increases their time-to-degree, tuition costs, debt load, and opportunity costs.

AsCOVID-19wreakshavocon institutionsandthestudents theyserve,ushering in a recession that could have existential implications for all,helping learners earn the credentials they need from the providers bestsuited toserve themwillbeacritical issue indetermininghowwellandrobustlythenationrecovers.

Thefederalgovernmenthasalreadyprovidedincreasedfinancialsupporttopostsecondarystudentsandinstitutions.Morestimulusfundsarelikelyontheway,offeringarareopportunitytonotjustshoreupexistingmodels,butalsotoprovideamuch-neededjolttothecalcifiedcollegiatesystem,andtorethinkhowitsplayers interact.Directingadditionalfundstowardinteroperability issues could go a long way in alleviating credit transferchallenges.

But history from just a decade ago in the field of healthcare showsthat how this is done—not just that it is done—willmatter.Manyof theinteroperabilityconstraintsfacedbythehealthcaresystem,whichtriedtohelp patients transfer their records from one provider to the nextmoreeasilyandaffordably,plaguecollegeanduniversitybusinessmodels—andhigher education would be wise to learn what it can from healthcare’sflubbedattempt.

Inordertotacklehighereducation’scredittransferchallenge,theDepartmentof Education, alongwith state departments of higher education, shouldfosteraparallelhighereducationsysteminwhichtheysupportthird-partycredentialingentitiesthatvalidateindustry-valuedskills.Regulatorswould

useadditionaldollarsthatarefocusedontrainingstudentsforin-demandjobsinthistimeoframpantunemployment,suchasexpandedPellgrants,tofundtheseefforts.

Thismoveawayfromaninstitution-centeredposturetooneinwhichthird-party bodies are the assessors of quality and gatekeepers of credentialswould skirt the debates about whether learning at one institution isequivalenttothatofanother.Sucha learner-centeredapproach,focusedon the accumulation of knowledge and skills, would facilitate seamlesstransferwithout credit loss, shift significantportionsofhighereducationfromseat-timetocompetency-basedlearning,andhelplearnerstransitionexpeditiouslybackintotheworkforce.

Helping learners earn the credentials they need from the providers best suited

to serve them will be a critical issue in determining how well and robustly the

nation recovers.

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INTRODUCTIONAttempts at creating an interoperable higher education system—one in which students can transfer seamlessly between colleges without accumulating wasteful credits and debt—have long frustrated policymakers.

Thirty-eight percent of first-time students transfer schools within theirfirst sixyears, according to theNationalCenter forEducationStatistics. Manychangeinstitutionsmorethanonce.Thesestudentslose,onaverage,43%oftheircredits—roughlyonesemesteroffull-timeenrollment—whichincreases their time-to-degree, tuition costs, debt load, andopportunitycosts.

Despitearangeofefforts,includingcommoncoursenumberingsystems,mandates,systemwidearticulationagreements,andbetterandmoreopendatabases and application programming interfaces, it’s hard to get anyorganizationtodosomething—inthiscaseacceptallcreditsthatstudentsearnatotherinstitutions—whenit’sagainsttheinterestsoftheirbusinessmodel because it is not how they make money and it creates more work forthem.Notonlythat,butfacultymembersatcollegesanduniversitiesalso rightly believe that there are genuine learning differences betweenschools. What a student studies at one school may not be the same as or evenequivalenttowhattheywouldhavedoneatanother,whichcausescollegesanduniversitiestobewaryofgrantingcredittowardamajorordegreefromcoursestakenandpassedatotherinstitutions.Studentswhotransfersufferaccordinglyintheformofclassesthatdon’tcountandtheassociated costs.

AsCOVID-19wreakshavocacrosshighereducationandarecessionloomsthatcouldhaveexistentialimplicationsforsomecollegesanduniversities,thefederalgovernmenthasalreadyprovidedincreasedfinancialsupporttopostsecondarystudentsandinstitutions.Morestimulusfundsarelikelyonthe way in the months ahead.

Additionalfundsofferarareopportunitytoprovideamuchneededjolttothecalcifiedcollegiatesystemandtacklethechallengesthatcredittransferposes.Buthistoryfromjustadecadeagointhefieldofhealthcareduringatimeofrecessionandeconomicstimulusshowsthathow this is done—notjustthat it isdone—willmatter.Billionsofdollarsandthesuccessofstudents are at stake.

Tomakeadentinthechallengecredittransferposes,theDepartmentofEducation,alongwithstatedepartmentsofhighereducation,shoulduseadditionaldollarsfocusedontrainingstudentsforin-demandjobsinthistimeoframpantunemployment—suchasexpandedPellgrants—tofosteraparallel system inwhich theysupport third-partycredentialingentitiesthatvalidateindustry-valuedskills.Institutionswouldnolongerbethesolegatekeepersofcredentialsinthisworld.

Thismoveawayfroman institution-centeredposturetoamore learner-centeredonefocusedontheaccumulationofknowledgeandskillswouldfacilitateseamlesstransferwithoutcreditloss,asthefederalgovernmentandotherentitiescouldbeginpayingforoutcomes.Inessence,theycouldpay institutions as students demonstrate mastery on valid and reliableassessmentsthatthird-partybodiesoverseeandtherebyskirtthedebatesaboutwhetherlearningatoneinstitutionisequivalenttothatatanother.Thiswouldinturnshiftpartsofhighereducationtoatruecompetency-basedlearningsysteminwhichpaymentisuntetheredfrominputsliketimeandthecredithour,unliketoday’sversionsofcompetency-basedlearninginhighereducation.

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THE STORY OF ELECTRONIC HEALTH RECORDS In 2009 in the throes of the Great Recession, Washington, DC was gripped by the potential of electronic health records (EHRs) to address problems in the quality of healthcare and the cost of administration, as well as empower patients and make healthcare work better. To usher in this supposed golden era in which patients would have control of their portable medical records that they could share instantly with doctors anywhere in the country to coordinate and strengthen their care, policymakers passed the HITECH Act in February 2009, which took a significant chunk of the stimulus funding for the cause.

Insomeways,onecouldarguethatthelegislationwassuccessful.AsBenThompson wrote,“EHRpenetrationinphysicianofficeswentfromjustover40%in2008to86%in2017,andinhospitalsfromaround10%to96%.”

But despite this growth, EHRs haven’t led to a better, more affordablesystem that allows patients to coordinate seamlessly their care acrossa range of providers of their choice without accumulating hassle andadditionalcosts.Alengthypiece in Fortunerevealshow10yearsand$36billionlater,thesystemisan“unholymess.”

Ratherthanagoldeneraof interoperability,EHRshaveremained largelystuckbehindthewalledgardensofindividualhealth-caresystems,unabletocommunicateacrossprovidersnot in thesamenetwork—andusedasaway to strengthen those individual providers’ positions, even asmanyof thedoctors thatuse themdespise them,as theyfind themunwieldy and unworkable.

AstheFortunearticledetails:

What the framersof thatvisiondidn’t countonwere thebusinessincentivesworkingagainstit.Afreeexchangeofinformationmeansthat patients can be treated anywhere.And though theymay notadmit it, many health providers are loath to lose their patients toacompetingdoctor’sofficeorhospital.There’sa termfor that lostrevenue: “leakage.” And keeping a tight hold on patients’ medicalrecordsisonewaytopreventit.

There’satonofproprietaryvalueinthatdata,says[PresidentObama’snational coordinator for health information technology David]Blumenthal,whonowheadstheCommonwealthFund,aphilanthropythatdoeshealthresearch.Askinghospitalstogiveitupis“likeaskingAmazontosharetheirdatawithWalmart,”hesays.

Blumenthal acknowledges that he failed to grasp these perversebusinessdynamicsandforeseewhatachallengegettingthesystemstotalktooneanotherwouldbe.Headdsthatforcinginteroperabilitygoalsearlyon,when90%of thenation’sprovidersstilldidn’thavesystems or data to exchange, seemed unrealistic. “We had anexpression:Theyhadtooperatebeforetheycouldinteroperate,”hesays.

Inessence,providers leverageEHRsasamechanism tocoordinatecarewithintheirsystembutnotoutsideofit.Theyserveasaninnovationthathelps individual providers create lock-in, so that it’s harder for patients toleave.

Rather than a golden era of interoperability, EHRs have remained largely stuck behind

the walled gardens of individual healthcare systems.

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What was so painful about this is that it was all predictable ahead of time.

In January 2009, just one month before the HITECHAct passed, Clayton Christensen, JeromeGrossmanandJasonHwang’sbookThe Innovator’s Prescriptionwaspublished.ItshowedwhytreatingEHRsasaproblemoftechnologyandfundingwasboundtofallshort,asitwouldfosteradoptionbutnotsystemictransformation.Transformingthesystemthroughrobustpersonalhealthrecords(PHRs)wouldrequirerecognizingtheinterdependenceofdifferentbusinessmodelsinthesystem,1 as well astheincentivesandmotivationsofthesystem’sstakeholders.

As they wrote:

LargeproviderorganizationssuchasPartners,Mayo,Intermountain,theVeteransAdministration,MinuteClinic,andKaiserPermanentehavehadmoresuccessinimplementingelectronichealthrecords.Thefrustrationthatadvocatesofpersonalelectronichealthrecordshaveexpressedaboutthewaytheseinstitutionshaveimplementedthetechnology,however,isthattherecordsare not personal—inthattheyarenotportable,interoperable,standard-formatrecordspatientscan takewith themandusewherever theygo.Theseentitieshave implementedelectronichealth record systems that are proprietary.Therecordscanbeaccessedinstantlyfromanypointwithintheirsystems,butgenerallynotfrompointsoutsidethesystem.

Theauthorsthenpointedoutwhythiswasthecase,whichshedslightonpotentialpathsforwardthatwouldbemoreproductiveinhighereducationaswestaredownapandemic-triggeredrecessionandsetofstimuluspackages.Intheirwords:

The reasonwhy the integrated health systems have all implemented proprietary electronicmedical record systems is that theirprocessesof care, compensation, costing,procurementand management are interdependent—in unique and proprietary ways. Rather than forcetheirprocessestoconformtoastandard-formatelectronicmedicalrecordsystem,itismuchmorenaturalandcosteffectiveforthemtodevelopasystemthatconformsitselftotheirownorganization’sestablishedprocesses,nottheotherwayaround.

Inaddition, justasdoctorsareindividualactorswithinalargersystem,soarethesehospitalsystems—they’resubsystemswithinalargersystem.Itissimplynotintheirinteresttoforce-fittheiroperatingprocessesintoastandardformatsoprovidersinothersystemscaneasilycarefortheirpatients.Inotherwords,wecannotexpectentitieswhosescopeisthatofindividualswithinasubsystem,orsubsystemswithinasystem,voluntarilytoinvesttosolvehigher-levelsystemicproblems.Wehavegottenexactlywhatwecouldexpect.

Transforming the healthcare system through robust personal health records would require recognizing the interdependence of different business models, as well as the incentives and motivations of stakeholders.

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WHY CREDIT TRANSFER INTEROPERABILITY IS HARD IN HIGHER EDThis sounds awfully familiar to the challenge with credit transfer that has played out in higher education. Just substitute various college and university names for Mayo, Intermountain, and Kaiser, and you start to see the problem. As the health system continues to experience, the pathway forward is unlikely to be government coercion that flies in the face of colleges’ business model incentives.2 That’s because colleges and universities, which have proprietary architectures, are not motivated—or designed—to conform to each other.

To help see why, consider that traditional colleges and universities arelocked into a system that pays them by the credit hour. When they accept studentswho transfer from other institutions, by not accepting certaincredits that students have paid to other schools—or not allowing themtocount towardamajor—they increase thenumberofcredits forwhichstudentswillhavetopaytheminordertograduate.Acceptingcreditscouldmeanalossofrevenue.

On top of that, institutions, wired to believe that their version ofeducationissuperiororatleastmateriallydifferentfromthatreceivedatother institutions,worry about “lowering their standards” and awardingcredit.Muchofthecomplicationcomesfromthefactthatschoolsstitchtheir majors and requirements together in proprietary—and ultimatelyidiosyncratic—ways.3 Despite evidence that suggests there are a setof roughly 30 foundational courses taught across institutions that havecontent in common toall, faculty in traditional institutions tend toviewtheircoursesasunique,madeupofthecoursematerialstheyselect,withdistinct syllabi, different arguments and philosophies advanced, and thelike. Econ 101 at one institutionmay in fact—not just theory—be quitedifferentfromthesamenumberedcoursetaughtatanotherinstitution.Inaneducationworldthatmeasuresinputslikehoursspentlearningratherthanoutcomes,it’shardtoprovethecaseonewayortheother.

Although states like Floridathathavecreatedcommoncoursenumberingsystemshavereducedadministrativehassleandcreatedclarityforstudentsas theyplan theircourseofstudy, thesesystemsdonotguarantee that

institutionswillcountthesamecoursestowardfulfillinggeneraleducationormajorrequirements.Knowingthatcourseswillcountreliesonarticulationand transfer agreements between institutions. These agreements areoftenonerous to create.Those seeking to strike such agreementsmustovercomefacultysuspicionsaboutthequalityandoverlapof learningatother institutions.Theymustalsooftenshowthat it’s in theireconomicinterests because, for example, their cost of recruiting studentswill godownbyhavinganagreementinplace.

All of that means that, with certain exceptions, these agreements arehammeredoutonaninstitutionbyinstitutionbasis.Creatingsystemwideinteroperability is grueling.

Despite evidence that suggests foundational courses taught across

institutions have content in common to all, faculty in traditional institutions tend to

view their courses as unique.

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CREATING CREDIT INTEROPERABILITYSo what’s the right pathway forward? In The Innovator’s Prescription, the authors relate the importance of allowing information to travel and stack in a bottom-up fashion as opposed to a top-down one. When Toyota, for example, worked to empower their employees to build better cars and streamline their system, rather than create a hierarchical, centralized system that collected and dispensed information, it decided that all information about a product—what to do with it and when—ought to travel with a product as it worked its way both through and between its plants. That meant that the information had to be visible to all who needed to see it, “in a standard, immediately recognizable format.”

Attachingthis typeof informationtostudentsthroughamechanism likeblockchaintechnology,whichrecords information indecentralizeddigitalledgersthatenableswift,transparenttransactions,inordertounderstandwhattheyknowandcandoinawaythatcanportacrossinstitutionswouldrequirealevelofmodularitythatdoesn’texisttoday.Tomovethesystemtothisfooting,atleasttwothingswouldneedtooccur:

1. Third-party organizations must take on the role of certifyinglearning.

2. Thesethird-partycredentialingorganizationswouldneedtobeabletoofferstandardsthatarespecifiable,verifiable,andpredictableinhowtheyinteractwiththedifferententitiestheytouch.

Third-party organizations that certify learningFirst,asetofinstitutions,employers,andregulatorswouldhavetoagreetoshifttheresponsibilityofcertifyinglearningtothird-partyorganizations.Theseorganizationswould,inessence,offerUSB-typestandards—industrystandardsthatestablishspecificationsforlearning.

Themost likelywayforwardisfor industry-valuedcredentialstoemergethatthird-partycredentialingandlicensingorganizationsassessandvalidatewhen students demonstrate mastery and forwhich the Department ofEducationwillpay.Forthistooccur,institutions,businesses,organizations,and the military would need to adopt skills-based standards with aligned

mastery-basedassessmentsaspartoftheirhiringandpromotionandthenstrongly back those standards.

An example of what this might look like can be seen in the financialanalystsector.Tobecomeacharteredfinancialanalyst(CFA),ameaningfulcredentialinthefinancialservicesindustry,studentsmustpassaseriesofthreeCFAexams.TheCFAInstitute,anonprofitassociationofinvestmentprofessionals that measures and certifies the competence and integrityoffinancial analysts, administers theseexams.Today theDepartmentofEducationdoesn’tpaythefeesassociatedwithtakingthisexam,andtheprogramsthatoffersupportforpassing it—offeredbyentities likeWiley,KaplanSchweser,andthePrincetonReview—don’treceivefederalfinancial

The most likely way forward is for industry-valued credentials to emerge that

third-party credentialing and licensing organizations assess and validate when

students demonstrate mastery.

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aid.But thegovernmentcouldbegin fundingentities that, rather thancertifying seattime,offerproofofmasteryofabasketofindustry-valuedcompetenciesandskills.

Asthegovernmentmovesinthisdirection,it’simportantthatitnotseektoreplacethetraditionaltime-basedsystembywhichmostinstitutionsarefinancedandgoverned,butinsteadtargetnewfundsinfutureroundsofstimulusfundingthatexpandtheuseoffederalfinancialaidforin-demandjobsintheeconomy.What’skeyistocreateaparallelsystem,notthreatenthecurrentone.Thecurrentsystemservesmanyinstitutionsandlearnerswellincertainusecases.There’snoneedtochangethatorprovokeafightwithit,particularlywhentherearemanymoreresourcesinvestedinthestatusquothaninthisnewproposedvaluenetwork.

Still,manymanyinstitutionsmayincorrectlyviewthisasamovetoforcethemtogiveuptheirroleasvalidatorsoflearningbydintofthedegreestheyconfer.Giventheywouldresistsuchamove,itwillbecriticalthatemployers,themilitary,andinnovativeinstitutionsandassociationsaggressivelybackthiseffortandframeitnotasareplacementbutasasupplement.Employersinparticularareahugeconsumerofwhathighereducationoffers.Iftheydemandacertainoffering,theycanhaveenormous sway.

Specifiability, verifiability, and predictabilitySecond,forthisshifttooccur,threeconditionswouldneedtobemetforschoolstooperateinamodular world:

1. The third-party credentialers like theCFA Institutemust be able to specify exactlywhatstudents must know and be able to do.

2. Credentialersmustbeabletomeasurethoseskillsandcompetenciessothattheycanverify thatthespecificationshavebeenmet.

3. The interdependencies between the education providers and the credentialers must bepredictable—thatis,whatmustbetaught,howitwillbemeasured,whatconstitutesmastery,howdollarswillflowfromthegovernmenttoprovidersandthecertificationorganizations,andhowcredentialswillbebrokenupintostackablesetsofcompetencieswithassessmentsand the interdepencies between those subsets of skills—must bewell understood ahead oftime.

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These three conditions—specifiability, verifiability, and predictability—arenecessarytoallowstudentstoearncreditsfromavarietyof institutionsthatwillstackseamlesslyintoanindustry-valued,mastery-basedcredentialthatwouldbypassthetraditionalcredittransferprocess.

Having all stakeholders on the same page about what learners mustmaster, how theymust demonstrate thatmastery, and how to navigatethesystem’smovingpartscreates fertilegroundforeducationprovidersto innovate with different learning methods and business models inpursuitofstrongoutcomes.Thiswouldalsohelplearnersmoveseamlesslybetweenprovidersasneededbasedontheirpreferencesandconstraints.The more granularly defined the standards, the greater potential foreducationproviderstospecializeandforlearnerstopiecetogethertheir optimalexperience.

ReturningtotheCFAexample,theCFAInstituteoffersthreeexamsthatindividuals must pass to become a chartered financial analyst. There isreasonable clarity—or specifiability—about which topics and skills are necessary to study for each exam, such that any provider can create acourseof study that prepares learners topass thedifferent exams.TheInstitutecouldincreasepredictabilitybybreakingupthedifferenttopicsoneachexamintoagreaternumberofpredictable,stackablecredentialsanddemandmasteryoneachtopicasopposedtodemonstratingproficiencyacrossthebasketoftopics.

But all things considered, thevalue chain aroundbecoming a charteredfinancialanalystisquitemodular,asaprospectiveCFAcharterholderwhohaspassed theLevel I exam—which theCFA Institute is responsible for

verifying—could switch from one provider to anotherwithoutworryingthat,say,Wileymightrejectthe“credit”thelearnerobtainedafterstudyingwithPrincetonReview.

By shifting who verifies the learning from the provider to an independent assessor, issues of credit transfer vanish. Just as in theToyota example, inessencetheassessmentsattachinformationtothelearneraboutwhattheyalreadyknowandcando,whichwould in turngiveeducationprovidersthe requisite information to know what the learners need to work onnext.Theywouldnotbeinthebusinessofdebatingwhethertheinputsatanotherinstitution—thetimespentlearning,theinstructionalmethods,thecurriculumandsoforth—hadresulted insufficientmasteryforastudenttolearnanewsetofconcepts.Thisattachingofinformationtostudentscould be accomplished by leveraging blockchain technology, which theDepartmentofEducation is alreadyexploring, so thateach studenthadtheirown,secure,portablerecordofthecertificationstheyhadearnedthattheycouldbringwiththemtoeachinstitution.

By shifting who verifies the learning from the provider to an independent assessor,

issues of credit transfer vanish.

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A CALL TO ACTIONTo take the example of the CFA and operationalize it into a new paradigm for government funding of higher education that shifts from a seat-time based system to a learner-centered, skills- and competencies-based one will require significant changes to financial aid systems. It need not replace the current credit hour financing system, but instead offer a parallel path to Title IV federal aid funds.

Toaccomplish this, thegovernmentwillneed to recognize third-partycredentialingand licensingorganizationsasthedefactoaccreditorforprovidersoperatingprogramsaimedatthosecredentials.Itwillneedtocreateamechanismtodeterminewhichbodiesandcredentialstorecognizebasedonsuchcriteriaaswhetherthecredentialsarevaluedby industry,whethertheyemploymasteryassessment practices that could take a variety of forms, from simulations to project portfoliosand traditional tests, andwhether those assessments are valid and reliablewithways to guard againstcheating.

Oncerecognized,thesecredentialingbodiescouldreceivefeesforeachskillassessmenttheyoffer.As forproviders, theywouldno longerhave tobepaidbased justontime spent learning.Theycouldinsteadbepaid,atleastinpart,asstudentsdemonstratemasteryasverifiedbythethird-partycredentialingbodies.

In K12 education,NewHampshire’sVirtual LearningAcademyCharter School (VLACS) providesacompellingexampleofhowthiscouldwork.Inessence,VLACSispaidasstudentsdemonstratemasteryofcompetencies.Whenastudentdemonstratesmasteryof10%ofacourse, it receives10%ofitsallocatedfunding,whichisheldinescrow.Whenastudentmastersthenext10%,theschoolreceivesthenext10%offunds.

The government will need to recognize third-party credentialing and licensing organizations as the de facto accreditor for providers operating programs aimed at those credentials.

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The table below summarizes the basic formula through which VLACSreceivesstatedollarsfora“half-creditcourse”andillustrateshowitmakesthetimeeach student spends learningvariable.The state fundsVLACSonthebasisof thepercentageofmaterialeachstudentmastered.Notethateachstudentmasteredthecompetenciesineachcourseatadifferentrate.Thelaststudentportrayedinthetabledecidedtowithdrawfromthecourseaftercompleting30percentofthecompetencies,whichmeantthatVLACSwouldreceive30percentofthefundingforthehalf-creditcourse.

Inthecaseofhighereducation,providerscouldstillsettheirownprices,andstudentscouldusefederalfinancialaiddollars—amixofPellgrantsandloans—tochoosewheretheyenrolled.Butfullpaymentwouldbewithhelduntilastudentdemonstratedmasteryontheexternalassessment.

To usher in a new era of constructive innovation in higher education,studentswould ideallynotonlyneeda transparentview intowhat skillstheymustmastertoearnacertificate,buttheywouldalsobeabletotakethe dollars to awide array of providers that they determine could help

them.Programscouldproduceauditedqualityassurancereportsbasedonstandards around learning outcomes as denoted by passing rates; percent completingandtimetocompletion;placementandreturnoninvestment;andretrospectivestudentsatisfaction,amongotherdatatohelpstudentsmake sound decisions about where to enroll.

To facilitate having a diverse array of innovative providers from whichstudentscouldchoose,thethird-partycertificationorganizationsmustnotact akin to traditional licensing bodies.That is, theymust not prescribetheinputsthatlearnersmustpossesstogainacredential,butmustfocusonly on mastery. Today in legal education, for example, most state barlicensingauthoritiesrequireapplicantsforthebarexaminationtohaveaJDdegreebestowedbyanABA-accredited lawschooluponcompletionofthreeyearsoflegaleducation.Healthcarecredentialingbodiesspecifysimilar requirements.Thesesortsof requirementsshouldbeabandoned.Whenwehaveclarityaboutoutcomesandhowweknowwithcertaintythatstudentshaveachievedmasteryonvalidandreliableassessmentsthatarenotreductive,thenwecreateopportunitiesforendlessinnovationindeliverybecausedeliverydoesn’thavetobedebated,onlyproved.

Student

John

Sally

Nick

Jane

% Competency completed

100%

100%

100%

30%

90

120

75

90

DaysState funding (Comp. % x 454)

$454

$454

$454

$136

Students not only need a transparent view into what skills they must master to earn a

certificate, but must also be able to take the dollars to a wide array of providers.

Table 1. VLACS funding calculation for a half-credit course

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CONCLUSIONWe are living through an uncertain and deeply unsettling time. The federal government should not simply support traditional higher education institutions and preserve the status quo during this crisis. It should go beyond by working to establish a more learner-centered future.

Creating interoperability inhighereducation,suchthatstudentscanmoveseamlesslythroughavarietyofhighereducation experiences without accumulating wastefulcreditsandspendingprecioustimeandmoneyiswithinour reach. But it requires learning the right lessonsfromthelasttimethefederalgovernmentattemptedtoleverageamassivestimulustotransformakeysectorofsociety in healthcare.

Theopportunitybeforeusistousethishorrifichealthcrisistosupportlearnersinaccumulatingtheknowledgeand skills required tomakeprogress in their lives.Thegateway to this future is through the creation of aparallelsystemofhighereducationthattranscendsthetraditionalcredit-hourmeasure.Asystemthatpaysforthird-party credentialing or licensing organizations tovalidatestudents’ industry-valuedskillscouldallowtheseamless transfer of verified, mastery-based “credits”between institutions, payment for outcomes, and theshiftfrommeasuringtimetocompetencies.

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1. Whenever there is a stage in an industry’s value chain whose architecture must beinterdependent--meaning its subcomponent parts are dependent on each other—in order to bemadegoodenough,itcannotconformtoanythingelse.Thatis,theproducts,services,andprocessesnexttoitonthevaluechainmustbeconformableandmodular.

For example, in personal computers in the 1990s and 2000s, Intel’smicroprocessor had aproprietary, interdependent architecture because it was what determined how well thecomputerwouldperform.Thecomputer,therefore,inwhichitwasusedhadtohaveamodulararchitecture—thatis,theengineershadtodesignthecomputertoconformtothearchitecturethattheprocessorrequired.WhenBlackberryemerged, incontrast,engineerswereworkingtooptimizetheperformanceofthedevicesothatitwouldbegoodenoughforthemarket.Thatmeant ithadtohaveaproprietaryand interdependentdesign.Asaresult, thatmeantthe processor insidewasmodular--it had to conform to Blackberry’s needs, not the other way around.

Whenpeople try toforcetwoproprietary, interdependentproductsagainsteachother inavaluechain,theresultisvastexpenseandpainbecauseneithersidewantstoaccommodatethe other.

2. As Rick Hess has writtenrepeatedly,althoughit’seasyforfederalrulestotellpeopletodosomething,therulescannotcompelpeopletodoitwell.

3. For a clear example of how majors are constructed and negotiated at universities, werecommend readingChapter 18 ofThe InnovativeUniversity, specifically the sectiontitled“TheCreepingMajor.”

NOTES

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About the authorsMichael B. Horn is the co-founder of the Clayton ChristensenInstitute for Disruptive Innovationwhere he is a DistinguishedFellow. He also serves as chief strategy officer at EntangledVentures and a principal consultant for Entangled Solutions,whichoffersinnovationservicestohigheredinstitutions.Hehasauthoredmultiplebooksandarticlesoneducation,andservesasboardmemberandadvisortomanyeducationenterprises.

About the InstituteThe Clayton Christensen Institute for Disruptive Innovation is a nonprofit, nonpartisanthink tank dedicated to improving theworld throughDisruptive Innovation. Foundedonthe theories of Harvard professor ClaytonM. Christensen, the Institute offers a uniqueframework for understanding many of society’s most pressing problems. Its mission isambitiousbutclear:worktoshapeandelevatetheconversationsurroundingtheseissuesthrough rigorous research and public outreach.

Richard Price is a research fellow at the Christensen Institutewherehefocusesprimarilyonresearchinghownewandinnovativemodelscanreshapehighereducation.Richard’sworkdelvesintosome of the most pressing topics in higher education today,includingpolicyinitiatives,alternativefinancingmechanisms,andinnovativebusinessmodels.

C H R I S T E N S E N I N S T I T U T E : C R E AT I N G S E A M L E S S C R E D I T T R A N S F E R S 1 5