It's not really the same when the school gets the money either way and it's not clear how the placement rates really translate to good outcomes (it puts the rationality burden on the students which is the wrong place for it and less likely to work for the reasons you describe). Schools are incentivized to not have students fail out and to select hard for students already likely to succeed during admissions, but that doesn't mean the students currently learn much from the school or that the schools should even make education their focus (as opposed to increasing their prestige via research or facilities to attract more students).
If student failure to succeed in the market led to university failure we'd see a lot different behavior from universities.
I don't think the universities are currently selling education, they're selling prestige and network access via credentials with some education on the side at inflated rates from easy access to government non-defaultable loans.
This leads to weird behavior like all majors being the same cost and the same length along with lots of people employed by the university that don't know anything (career services where I went to school was a good example of this). There's also a lot of spending on facilities to lure students that is unrelated to education or success afterwards (since they have to compete with other universities for all of the free government loan money).
If this free money was not available there would be a check on people getting loans for majors that are not economically viable. If school's offered ISAs then the school's would provide the check. As it is currently, the student carries the burden of evaluating all of this - it's not a surprise a lot of people fail this at 16.
This incentive alignment issue is why people come out of universities and get destroyed by technical interviews, why a large amount of CS majors can't solve fizzbuzz and why people pay a lot for ultimately worthless degrees. I don't disagree with the cultural problems you describe, but I think if there's an ISA option vs. 100k in debt option more people will take the ISA option if the education actually works (and it will have to for ISA providers to survive).
There's a way to fix the systemic incentive issues and place the burden of evaluating economic viability on systems better able to handle it. This would fix a lot of the problems, but it's hard to change from within the system with the current broken incentive structure. That's why I'm excited about the Lambda School approach - I don't think universities can dig themselves out of this and I don't think the necessary changes to government loans is politically viable.
This is also why I think 'free college' is bad policy, it further prevents Lambda School like ISA approaches and cements in the current broken incentive structure.
I think it's more of a problem that the economy simply doesn't need as many people with college degrees as are produced. Even if companies need to filter candidates for competence, they'd still have to do that, and we'd still be stuck with a glut of people with credentials that will go unused due to over supply. I don't have an answer to that. (except that apart from the massive debt problem, I still think it's a net positive in society to have slightly better educated people even in low-skill jobs.)
As for free college, countries that have it don't just make it free for anyone: there is a significant filtering process that entails tracking students who don't perform academically into paths more suited to specific trades instead of college. If there's a solution to the above problem, it need to include something like that as well.
College degrees generally? Sure, I agree - the market doesn't need a lot of them.
I think there's a lot of market demand for certain capabilities though - specifically capable software developers.
Maybe there's an argument that there's not enough intellectual capacity to meet this demand, but I think it's more an issue of opportunity (Lambda's student success seems to be evidence of this). I guess I'm not convinced there's oversupply generally as much as there is an oversupply of certain non-economically viable majors (because of this incentive problem).
For the free college, even with those restrictions (which are good), I'd argue it doesn't relieve the incentive alignment problem with the colleges themselves (so it harms potential ISA competitors without solving the underlying problem).
If student failure to succeed in the market led to university failure we'd see a lot different behavior from universities.
I don't think the universities are currently selling education, they're selling prestige and network access via credentials with some education on the side at inflated rates from easy access to government non-defaultable loans.
This leads to weird behavior like all majors being the same cost and the same length along with lots of people employed by the university that don't know anything (career services where I went to school was a good example of this). There's also a lot of spending on facilities to lure students that is unrelated to education or success afterwards (since they have to compete with other universities for all of the free government loan money).
If this free money was not available there would be a check on people getting loans for majors that are not economically viable. If school's offered ISAs then the school's would provide the check. As it is currently, the student carries the burden of evaluating all of this - it's not a surprise a lot of people fail this at 16.
This incentive alignment issue is why people come out of universities and get destroyed by technical interviews, why a large amount of CS majors can't solve fizzbuzz and why people pay a lot for ultimately worthless degrees. I don't disagree with the cultural problems you describe, but I think if there's an ISA option vs. 100k in debt option more people will take the ISA option if the education actually works (and it will have to for ISA providers to survive).
There's a way to fix the systemic incentive issues and place the burden of evaluating economic viability on systems better able to handle it. This would fix a lot of the problems, but it's hard to change from within the system with the current broken incentive structure. That's why I'm excited about the Lambda School approach - I don't think universities can dig themselves out of this and I don't think the necessary changes to government loans is politically viable.
This is also why I think 'free college' is bad policy, it further prevents Lambda School like ISA approaches and cements in the current broken incentive structure.