Time for a College Warranty?

My younger daughter, then an entering college senior, once discovered that a mandatory Spanish class was no longer being offered in a time slot that did not clash with key classes for her major. Her advisor had erred in mapping out her courses. The college’s solution? Pay several hundred dollars to take the class in the summer.

Now in most industries suppliers fix errors at their own expense. Rarely in higher education. My protests about having to pay for an error in advising were met with almost Soviet-era indifference. But traditional colleges and universities need to learn the basics of how to run a business because new competitors with different business models and attitudes to service are about to eat their lunch.

Demands for some form of “limited warranty” will increase from students and parents who resist incurring huge debt without the assurance of a credential in a reasonable time.

Colleges should take a look at the health care industry. There’s a growing trend among major payers – particularly large employers, insurers, and government health programs – to insist on “pay for performance” from physicians and hospitals. Until recently, for instance, hospitals could discharge patients after getting paid for treatment, and if it turned out they were not cured the hospital would just readmit the patient and send a second bill for new tests and treatment. But now hospitals with high re-admission rates are getting slammed with penalties by Medicare – leading to steps to get the treatment right the first time.

Like hospitals before them, colleges complain that the value of their services is so hard to measure, and success so dependent on the customer, that it would be unfair to subject them to the equivalent of a money-back warrantee. But just like hospitals, they will soon discover that at least parts of their service can and should be subjected to pay for performance.

Take my daughter’s Spanish class. It is pretty basic to guarantee that advisors will be trained to know what they are doing and that the necessary classes will be available to graduate on time. If a schedule problem develops, then provide free summer school or pay for the student to enroll in the class in another institution – even airlines have to rebook you with another carrier when a problem is their fault. It is pretty basic, too, for a college to be expected as a condition of tuition payments to monitor their students to pick up potential problems, ranging from challenges in adjustment to college to math weaknesses that require extra help – just like hospitals now have to monitor their Medicare patients even after discharge or face penalties. It is true, or course, that it would be unfair to penalize a college for a student who prefers to party every night rather than hit the books. But it is just as unfair for colleges to expect payment for substandard basic customer service.

Posted by: Stuart Butler

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