The University Is a Credentialing Machine

The Quiet Transformation

Something happened to higher education over the past fifty years. Not a sudden collapse or dramatic reform, just a slow, grinding transformation that most people haven't fully processed yet. Universities stopped being primarily about knowledge and became primarily about credentials.

This isn't cynicism. It's observation.

Consider the strange economics of it all. Students pay extraordinary sums, often taking on debt that will shape their financial lives for decades, to sit in lecture halls where professors read from textbooks that students could buy for fifty dollars. The same information exists in libraries, online courses, YouTube lectures, and countless free resources. Yet the degree commands the premium. Why?

Because employers don't care what you learned. They care that you finished.

The Signaling Model

The economic theory here is called "signaling." A degree doesn't prove you know things; it proves you're the kind of person who can get a degree. You showed up. You jumped through hoops. You tolerated bureaucracy and completed arbitrary requirements. You demonstrated conscientiousness, compliance, and the ability to delay gratification for four years.

That's valuable information for employers. Much more valuable, in many cases, than whether you can recite the causes of the French Revolution or solve differential equations.

And here's the uncomfortable part: everyone involved sort of knows this. Students know it; they joke about forgetting everything after the final exam. Professors know it; they watch the same students who slept through lectures walk across the stage with honors. Employers know it; they rarely ask about coursework in interviews. But the system persists because it serves everyone's immediate interests.

Students need the credential to compete. Professors need students to have jobs. Employers need some filter that won't get them sued. The degree provides plausible deniability all around.

The Content Problem

None of this means education is worthless. Learning matters. Understanding matters. But these things have become decoupled from the institutional apparatus that supposedly delivers them.

The best students learn despite their education, not because of it. They read beyond the syllabus, pursue questions that interest them, and use the university as a resource rather than a conveyor belt. The worst students treat it purely as an obstacle course, minimum viable effort toward maximum credential value.

Most fall somewhere in between, absorbing some knowledge while primarily focused on grade optimization. And who can blame them? The incentives are perfectly clear. A B+ in a class you learned nothing from beats an A- in a class that transformed your thinking, if the first is weighted higher and the second is an elective.

The system selects for grade-grubbing. So grade-grubbers flourish.

The Inflation Spiral

Credential inflation follows inevitably. When everyone has a bachelor's degree, employers start requiring master's degrees. When master's degrees become common, they want PhDs, or (increasingly) they just want relevant experience, which brings us full circle to asking why the degrees were necessary in the first place.

This is a collective action problem. No individual student can opt out. If the job requires a degree, you need the degree. It doesn't matter that the degree proves nothing about your ability to do the job. It doesn't matter that you could learn everything relevant in six months on the job. The filter exists, and you must pass through it.

So students keep enrolling. Tuition keeps rising. Debt keeps accumulating. And the actual educational content becomes increasingly irrelevant to the transaction.

The Real Curriculum

What universities actually teach, the hidden curriculum, is how to navigate large bureaucratic institutions. How to decipher unclear requirements. How to manage competing deadlines. How to perform competence to authority figures who hold power over your future. How to network with peers who might be useful later.

These are genuinely useful skills. They transfer well to corporate environments, government agencies, and any large organization. But they're not what anyone advertises on the brochure.

The official curriculum (the courses, the readings, the intellectual development) is largely theater. Beautiful theater, sometimes. Transformative for some students. But theater nonetheless, layered over the real function of sorting and certifying.

Who Benefits

This system serves some people quite well. Elite institutions benefit enormously; their scarcity creates value, and that value compounds through alumni networks and employer preferences. Students from wealthy families benefit; they can afford the credential without the debt burden, and they enter with cultural capital that helps them extract maximum value from the experience.

Faculty benefit (mostly); they have jobs that provide stability and status, even if the grading and administrative work feels disconnected from intellectual inquiry.

The losers are obvious: students from modest backgrounds who take on crushing debt for credentials that don't reliably deliver economic returns. First-generation students who don't know how to extract the hidden benefits. Anyone who makes the mistake of thinking the official purpose is the real purpose.

The Alternative That Isn't

Some people suggest alternatives. Bootcamps. Apprenticeships. Portfolio-based hiring. Competency testing. These exist at the margins and sometimes work well. But they can't scale to replace the current system because they don't solve the coordination problem.

Employers need filters. Students need credentials that employers recognize. Neither can move first without the other. So the equilibrium persists, not because it's optimal, but because it's stable.

The university isn't going to reform itself. It has no incentive to. Every stakeholder within the system benefits from the current arrangement, even as the system produces collectively suboptimal outcomes.

What Now

Understanding doesn't change anything directly. But it might change how you engage with the system.

If you're a student: treat the credential as the transaction it is. Get it efficiently. But don't confuse credentialing with education; pursue actual learning separately, on your own terms, with resources you choose. The library is still free.

If you're an employer: consider what you're actually filtering for. The degree requirement might be doing less work than you think, and it's definitely excluding people who could do the job well.

If you're a professor: this is probably dispiriting. But the students who come to your office hours, who read beyond the syllabus, who treat education as more than an obstacle course, they still exist. They're why the job can still be worth doing.

The university is a credentialing machine. It performs other functions too, some of them genuinely valuable. But its primary social role in the current economy is sorting and certifying: stamping people as employable, filtering the labor pool, converting time and money into legible signals.

That's not entirely bad. Coordination problems need solutions. But let's stop pretending it's something else.