Differential Tuition

One overlooked aspect of the higher education bubble is the de facto subsidy paid by liberal arts and social sciences majors to business and engineering majors.  Undergraduate tuition rates at most universities are the same for every major even though the perceived value of those majors, and some would say actual value, are not nearly the same.  Therefore a political science major pays the same amount of tuition as a business major even though the latter has much higher earning potential upon graduation and, presumably, a higher intrinsic value to the student.  In addition, faculty salaries tend to be much higher in those disciplines where there is a relative shortage of workers (professors) with both practical experience and academic credentials, making these programs more expensive to operate.

Universities should consider a tuition pricing plan where students pay according to the "value" of their degrees: differential tuition.  Such a scheme is already in effect in some institutions, but the concept could be much more widely adopted.  This would allow liberal arts programs to offer students (and parents) a discount on their tuition, attracting more majors and incentivizing departments to improve the value of their degrees in order to justify price increases.  It would also allow for liberal arts departments to enhance their value relative to other liberal arts departments.  An English department, for instance, could make the case that their graduates fare better in graduate school placements and post-graduation hiring rates than, say, history majors.  Tuition would be higher to reflect this higher value.  Most importantly, such a plan would push faculties to track students after graduation and incorporate this information into design of the major and individual courses.  Relevant factors to consider in setting tuition rates could include job placement rates, first-year salaries, student demand, department costs, graduate school acceptance rates, measures of department prestige, etc.  Incidentally, these measures are also relevant for administrators to use in assessing department productivity.
 
One possible objection would be that differential tuition stigmatizes students in the "cheaper" programs, implying that they are not worth as much as engineering or accounting majors.  However, the stigma is already there, only students are now forced to pay the same rate for products of widely different economic value.  And to the extent that awareness of value is brought home to individual faculty members, they are in a position to improve their programs to better accommodate a changing environment.

Another objection is that such a scheme turns higher education into a commodity.  It is true that factors other than financial should be included in decisions students make about their fields of study.  But, with so much money now flowing into higher education and so many students graduating with huge debt to pay for their degrees, more of this kind of thinking would not be misplaced.