American universities and colleges provide (allegedly) two distinct services that have always been bundled together: they educate, and they certify (via the degree) that the education has actually been accomplished. The convention has always been that if you want that certification (the degree), then you must attend class (the education) – even if you've already obtained that education through some other means (for instance, by education yourself).
The University of Wisconsin is about to change that. They're going to provide the certification (that degree) to anyone who can pass their tests for it. In other words, they are going to unbundle the certification and the education.
This has the potential both for good and bad, like most things. One possible good outcome: the emergence of specialized degrees, especially those aimed at certifying an individual's readiness for gainful employment. This will be enabled by the relatively low cost of a certification program as compared to an entire curriculum. Employment-focused degrees would be worth a lot to American industry if they're well done. One possible bad outcome: the emergence of schlock degrees, wherein the only real requirement is forking over some money. Just as for the schlock schools and correspondence courses that exist today, the education industry will have to develop defenses against these. Probably the main defense will be the same one as today: the reputation of the issuing school.
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