If the government pays universities for graduating students, how does that not lead to "predatory universities"?

Question

From an answer to another question:

Unsurprisingly, both of these "jobs" cost money. Education needs teachers, research needs researchers, and both need administrative support staff. Buildings and other infrastructure need to be maintained, and many other small and large costs accrue. Sadly, neither of these "jobs" actually generates substantial money directly - in Sweden education is free (students pay no tuition, even at our private university), and with the exception of the rare patent- or spinoff-generating research, even world-class publications do not pay salaries or utility bills. At Chalmers, just like at most universities (at least in Europe), all our core functions are substantial loss leaders.

Hence, Chalmers needs income streams. The government pays us for graduating students, which is sufficient (more or less) to cover the "education job" at least on bachelor and master level.

This sounds suspiciously like the conflict-of-interest that is regularly levelled at open access publishing - publish more papers (even if they're terrible), get more revenue; graduate more students (even if they're terrible), get more revenue.

How does the government prevent this conflict of interest from turning universities into "predatory universities"?

I'm tagging this question with sweden, although it should also apply to other countries that pay universities for graduating students (are there such other countries?).

Answer 1

In Sweden the quality of higher education and research is evaluated by a government agency called Universitetskanslersämbetet (UKÄ), or "Swedish Higher Education Authority". Reports with results for various institutions can be found here (only in Swedish, as far as I'm aware). If a program or institution fails to uphold quality standards they may lose accreditation for the specific field or even degree. Note that this is true both for public and "private" institutions.

It's also worth noting that Riksdagen (the parliament) sets a ceiling or upper limit to how much money a given institution can receive for, e.g., graduating students and "full year achievements". Basically, a university that admits too many students is on the hook financially. This naturally limits the potential revenue, and negotiations to raise this ceiling probably take into account factors like demand and quality. For places like Chalmers with typically more applicants than spots, education quality and employability have long been selling factors that they are incentivized to keep in place. But you can also find institutions that have a reputation for having (some) watered-down programs. This is the case in most countries, I suppose.

Answer 2

In addition to Daniel Hatton's answer, in the UK we also have the concept of External Examiners. At the end of each semester a leading academic in the same field from a comparable university will come to the university. They will look at our syllabi, check the exam papers, read a selection of the exam answers, read some dissertations, talk to students, examine our administrative processes. Only with their signature can the marks be made official and degrees be awarded. As they are from one of our "competitors", it is in their interests to be rigours, but not unfair (because someone will be external examining their degrees).

In addition, there is idea of accreditation, as outlined in the comments. Universities must be accredited by the government to receive funding for giving degrees. The difference from OASPA, SCI, COPE etc is that you are still allowed to publish in a journal even if it doesn't belong to one of those organisations. In the UK you are not allowed to give a degree unless you are accredited by OfS. There are additional, voluntary accreditations in some subjects that might reassure students that that course is particularly high quality (generally things like Engineering, accounting, journalism, medicine etc).

However, the final thing to realise that teaching undergraduates isn't that profitable either. Generally the only activity that brings in income substantially above what it costs is educating overseas students. And here there very much are accusations that standards have been lowered to make more money.

Its not clear to me however, how the government paying universities to graduate students is any more open to corruption than the students themselves paying.

Answer 3

Here in England (?and Wales), there's a government agency called the Office for Students which can withdraw a university's power to award degrees if it's dissatisfied with that university in any of various ways, one of those ways being the rigour of the university's degree programmes. (In its current incarnation, I believe the OfS can do this even if the university's degree-awarding powers were granted in the first place by primary legislation.)

Answer 4

My perspective is the US, but the ideas are, I think, pretty common. Note that such things as "paying for graduates" doesn't happen in a vacuum. I can't start up a university, claim to graduate thousands (thousands, I say) and send a bill to some government.

There are several guardrails, both regulatory a repetitional. Universities who get public funding are also subject to public regulation at various levels. In the US it is mostly (not all) from the state level.

More broadly, however, reputable universities strive to have qualified faculty with advanced degrees. The reputations are public. When bad things happen, they are likely to be revealed since people are allowed to speak up and complain both inside and outside the institution.

In short, there is pressure to "do the right thing" at all levels of institutions that must operate in the public sphere.

In the US, some private, usually for-profit, institutions are less bound, but they aren't likely to directly feast on the public dole. Student loans are a problem, however, as they are too loosely regulated and the system is open to abuse. These institutions can (and sometimes are) predatory.

In general, though, the reputations of too many people depend on the reputation of the university they work at or attend. That, in itself, generates the pressure to do the right thing, though perhaps not the "perfect" thing.