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You Get What You Pay For

December 03, 2015

In an earlier post, I admitted the embarrassment of having been an economics major who had never heard of the word "monosopy". While we all have an understanding of monopolies, a monosopy is slightly different. A monosopist is a person or organization that dominates a market by keeping prices unrealistically LOW, thereby discouraging potential competitors from entering the market. Whether monopoly or monosopy, the results are usually the same: No competition translates into lousy service and a lack of innovation. The market, consumers and businesses suffer with no available alternatives…nowhere to go. Life is not so good.

Anyone paying attention to registrar listservs over the past year has noticed the tsunami of chatter about delays, errors and audit exceptions resulting from reporting problems at the National Student Clearinghouse. Recently, there have been increasing exchanges amongst registrars about exploring the possibilities of reporting to NSLDS directly instead of through the Clearinghouse. Probably an ugly proposition but certainly no worse than the current situation. But what's a registrar to do? You have got a job to do and auditors to satisfy and students to serve. Likely better to take your ball and bat and go home so to speak. It didn't used to be this way. So, how did we get here? Let's review a little history.

In 1998, a pesky little start-up in the Chicago area introduced a brand new service designed for employers to verify degrees and dates of attendance online. Credentials Inc. was an outlier with an idea that had some merit. We slogged around trying to build a business for a few years, with the slow growth testing our patience and pocket book. Then in 2000, we were joined in the marketplace by none other than The National Student LOAN Clearinghouse. Ironically, their entrance helped the upstart Credentials by legitimizing the practice of outsourcing degree verifications, but in time NSLC took advantage of all their pre-existing loan reporting relationships and proceeded to dominate the market despite an inferior product design. Suddenly, NSLC morphed into the National Student ____ Clearinghouse. In 2008, with intelligence being the better part of valor, Credentials threw in the towel and sold its verification business to NSC thus creating the MONOPOLY that goes by the name DegreeVerify. And the money floodgates opened at NSC, making all kinds of things "free" long as they can verify your degrees for you. Reporting to NSLDS, Student Tracker (another questionable service discussed earlier), Student Self-Service and Transcript Ordering are all FREE. Why? Because degree verifications generate about $25 million per year for NSC. With all that kind of money rolling in, the management of NSC has moved into "Research" and taken to galloping around the world under the banner of "Gronigen Declaration" while back home the house is on fire. Nevertheless, by offering all these goodies "free" of charge, NSC has created the MONOSOPY that prevents any competition from entering the market. Who wants to start a business where there is no revenue to pay for things? Not me. I can tell you that!

If you ask me (and you didn't), the moment the National Student Loan Clearinghouse dropped the word Loan from their name, they lost their identity...their reason for being in the first place. It kind  of all went out the window. Not that we all have to stay the same forever. We can grow and change. But as long as these offerings remain their "core services" (their term, not mine), then they ought to get it right! They ought to fulfill their original reason for being. Time to put out the fire.

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