When President Obama arrived at the Pathways in Technology Early College High School in Brooklyn on Friday afternoon, he pushed Congress for more investment in education to spur job growth. That could help. But if we really want to stimulate the economy, we should create an education and employment system that rewards skill, not the school you Ivy Leaguers legacied into.

There is a huge higher education economy that facilitates the use of university names as shorthand for quality. It's tiered: the Ivies are the most ostentatious form of that hierarchy, but people make assumptions about other schools, too. Asked to rank three schools — Georgetown, Ohio State, and De Anza Community College — most Americans would rank them in the same order, absent any other knowledge. The name on your college degree after graduation becomes, for a few years at least, the shorthand for your ability. Eventually, your work experience is more significant, but not entirely. Do you know where people you work with went to school? If some went to Ivy League schools or schools with good sports teams — probably.

Employers use the same shorthand. They get résumés, check out degrees and college names, start making piles. If you went to De Anza (a small college in northern California with a lovely campus), you probably won't go in the same pile as the person from Yale (an East Coast school somewhere).

Our proposal suggests breaking the bond between college and job. It creates a system that will allow employers to know that a person has received an education — even the most pertinent education — but otherwise forces them to use more specific tests to evaluate a job applicant's quality. It would simultaneously make colleges more competitive, by removing the ingrained incentive offered by Ivy League schools.

Here's how it will work, once passed into law by our Congress (who heavily went to Ivies) and signed by our president (who did, too).

A public or public-private body will be created that will act as a clearinghouse for verification of job applicants' education experience. Colleges, universities, and trade schools will submit records of degree completion and grades achieved to the clearinghouse. Employers can then query the verification agency to validate that an applicant has received the education they claim.

An example. Joe attends New York University and gets a degree in History. Each year as he progresses, his grades and any degrees are submitted to the verification body — say, for the sake of argument, an expanded College Board. When Joe graduates, or when he seeks employment at any other point, he tells his employer that he went to college and graduated (or didn't). The employer contacts the College Board, verifies Joe's claims, and then moves him on to the next stage of the process if desired.

Notice that Joe doesn't say what his degree is in. The information that colleges submit to the agency wouldn't include the degree received or the areas of study — except for specialized fields. The number of types of educational institutions will drop to two: specialized or not. Non-specialized institutions can teach what they want, create degree paths in whatever fields they choose. But when reported to the College Board, the only information provided will be that the person graduated. Institutions offering specialized degrees will need another level of accreditation, but one that's acquired, can report specialized education to the College Board. What counts as a specialized field will need to be determined independently, but will include things like law and medical degrees and highly specialized engineering or technical skills. If an employer needs to hire a heart surgeon, it can verify with the agency that this person received such a degree — but not the institution from which the degree was obtained.

Enforcement, particularly at the outset, will be tricky. Asking a person's place of education during the hiring process will become a question that is illegal to ask, akin to asking a job applicant's age. But once in place, imagine the benefits!

  • Employers will need to test for skills specific to the positions for which they're hiring, not simply use degree types and college names as shorthand.
  • Colleges and universities will compete based on their ability to provide the sorts of skills that job applicants need. If Murray State turns out to be a better school for training people in advertising, more students will go to Murray State. More professors will go to Murray State to teach.
  • By increasing competition among colleges, more lower-cost schools will be seen as destinations for students. More higher-cost schools will look to reduce their tuitions. Over time, competition will mean a constant recalculation of tuition prices, that will likely serve to help bring costs down.
  • Those who choose schools closer to their homes for financial or personal reasons will not necessarily be penalized for doing so.
  • Those who seek educations later in life or — more importantly — who gain additional skills outside of college won't be penalized by having a certain or the wrong type of degree.

Then there's the other big benefit: Legacy will become much less important. The social structures and class status that helps people from certain families or income brackets going to "better" schools will evaporate. Smart rich kids will want to go to Sam Houston State, not Harvard.

There will be loopholes, of course. People will talk; friends of friends will happen to mention that So-and-so went to Princeton. But perhaps, with this system, "Princeton" won't necessarily be associated with the top-tier. Or, even if it is, a student from a little school in rural North Carolina may still do better at the employer's filtering tests. They could now, of course, but they may not be given the chance.

Obama's call for smarter investment in education is important. But over the long term, a better idea may be to make education less about institutions. Increase competition among schools, increase competition among employers, and build a reward into educating and training yourself. Paying six figures for a degree with a particular word on it is stupid. Education can be smarter.