The college of ag at OK State does a magnificent job of teaching and advising. Many students obtain agribusiness degrees instead of business degrees simply because ag econ professors are better teachers and more caring advisors. They come here for "the personal touch."
I have been told that enrollment in our ag college increased this year, but because enrollment fell for the university as a whole, our college had to suffer a cut in funds.
The University of Cincinnati is drafting a plan where programs would receive more money for greater enrollment and receive cuts for falling enrollment. Programs who find ways to cut costs even get to keep a portion of those savings. Read more here.
Some are obviously concerned about what a market-based approach to higher education would produce. Colleges and departments could easily boost enrollment by offerring more classes, which may not raise costs much if you hire cheap adjuncts to teach them. And of course, the best way to attract students is to make your classes really easy. At OK State, many students walk across the street to Northern Oklahoma College where classes are easier and the teacher gets paid only $1,800 a course. If you only paid me $1,800 per course, I would give each student A's on the first day and tell them, "it was nice meeting you, take the rest of the semester off."
Remember, though, there is much more to a market than the revenue and cost stream for any one year. There is always a reputation effect. Engineering students are smarter than agribusiness students. Agribusiness students are smarter than some other majors. Students at Stanford are smarter than OK State students. Dumb down a program and you lose your reputation.
Yet, reputation only works to ensure quality control if the school is able to profit from the reputation. If a school decides to maintain higher standards, and suffer some enrollment as a result, wouldn't it have to charge their students more to capture the value of the higher standards?
I'm not sure the market for college graduates works that efficiently. But never underestimate the ability of a market to see what arrogant professors like me cannot see!
