Akin to a Barry/Ian proposal in the book, could universities not offer a premium rate performance bond deal to students under which poor class outcomes are compensated as a way of making a reality of their promises on employability? For example, I could offer my (wholly fictitious) class a deal like this:

'If the average salary of students in the current BA Hons(Basket Weaving) course two years after graduation is ten per cent less than the average for the UK, we will refund 5% of your course fee'.

Making an offer to refund the fee on that basis gives an incentive to do better in class - after all, who wants only the 5% refund of fee if they can shine and get a job paying 10% more and get the 5% courtesy of less well placed students? If all students acted this way, there might be no need for refunded fees any way and student performance could be improved. (The moral hazard issue here is, I'm sure, a bit trickier to handle than I've suggested, but this is my first outing for this idea!)

The weakness of the approach is that it assumes rational students, good information on national salary levels across all fields (basket weaving students may not just enter basket weaving) and - most important of all - that luck isn't a big factor in job placements by 2 years from graduation. It assumes that salaries for year 1 after graduation are correlated with those at year 2 (i.e. no abnormal salary hikes or salary drops, or that they are at least normally distributed) and that there is a correlation between college performance and salary generally.

There is lots to refine here (for instance in my offer to the class above is it 'average salary of students' or 'top quartile'; is it '10% less than the average for the UK' or '10% less than the average for basket weavers in the UK', or '10% less than the average for basket weaving course graduates in the UK'?).

Then again I may just be plain wrong.

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