This post is part of a series in which LinkedIn Influencers pick one big idea that will shape 2014. See all the ideas here.

If you examine job ads these days you’ll probably notice one common trait among them: they all ask for a college degree. That piece of paper—whether it’s an associate’s, bachelor’s, or master’s degree—remains the prime signal to an employer that the applicant is at least minimally qualified to fill the position.

But what does a college degree really tell employers about how much an applicant knows, about how much they learned to earn that credential?

When employers see a job candidate with a bachelor’s degree, for example, they are assured of only one thing: that the person had the self-discipline to complete 120 credit hours to qualify for the degree. It is why rankings, like those from U.S. News & World Report, play an outsized role in every type of schooling from undergraduate colleges to business schools to law schools. For employers and the public, a diploma from a top school is a signal that the graduate had to at least survive a rigorous game to get past Go.

In the 21st Century global economy, we need a better signal than the 20th Century version of the college degree.

My big idea for 2014 is that more colleges shift from measuring learning based on how much time students spend in a classroom to a system that is based on how much they actually know. The official term for this is “competency-based education,” and this past year, three universities—Northern Arizona University, the University of Wisconsin, and Southern New Hampshire—experimented with offering degrees in this way.

Here’s how it basically works: Students demonstrate mastery of a subject through a series of assessment tests or assignments, instead of following a prescribed set of courses. Faculty mentors work closely with students throughout a degree program to design a schedule and access the learning materials they need to demonstrate mastery and then another group of course evaluators grades those exams, research papers, or performance assessments.

We’ve all been in classes that moved too slow or too fast for our tastes. Competency-based education allows for more individualized instruction. If students understand the material they move on without waiting until the end of the typical fifteen-week semester they would find at most colleges. On the other hand, when they struggle with a concept, they are free to spend as much time as they need to grasp the subject, unhindered from the traditional academic calendar that puts a clock on the class.

The first graduate of Southern New Hampshire’s self-paced program, dubbed College for America, finished his associate’s degree in about 100 days. Because students pay a flat fee for a term where they can fit in as many assessments as they want, competency-based degrees are often less expensive than traditional degrees, too.

At Western Governors University, which has followed a competency-based model since it was founded in the late 1990s, 25,000 students pay just under $3,000 a semester for as many courses as they can complete in a six-month period. The average student at Western Governors completes a bachelor’s degree in about two and half years for a price tag in the neighborhood of $15,000. That’s about half the time it takes the typical student in traditional higher ed to get a bachelor’s degree and half the price.

For all the attention showered on Massive Open Online Courses (MOOCs) this past year for being innovative, it is competency-based degrees in my opinion that have the real potential to bend the cost curve in higher ed by reducing the time to a degree.

Right now, that system is measured in credits, semesters, academic years. The foundation of this system is the credit hour, a concept defined officially by the federal government as one hour of direct faculty instruction and two hours of work outside of class each week during the semester.

The rules allow for alternatives, including internships and lab work, but all are based on the standard of time spent in a chair. This method of measurement, of course, fails to assess what is actually learned in those seats in any meaningful way. It also doesn’t serve the 37 million Americans who have some college credits but no degree and don’t have the time or money to sit in a college classroom for hours a week for several months.

Now, some might question the legitimacy of a degree that isn’t earned by spending those hours in a classroom. I certainly did at first. While writing my book on the future of higher ed, I met a student at Western Governors, Sheryl Schuh. Her shortest class, Reasoning and Problem Solving, lasted just two weeks; her longest class, Tax and Financial Accounting, ran fourteen.

“I couldn’t pass that assessment and move on until I got a B,” she says of the tax class. “So I studied more, I read more, I worked through more problems. Anywhere else, I would have been happy enough with a C and moved on. Here, I couldn’t quit. I’d call that rigorous.”

It also tells employers that there’s more behind her degree than simply sitting in a class for 15 weeks.

Jeffrey Selingo is author of College (Un)Bound: The Future of Higher Education and What It Means for Students, contributing editor at The Chronicle of Higher Education, and a professor of practice at Arizona State University. Follow him here by clicking the FOLLOW button above, at jeffselingo.com, and on Twitter @jselingo

Photo: l i g h t p o e t / shutterstock