There is definitely a bizarre market dynamic in higher education right now. That doesn't mean that a degree is useless for learning (some more than others, I'm sure). However, because of the effect of 'prestige' on school values, there are a lot of undesirable effects on the academic market. It is a weird economic conundrum that colleges are putting out more producers (graduated possible professors) than can find work, while at the same time college prices are rising. It's like farms breeding too many dairy cows and at the same time there is a milk shortage, because only milk from a few non-expanding dairies is considered good enough.<p>Since the perceived value of a degree when it comes to the job market has much more to do with a school's reputation than it does with the actual educational accomplishments of the degree holder, what I would do is use the $1 billion to create a new university which would do all it could to spread the prestige away from the schools where it is centralized.<p>In other words, there are only a few Harvards or Cambridges in the world. If there were 1000 schools of this perceived quality, no one would bother even knowing their names. You might look one up to see if it was on the 'list of quality schools'. In theory, accreditation is supposed to be like that. But in the real reputation market, Harvard and say, Eastern Carolina might both be accredited schools, but there are significant differences in reputation. I would gladly wager that the best student at ECU is a better student than the worst at Harvard, but the Harvard fellow will benefit from his schools reputation in a way that the ECU fellow will not. And this is why schools with less prestige cannot offer effective price competition with more prestigious schools, regardless of actual quality of education per dollar.<p>This is a problem when it comes to the ever-increasing cost of college, because the reputation effects keep faculty from just going off and making their own new college to compete with their current employer. If the Harvard biology department all took jobs with Example State, this would increase the prestige of Example State, but the professors would feel more of a loss of prestige than Harvard would. Even though it's the same department, with the same professors!<p>So, I'd hire a bunch of prestigious faculty in a specialized area, to create a school which could compete with the Ivys for e.g. 5% of their student body. I'd build reputation for the school by sponsoring contests and conferences which accentuate the dominant position of the new school in its chosen area. And I'd aggressively recruit the best students in that area from other schools, by offering easy credit transfer, better student aid, etc. Until people in one particular field say, "Harvard? It's not like you went to Fiat Lux Dave University".<p>Rinse and repeat (with as many $billions as available), until sanity returns to higher ed costs.