This doesn't work for everything, but it would certainly provide some much-needed competition for the education monopoly we now face.
If there were a true free market in higher education, the costs would not have risin at such an extreme rate for the last 10-20 years. How much does it really cost for the business professor to teach a class of 35 students 4 hours a week? The price tag far, FAR outweighs the actual cost.
You can test out of a lot of at least first year classes already.