Obama’s Tentative Plan for College Ratings

When the White House released the outlines of its long awaited college ratings plan on Friday, the world of higher education was underwhelmed. Colleges are “a little mystified,” Sarah Flanagan of the National Association of Independent Colleges and Universities told the Chronicle of Higher Education. “There isn’t much new here, and there isn’t much that gives us a road map as to where they’re going to go.” After more than a year of discussion, the report seems to be just a list of criteria the administration may consider in determining where colleges fall on the list. “Does this increase our confidence that they would do this [rating system] well? The answer is no,” says Terry Hartle of the American Council on Education. “They would get an incomplete on this.”

It’s true, the five-page report hardly seems like it should have taken a year to produce. For instance, the Department of Education concluded that it won’t be actually ranking the schools from best to worst but is instead “considering three rating levels: high performing, low performing, and those in the middle.” (How many committee meetings were required to arrive at that?)

But those ratings, the White House hopes, “will generate reliable, useful data that policymakers and the public can use to hold America’s colleges and universities accountable for key performance measures.” In other words, Congress and the Department of Education may soon be using these ratings to allocate scholarships and research support to colleges and universities.

The truth of the matter, though, is that the closer the administration gets to specifics, the more harm it will do. There is nothing particularly objectionable to any of the “metrics” announced yesterday, which seemed generally focused on the question of increasing the access of poor students to higher education. Measures like the percentage of students who receive Pell Grants or the number who are first generation college students are useful. But they are already widely available.

The White House is not exactly on the cutting edge either when it considers such measures as average net price (taking into consideration the fact that most students don’t pay sticker price at an institution) or loan performance outcomes (what percentage of students default on their college loans). We have come a long way since the early days of the US News rankings three decades ago when parents had difficulty even figuring out a college’s sticker price or the percentage of students on financial aid.

Now college rankings are everywhere: the challenge today is in determining which are most accurate or useful. From Forbes to the Atlantic, Washington Monthly to the New York Times, Money magazine to LinkedIn, there are dozens of publications and hundreds of researchers trying to give parents and students the information they think will be most useful to them in making choices about higher education. Higher education has grown more complex but all of these rankings make it more possible than ever for parents and students to act as educated consumers in the college and university market.

And, as in most markets, consumers want different things. While US News has a system that rewards colleges whose professors earn prestigious research awards, Forbes (in cooperation with the Center for College Affordability and Productivity) rewards schools whose students earn fellowships, scholarships, and other prestigious awards.

But there are disadvantages to any system. Ranking institutions by starting salaries of graduates necessarily favors schools whose graduates go into investment banking, consulting, or law, and penalizes institutions whose graduates decide to teach, write for a living, join the clergy, or work for not for profit institutions.

Measuring outcomes at the non-elite schools is even more complicated. While the White House says it plans to take account of transfer rates at community colleges because many students start out at two-year schools without planning to stay there for a degree, it does not take account of many students who take classes at a community college to improve a certain skill set without getting a new degree at all. The administration seems intent to stick with the “gainful employment” rules it has placed on for-profit colleges. Will nonprofits now be measured the same way?

And for better or worse, the new metrics do not begin to take into account the content or quality of the education students are getting. Schools do not earn points for requiring students to learn foreign languages, to pass a core curriculum, or achieve a level of proficiency in math or science.

The best thing that can be said about the Obama administration getting into the ranking business is that schools may think twice before they fudge data they’re sending to the federal government. Various colleges have tried to “game” the private ranking systems in the past but now that will be more difficult to do. Even so, these rankings are likely to do more harm than good. Unlike the private rankings out there, the federal government plans to tie these rankings to actual dollars colleges and universities receive from Washington.

Worse still, there is no recognition in any of this that federal policies are heavily to blame for the high costs and misplaced priorities of the higher education industry.  Rising levels of federal aid have created an environment where college administrations have increased tuition year by year to the point where middle class families cannot afford the annual costs of public universities, let alone expensive private institutions. The flow of funds from Washington has also allowed administrators to subsidize bloated bureaucracies and luxury facilities that do nothing to advance genuine educational goals.

It is also possible to see from this initial report how Washington will continue to push the levers of aid in subtle ways in order to further its economic agenda. For instance, in order to account for the fact that some colleges may not send kids into the most high paying professions—or may not send them there right away—the administration is considering a minimum threshold for graduate earnings above which it wouldn’t penalize or reward schools for starting salaries of their graduates. Tied to minimum wage or the federal poverty line, it will be yet another way for bureaucrats in Washington to signal to employers what they think a recent college graduate should be earning.

It will be at least another year before the full system is revealed and just like any sector awaiting a big release of new regulations, college administrators are growing increasingly anxious. Indeed, it’s only going downhill from here.


  • James Piereson and Naomi Schaefer Riley

    Mr. Piereson is the director of the Center for the American University at the Manhattan Institute. Ms. Riley is the author of “The Faculty Lounges… And Other Reasons Why You Won’t Get the College Education You Paid For.”

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