Several days ago the President proposed that the federal government create a rating system ("scorecards”) beginning in 2015 to rank colleges by such metrics as tuition, percentage of low-income
students, graduation rates, alumni earnings, and debt of graduates. Federal financial aid to students, currently running at $150 billion a year, would be allocated on the basis of the ratings, though this part of the proposal would require legislation; the other parts the President can effectuate without congressional action. For a good summary of the program, see Dylan Matthews, “Everything You Need to Know About Obama’s Higher Ed Plan,” Wonkblog, Aug. 22, 2013, www.washingtonpost.com/blogs/wonkblog/wp/2013/08/22/everything-you-need-to-know-about-obamas-higher-ed-plan/.
There are of course college rating systems already, such as that of U.S. News & World Report. A federal rating system would probably have somewhat greater credibility; and if it became the basis for allocation of federal financial aid, the system would have far greater effect on college choice, given that more than 80 percent of college students receive federal financial aid.
Multi-factor rating systems have an obvious, and very serious, problem: weighting. It is almost certainly the case that the factors in the proposed “scorecard” don’t have the same importance to an intelligent choice of which colleges to apply to. Worse, there is unlikely to be agreement on which factors are the most important and so should be given the greatest weight—and how much more weight than the other factors. That won’t matter a great deal as long as the ratings just guide college
choice, for then parents and their kids will give whatever weight they want to the various factors. But the ratings will matter greatly—and influence that choice—if Congress allows them to be used to govern the allocation of federal financial aid to students.
To evaluate the President’s proposal, we need to step back and consider what ails our higher-education system. It is helpful to note the affinity between its rather doleful situation and that of our health care system. The top institutions in both systems provide world-class quality of service, mainly to children of the affluent and nearaffluent—the top tier of American universities and colleges is generally considered tops in the world. Both systems provide indifferent quality at the bottom, the bottom-tier universities and colleges being worse than the bottom-tier hospitals and clinics. Both systems are very expensive, with much of the tab picked up by the taxpayer—both are very expensive in part because of poor quality control by the federal government. The government is not a very competent financier, in major part because it is buffeted by interest groups wielding formidable political power.
The Administration’s Affordable Care Act (“Obamacare”) is an enormously ambitious, almost incomprehensibly complex, effort to improve medical care and at the same time reduce the rate of growth of the nation’s medical expenditures. The President’s new higher-education proposal is much less ambitious, especially if one sets to one side the part that requires congressional approval—the part about keying federal financial aid to universities and colleges to how well they perform on the “scorecard.” It is worth analysis, of course, but can be relegated to secondary concern on the pragmatic ground that congressional approval appears to lie far in the future.
The Presidente’s proposed ratings do identify characteristics of colleges and universities that parents and their high-school children should consider in deciding whether (and where) to apply to college. True, most of the information is available already, but not (so far as I know) in a compact, readily readable and comprehensible form, amd of course missing the imprimatur of the federal government. The Wall Street Journal in an editorial yesterday (August 24) scoffed at the supposition that the government can pick “winners.” But that isn’t the purpose of the ratings. The purpose is to provide accurate, readable information for the relevant consuming public, and so understood seems perfectly appropriate. The “picking winners” criticism will become more apt if and when Congress authorizes the allocation of federal financial aid on the basis of the ratings.
But I do think the scorecard even when viewed purely as an information device can be criticized. For example, while I can see why the percentage of low-income students in a college would be an appropriate factor to consider in allocating federal aid, I don’t see its relevance to the choice of a college by would-be applicants. Tuition, on the other hand, is a relevant factor, obviously, but is disclosed up front by any college or university to which one applies. Alumni earnings sound relevant, but the problem is that they necessarily are backward looking. They are the record of experiences of previous students, and may reflect characteristics of the college or of the job market that have changed since those generations of students graduated. The amount of debt of graduates is similarly an ambiguous signal to a prospective applicant. If the debt of graduates of a particular institution is above average, this may reflect career choices or excessive optimism, things for which the college may bear only limited, if any, responsibility. The factor is included in the scorecard I assume because of a belief that some colleges lure students by obfuscating the financial obligations that a student who applies for financial aid will be taking on. I think this belief is correct but I don’t know how much
of the indebtedness of graduates it is responsible for.
Most American colleges and universities are nonprofit, but that just means that are don’t have shareholders; profit residuals are dissipated in generous salaries for administrators and faculty, student amenities designed to attract rich kids and thus increase (along with high-powered sports programs) future donations, and lavish building programs. The colleges compete with each other with Darwinian ferocity. Federal financial aid has them to increase tuition at an astonishing rate, which has funded the competitive extravagances. The nonprofit colleges and universities seem just a tad less avaricious than the profit-making ones.
The competition has greatly increased the number of college graduates—to the point where many cannot find a job requiring a college education. IQ is a limiting factor in the value of a college education in the job market.
So below the very top tier of institutions, the picture of American higher education has become rather depressing. The President’s newly announced program seems unikely to work any significant improvement.
I picked up the most suitable college in my affordable options. I graduated without any tuition loans. It was my best choice thinking backwards 10 years later. The high school students and their parents shall take their responsibilities to make a reasonable choice without putting themselves in debt of unaffordable tuition loans. I am kind of concerned about the allocation of federal aids linking with federal rating system. No matter which metrics picked for the federal rating system, it may bring the constitutional challenges in the federal aid allocation.
Posted by: Lucy Lu | 08/26/2013 at 10:43 PM
Fundamentally it's a problem between our Ideals of and for Education and the Realities of Life, especially in the Economic sense. "Education is good, vital and important, so get as much as you possibly can" - the Ideal. The Reality, "Education costs and someone has to pay for it". Since the Budgets are screwed-up and inflation out of control, you're going to have too pickup more of the costs yourself. Couple that with the reality of, "We operate in an International Economic environment and due to your education you cost too much (but we need and want educated employees). Job Application denied". But Education is a good, vital and important thing, so get as much as you possibly can". See the Paradox and Contradiction? So what's the "poor" student too do?
Posted by: Neilehat | 08/28/2013 at 08:23 AM
Henry Goddard, whose grave I often pass, may have gotten several things wrong but I believe he had a couple of things right. One of them is that his work had a decidely practical bent. He coined the term "moron", still quite popular, for a person with an IQ between 50 and 75, but he then elaborated a scale of useful work that could be done the moron, imbecile, or idiot.
Check my arithmetic, but something north of 150 million people in this country are below average, and they are our focus here. The above average are doing okay.
People want the financial rewards of an education, which leads them to take practical subjects, but they also want the experiential rewards of the process, so they take a lot of not-so-useful stuff too.
A talent is an ability that comes without training, e.g., some people can sing well without studying singing. A skill is an ability that comes from effort - study and practice. Aptitude is a pre-disposition to acquire a skill with less than average effort.
My point, and I do have one, is: Whatever happened to guidance counselors? There seems to be an enormous disconnect between the aspirations and the abilities of large numbers of people. A hundred years ago many people had only a few years of school or less, and it was figured out quite quickly who should continue and who should go into labor - no doubt albeit with some inaccuracy here or there. When I went to 9th grade, I sat down with a guy who looked at my grades and suggested college prep; he didn't say that to most of my classmates. Suddenly we have Bill Clinton saying everyone should have two years of college, and up has sprung an industry of providing "college" after a fashion to people who obviously have little aptitude for what was previously known as college. I believe an enormous inefficiency flows from this faulty premise. People buy a lot of education they don't need and can't use, and they end up even worse off than they started because now they are not only unemployed but in debt besides. So, I think the problem at hand can be cut down to size by intelligent targeting, people thinking more carefully about what education they buy and what benefit they will be able to extract from it. Of course, the individual is currently constrained by a system of overly broad degrees, certifications, and licenses, so this solution depends on cooperation from the top - which makes it entirely nonviable. I guess we're stuck.
Posted by: Terry Bennett | 08/28/2013 at 09:56 PM
Terry, "Guidunce Counselors"? I remember mine from High School, "Like Huh?". As for Goddard, I prefer Heller's Yosarian from "Catch 22"... ;)
Posted by: Neilehat | 08/29/2013 at 08:35 AM
I'm almost agree with Michael Pillsbury - http://www.linkedin.com/in/michaelpillsbury that Obama knows more than we think together about his politic campaign. You'll see his tactic in October.
Posted by: D | 09/03/2013 at 05:40 PM
I grew up in my father's steel fabrication cooperation. I ran my own construction business and worked on getting the first synthetic oil operation operation up and running. When I asked the owners (who I knew) why they they took my bid, I was told it was because I was driving a late model 240D Mercedes Benz. But I did job on time and budget, and as head hunter found and supplied them with a excellent quality control chemist as well as building her QC lab. Later I switched my MB with a Cessna and a Hughes 500 (AKA OH-6) to keep my clients happy whether crossing the country or putting them, their bankers and lawyers at the race track to watch their thoroughbreds (the first trainer we used won at the 2004 Kentucky Derby). I drove their limousines (I was trained at the Bondurant driving school), I also rescued, refurbished, or simply babysat their boats through hurricanes.
But despite the impressive skill set I had, I wasn't college educated, and treated as such. Like Chuck Yeager, being the fastest and most talented wasn't enough. He wasn't an astronaut because he didn't have a college degree. There is something very wrong with that picture, and I now have 3 degrees - two Summa Cum Laude - from an internationally known private school - surrounded by kids who complained I asked to many questions and yet would have been gibbering with an engine fire because they only had one engine and couldn't feather it. Because they didn't ask questions, and as General Yeager said (the only father I knew that borrowed a jet to get into Vietnam and "hunt" with his son) "never wait for trouble."
Posted by: CristobalBates | 09/04/2013 at 05:59 PM