EAB Daily Briefing primer: The Obama administration's college ratings plan

Key questions answered

The Obama administration in December released a "draft framework" of its college ratings plan, which broadly outlines what metrics will factor into a school's ratings and is scheduled to launch for the 2015-2016 school year.

The framework shows the Department of Education will evaluate community and four-year colleges on access, affordability, and student outcomes, then group schools into three tiers: high performers, low performers, and "in the middle."

The administration says it's developing a college rating system in order to:

  • Help institutions benchmark and improve education access, outcomes, and affordability;
  • Provide students and families with accurate, pertinent information; and
  • Inform funding and accreditation decisions.

Eventually, the administration plans to tie the ratings to the $150 million in federal aid it gives to schools annually, although that will require congressional approval.

Who will the ratings measure?

In the first batch of ratings, Department of Education officials plan to include four-year and two-year institutions that award baccalaureate degrees, associate degrees, or certificates.

Two- and four-year schools will be rated differently, and the administration plans to compare institutions with similar missions.

Additional categories such as selectivity and degree mix are under consideration, but have not yet been announced.

What will the ratings measure?

The ratings will focus on three qualities of colleges:

  • Access, such as the percentage of students receiving Pell grants;
  • Affordability, based on average tuition, scholarships, and loan debt; and
  • Outcomes, including graduation and transfer rates, graduate income, and number of students continuing on to obtain advanced degrees.

How will those qualities be measured?

For the first ratings, officials will use data from federal administrative systems and collections such as the Integrated Postsecondary Education Data System (IPEDS), the National Student Loan Data System (NSLDS), and earnings information. The Department of Education is also considering allowing schools to supplement those sources with alternative data as well.

There are 11 metrics under consideration:

Share of students receiving Pell Grants may be used to measure the percentage of low-income students enrolled. However, low-income international students are not eligible for federal aid and therefore would not count here.

Expected Family Contribution (EFC) gap will likely be "the average difference between some focal EFC level and each student's individual EFC," although the Department of Education has not yet finalized that definition.

Family income quintiles could be used to highlight socioeconomic diversity on campus based on FAFSA income reports, but this would leave unknown the incomes of students who did not apply for FAFSA, a significant proportion at some schools.

First-generation college status may be used to measure student diversity. This could also be calculated using FAFSA data, but would have the same weakness of only counting those who filled out the form.

Average net price, or what students usually pay after financial aid discounts, is available through IPEDS, could factor in as well. However, IPEDS' net price data apply only to first-time, full-time students receiving federal, state, or local government grants or scholarships. Also, public institutions do not count students paying out-of-state tuition prices.

Net price by quintile measures first-time, full-time students receiving federal financial aid and is supposed to give students a reasonable estimate of what they might pay based on someone similar. However, outliers can skew the data and schools vary in how they measure income.

Completion rates count how many first-time, full-time students earn degrees within six or three years (the latter being for community colleges). Experts worry this measurement may push schools to reject students likely to struggle and significantly affect low-income and minority students.

Transfer rates will account for students leaving community colleges for four-year institutions.

Labor market success may set an earnings floor for graduates and account for differences between majors and regions. But officials acknowledge that the incomes graduates earn straight out of school are not always reflective of what they will make later on. Details of how this will be calculated have not yet been released.

Graduate school attendance within 10 years of graduation may be measured to account for lower job-placement and short-term earning levels. However, accurate data are difficult to find—currently, only students taking out federal loans can be accounted for—only about half of graduate students.

Loan performance outcomes may add deferment, forbearance, and repayment rates to the current cohort default rates of students.

What decisions remain?

As of January 2015, the administration is still considering which specific metrics to include, what thresholds will divide the three rating levels, and how to account for improvement over time. The Department of Education is seeking comments until Feb. 17 on possible categories.

The administration also is seeking feedback on how to publish the metrics. For example, they are deciding between creating an aggregate score and keeping all scores separate.

Officials also are exploring ways to incorporate several years of data for each metric, in order to protect against missing data or one-time shocks, and considering how to include intermediate measures, given that the administration's target metrics frequently lag six to 10 years behind available data.

Finally, the website housing the ratings and accompanying tools will undergo consumer testing before launching (ED release, 12/19/2014; ED invitation to comment, 12/19/2014; Mangan/Supiano, Chronicle of Higher Education, 12/19/2014; Belkin, Wall Street Journal, 12/19/2014; Bidwell, U.S. News & World Report, 12/19/2014).


Next in Today's Briefing

EAB Primer: What do the federal 'gainful employment' standards mean for higher education?

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