The government invests a lot of money into higher education every year — $150 billion in federal student financial aid alone, plus $70 billion from states. So, President Obama proposed on Thursday, the government should make sure taxpayers are getting good value for their money, instead of paying schools based simply on how many needy students they enroll.
It’s a good idea. Except . . . well, I’ll let the president explain why this could be pretty hard.
“Today, I’m directing Arne Duncan, our secretary of education, to lead an effort to develop a new rating system for America’s colleges before the 2015 college year…I think we should rate colleges based on opportunity. Are they helping students from all kinds of backgrounds succeed? And on outcomes, on their value to students and parents.
So that means metrics like: How much debt does the average student leave with? How easy it is to pay off? How many students graduate on time? How well do those graduates do in the workforce? Because the answers will help parents and students figure out how much value a college truly offers.
Once the rankings have been in place for a while, the president continued, Congress should tie student aid funding to how well colleges and universities score.
The concept is worthwhile. But Ezra Klein rightly points out that some of the criteria Obama mentioned might give certain schools an advantage for the wrong reasons — rewarding those that, say, pump out high-earning graduates rather than teachers. In fact, as Obama himself indicated on Thursday, the problem is bigger than that: Colleges might try to manipulate the system.
“Right now,” the president said, “private rankings like U.S. News and World Report puts out each year their rankings, and it encourages a lot of colleges to focus on ways to — how do we game the numbers.”
Obama probably meant to argue that Education Department rankings would counterbalance some of the perverse incentives that the U.S. News rankings provide to schools. But he accidentally made a broader point about the whole college-rankings enterprise: It’s hard not to introduce perverse incentives into the system, particularly when lots of cash is on the line. If the government starts using, for example, graduation rates as a key metric of college success, that would make a lot of sense. But it would also encourage colleges to loosen standards in ways that are hard to quantify in a ranking scheme.
James Kvaal, deputy director of the president’s Domestic Policy Council, assured reporters that, “We’re going to ask Secretary Duncan to lead the conversations with the community and talk about what data is available and what data might be desirable in the course of developing these ratings.”
But the real desirability of the president’s promising initiative won’t be clear until Duncan figures out exactly which metrics he wants to use to judge schools.