How two words stir controversy on federal plan to rate US colleges

It’s just a two-word phrase, but it goes to the heart of what’s both controversial and promising about an Education Department proposal for rating of US colleges.

The Department on Friday said it plans to report “employment outcomes” for colleges, alongside tuition and other data – all designed to give US families better information when making enrollment choices.

Such information promises to give students and parents a useful new tool as they make consequential decisions. And “outcomes” for graduates (things like employment rates and income levels) are something the federal government can track using data not available to private-sector or state-level surveys.

But the idea of a federal rating system for colleges, first announced by the Obama administration a year ago, has lots of critics who say it’s either unnecessary or will unfairly penalize many institutions with skewed or oversimplified ratings. The idea of publishing employment and earnings outcomes has drawn particularly loud complaints.

The Obama administration argues that in an era when advanced schooling is more vital to Americans than ever, new ratings are needed that encompass things like average loan debt and completion rates at particular schools.

Two- and four-year colleges would be rated as high-performing, low-performing, or in the middle, according to the Education Department framework. The Department invited comments about whether the ratings should be given in various categories, like average loan debt and completion rates, or whether to blend those elements into a single rating for each college.

Job-market success might be tracked using a measure of whether graduates find "Substantial Employment" (such as a job paying twice poverty-level income) in the near term, plus a longer-term measure of median earnings for graduates.

Part of the idea is that a better cost-benefit analysis can put pressure on colleges and universities to control ever-rising tuition.

Jamienne Studley, deputy undersecretary of education, said in a blog post Friday that the ratings system will recognize “institutions that excel at enrolling students from all backgrounds; focus on maintaining affordability; and succeed at helping all students graduate with a degree or certificate of value.”

“As part of this process,” she explained, “we hope to use federal administrative data to develop higher quality and nationally comparable measures of graduation rates and employment outcomes that improve on what is currently available.”

The Education Department’s framework is still a work-in-progress – so much so that some critics say the administration has made little progress in a year of effort.

The document, released Friday, says that federal efforts can capture employment and earnings data for “a broad swath of each institution’s past enrollees that avoids some of the shortcomings of data from graduate surveys, or sources limited by state boundaries.” But it notes that, so far, federal numbers are only available for people who got federal student aid.

Even before the framework’s release, the Education Department has been hearing what it calls “extensive comments” about possible unintended consequences of measuring graduate incomes.

Among the concerns is that ratings that put a high weight on earnings “would create excessive disincentives for students from entering fields that lead to important but lower paying positions.” A college might cut back on programs that prepare people for careers in social service, for instance.

More broadly, some critics of the Obama ratings effort say it risks distracting Americans from college benefits that go beyond career advancement.

And behind all these concerns is the question of whether the federal government can be – or needs to be – a scorekeeper in this arena at all.

“Trying to create yet another complicated, federal system – this time for grading our country's 6,000 colleges and universities – is every bit as impossible and unnecessary as it sounds and is sure to fall flat on its face,” Sen. Lamar Alexander (R) of Tennessee said Friday, after the framework was released.

“Making sure students have access to the information they need to pick the right school is important and something we will discuss during the next reauthorization of the Higher Education Act, but I can’t support letting Washington bureaucrats use taxpayer dollars to fund a higher education popularity contest," he added.

Debate over the new framework comes at a time when college costs have soared and middle-class incomes have been stagnating. And in an economy still lean on jobs, the question, “Is college worth it?” has become a staple of magazine covers.

Economists say college generally remains a very worthwhile investment, but not just any degree at any price.