The Rise and Fall of Federal College Ratings

President Obama’s 2013 announcement that a set of federal college ratings would be created and then tied to federal financial aid dollars caught the higher education world by surprise. Some media coverage at the time even expected what came to be known as the Postsecondary Institution Ratings System (PIRS) to challenge U.S. News & World Report’s dominance in the higher education rankings marketplace. But most researchers and people intimately involved in policy discussions saw a substantial set of hurdles (both methodologically and politically) that college ratings would have to clear before being tied to financial aid. This resulted in a number of delays in the development of PIRS, as evidenced by last fall’s delayed release of a general framework for developing ratings.

The U.S. Department of Education’s March announcement that two college ratings systems would be created, one oriented toward consumers and one for accountability purposes, further complicated the efforts to develop a ratings system. As someone who has written extensively on college ratings, I weighed in with my expectation that any ratings were becoming extremely unlikely (due to both political pressures and other pressing needs for ED to address):

This week’s announcement that the Department of Education is dropping the ratings portion of PIRS (is it PIS now?) comes as little surprise to higher education policy insiders—particularly in the face of bipartisan legislation in Congress that sought to block the development of ratings and fierce opposition from much of the higher education community. I have to chuckle at Education Undersecretary Ted Mitchell’s comments on the changes; he told The Chronicle of Higher Education that dropping ratings “is the exact opposite of a collapse” and “a sprint forward.” But politically, this is a good time for ED to focus on consumer information after its recent court victory against the for-profit sector that allows the gainful employment accountability system to go into effect next week.

It does appear that the PIRS effort will not be in vain, as ED has promised that additional data on colleges’ performance will be made available on consumer-friendly websites. Although I am skeptical that federal websites like the College Scorecard and College Navigator directly reach students and their families, I am a believer in the power of information to help students make at least decent decisions, but I think this information will be more effective when packaged by private organizations such as guidance counselors and college access organizations.

On a historical note, the 2013-2015 effort to rate colleges failed to live up to efforts a century ago, in which ratings were actually created but President Taft blocked their release. As Libby Nelson at Vox noted last summer, President Wilson created a ratings committee in 1914, which then came to the conclusion that publishing ratings was not desirable at the time. 101 years later, some things still haven’t changed. College ratings are likely dead for decades at the federal level, but performance-based funding or “risk-sharing” ideas enjoy some bipartisan support and are the next big accountability policy discussion.

I’d love to be able to write more at this time about the path forward for federal higher education accountability policy, but I’ve got to get back to putting together the annual Washington Monthly college rankings (look for them in late August). Hopefully, future versions of the rankings will be able to include some of the new information that has been promised in this new consumer information system.

It’s Time to Make Accreditation Reports Public

The higher education world is abuzz about this week’s great piece in The Wall Street Journal questioning the effectiveness of higher education accrediting agencies, whose seal of approval is required for a college to receive federal student financial aid dollars. In the front-page article, Andrea Fuller and Douglas Belkin of the WSJ note that at least 11 accredited four-year colleges had federal graduation rates (excluding part-time and transfer students, among others) below 10%, which leads one to question whether accreditors are doing their job in ensuring institutional quality. A 2014 Government Accountability Office report concluded that accreditors are more likely to yank a college’s accreditation over financial concerns than academic concerns, calling for additional oversight from the U.S. Department of Education.

Congress has also been placing pressure on accreditors in recent weeks due to the collapse of the accredited Corinthian chain of for-profit colleges and the Department of Education’s announcement that at least some Corinthian students will qualify for loan forgiveness. The head of the main accreditation body responsible for most Corinthian campuses got grilled by Senate Democrats in a hearing this week for not pulling the campuses’ accreditation before the chain collapsed. As a part of the (hopefully) impending reauthorization of the Higher Education Act, members of Congress on both sides of the aisle are interested in a potential overhaul of the accreditation system.

Students, their families, policymakers, and the general public have a clear and compelling interest in reading the reports from accrediting agencies and knowing whether colleges are facing sanctions for some aspect of academic or fiscal performance. Yet these reports, which are produced by nonprofit accrediting agencies, are rarely available to the public. For the WSJ piece, the reporters were able to use open-records requests to get accreditation reports for 50 colleges with the lowest graduation rates. I was recently at a conference where the GAO presented on their aforementioned accreditation report and asked whether the data they compiled on accreditor sanctions was available to the public. They suggested I file an open records request, something which I’ve (unsuccessfully) done for another paper.

Basic information about a college’s accreditation status and reports –including any sanctions and key recommendations for improvement—should be readily available to the public as a requirement for federal financial aid eligibility. And this should cover all types of colleges, including private nonprofit and for-profit colleges that accept federal funds. The federal government doesn’t necessarily have to get involved in an accreditation process (a key concern of colleges and universities), but it can use its clout to make additional data available to the public. (Students probably won’t go to the college’s website and read the reports, but third-party groups like guidance counselors and college rankings providers would work to get the information out in more usable form.) A little sunshine in the accreditation process has the potential to be a wonderful disinfectant.

What if College Amenities Were Unbundled?

Recent articles by Jeff Selingo in the Washington Post and Matt Reed in Inside Higher Ed have address the idea of “unbundling” college credits. Selingo contends in his piece that two of the reasons why students pay so much for college is that they face the same price if taking 12 or 15 credits per semester (true at many colleges) and that colleges don’t always accept transfer credits in an effort to generate revenue (probably true, but difficult to prove). Reed notes an important distinction regarding transfer credits—although students may get credit for a community college course at a four-year institution, the credit might be granted as an elective that still requires the student to take the course over again.

Both Selingo and Reed refer to the push to allow consumers to unbundle their cable packages as a potential example of what to do (or not to do) in higher education. Currently, consumers have to choose a bundle of channels in order to get the particular channel or two they are the most interested in actually watching. A recent report estimated that cable companies paid an average of $6.04 per month to carry ESPN—and this gets passed along to consumers regardless of whether they actually want to watch the channel. Verizon has recently allowed subscribers to choose what types of channels they want to pay for, and Disney (the owner of ESPN) promptly sued to maintain the bundle. Disney’s fear is that maybe only half of the subscribers would pay $6 per month for ESPN, meaning that the price would have to double in order to match the previous revenue—at which point more customers would likely opt out.

Higher education offers similar examples of bundling that would quite possibly be brought down if students had the choice to select their preferred options. At many colleges, amenities such as recreation centers and intercollegiate athletics programs are funded through mandatory student fees. For example, the typical Big Ten Conference university charges students about $150 per semester in fees to fund recreational activities, regardless of whether a student actually chooses to use any facilities. While students often vote to approve the initial imposition of the fee, students who enroll in later years still have to pay the fee even if they would not have voted for it in the first place.

Fees for supporting intercollegiate athletics can be over $1,000 per year at some colleges, particularly at institutions without large donor bases or other revenue sources. An example is Longwood University in Virginia, which charges $239 per credit hour in tuition alongside over $63 per credit in athletics fees. This means that Longwood students taking 120 credits would be paying about $7,500 to subsidize athletics during their time on campus, something which many students might opt out of it they had a chance.

Higher education could be unbundled in other ways, including removing any requirements that students live on campus or purchase a meal plan, ending provisions requiring students to complete a certain number of credits in residency, or even potentially through the encouragement of open courseware that does not require an expensive subscription through the college. But any such efforts to unbundle will take away important revenue sources, so expect colleges to compensate in any way that they can. There is value in some of the bundling requirements, to be sure—for example, campus mental health services may not be offered if students had to opt into paying for the ability to access services. But it is worth having a conversation about what should be bundled and what should be provided on an a la carte basis.