The New College Scorecard Aims To Offer New Insights Into The Value Of A University Degree

Obama Administration College Scorecard

The Obama administration released its much-anticipated college scorecard Saturday, offering new insights into the value of a university degree—and the risks associated with getting one.

The new system will present the average earnings of graduates at individual schools using Internal Revenue Service data. The scorecard spells out how students fare 10 years after graduation as well as how they compare with people who entered the workforce with just a high-school diploma.

Americans will “be able to see how much each school’s graduates earn, how much debt they graduate with, and what percentage of a school’s students can pay back their loans,” President Barack Obama said in his weekly radio address, according to prepared remarks provided by the White House. The scorecard “will help all of us see which schools do the best job of preparing Americans for success.”

The president announced a ratings system two years ago with the goal of exposing poor performing schools and curbing college costs. His approach sparked an immediate backlash from college presidents who claimed the paucity of reliable earnings data and the diversity of missions among postsecondary institutions would necessarily make a one-size-fits-all rating system both specious and misleading.

Mr. Obama bowed to that pressure by dropping his plan to compare schools against one another and abandoning plans to tie public funding to the results of the system. He also walked back expectations by changing the “ratings system” to a “scorecard,” saying the comparisons should be left to others.

Still, the watered-down scorecard didn’t please the higher-education establishment, which has a long track record of blocking federal accountability measures.

“There is widespread interest in having accurate data about the earnings of college graduates, and the revised College Scorecard being unveiled by the Department of Education is an attempt to respond to that demand,” said Molly Corbett Broad, president of the American Council on Education, which represents the presidents of more than 1,700 colleges and universities. “However, developing a system of this size and scope is a complicated and nuanced endeavor and the department has done so without any external review.”

Amy Laitinen, a higher-education policy analyst at left-leaning Washington think tank New America Foundation and an advocate for transparency in the sector, said the scorecard appeared to offer an “unprecedented amount of data.”

“I think students and their families who are making the most expensive decisions in their lives deserve good information and I think this is an important step in getting there,” she said.

The scorecard enables prospective students to compare the net price of a school according to their family’s household income as well as what the monthly student debt payments will be after graduation. It will also show graduation rates, the ethnic breakdown of the student body and the most popular areas of studies at a school.

For example, a prospective student could compare the median earnings 10 years out of college for different schools and see that for Harvard University it is $87,000, for Stanford University $81,000, for Columbia University $73,000 and for Princeton University $75,000.

At the same time the median debt of graduates vary considerably: for Harvard it is $6,000, for Stanford $12,224, for Columbia $19,435 and for Princeton $6,810.

Part of that discrepancy is related to the number of low-income students receiving federal aid through Pell grants. At Harvard the share of Pell recipients is just 10%, at Princeton it is 12%, at Stanford it is 16% and at Columbia it is 22%.

The earnings numbers, which are by far the most provocative aspect of the scorecard, are hampered by significant limitations in data imposed by Congress. Income after graduation is calculated using only the tax returns of students who borrowed money from the government to attend school. Also, future earnings aren’t broken down by program or major, which can mask significant variation within a school.

In a conference call with reporters, administration officials said they believed the new data on the scorecard would affect the behavior of colleges and universities, which will have to respond to the demands of more-informed consumers.

“Students deserve to know if their investment of resources and hard work in college is going to pay off,” said Education Secretary Arne Duncan. “And taxpayers deserve to know if the money that we are all investing in schools will go to schools that deliver a good value.”