#college loan interest rates
The New College Scorecard: How to Find Gold in the Data Dump
21 hours ago | Updated 21 hours ago
As if college admissions wasn’t confusing enough, now we have yet another ranking system to supposedly make it more transparent.
President Obama’s governmental plan to rate 7,000 U.S. colleges has been replaced by the new College Scorecard and greatly impacts college-going and college-interested students and their families. Tuition shaming. or perhaps more accurately, tuition transparency, is a concept that has gained an increasing amount of public interest in recent years. The College Scorecard does not necessarily score or rank colleges at all, but rather aims to provide information on annual college costs, graduation rates, and post-graduation salaries.
As the rating system and process was abandoned, the federal government utilized financial aid data and matched it with federal tax returns to assess post-graduation earnings (ten years later) for students who enrolled in college between 2001-2002.
For those who study higher education trends and data, and college students who live it, methodological assumptions overflow and concerns arise when reviewing the new College Scorecard. First, the College Scorecard employs data of federal student-loan borrowers only; other students, including students from families who did not apply for aid, and those who needed aid but did not apply, are excluded. Keep in mind that it’s precisely that group of students who started out with advantages that tend to earn more money so excluding all full payers skews the data. Second, data was collected for two years, 2001-2002, and with earnings assessments calculated ten years later, that places the salary review squarely in the midst of 2011-2012, a fairly significant time of a job crisis, an unemployment rate above 9%, and an underemployment rate of 16.1%. Some reporters have reviewed the College Scorecard negatively, citing it as a “data dump “, as non-federal aid borrowers were not included, field of study and post-graduation discipline are not factored in, college student retention was not considered, and many universities are missing from the Scorecard altogether.
However, there are pieces of the College Scorecard that will be helpful to students, their families, and those who study higher education. These include:
• the launch of a movement for colleges and universities to become more transparent with post-graduation salary data by field; • better informed families who may not yet be aware of posted tuition and fees information that colleges make available yearly (ex: MIT ); • greater student and family attention to financial aid borrowing, and federal loan entrance and exit counseling ; • and increased attention and self-prompted exploration of possible career fields prior to junior year, with the enhanced understanding that “with students’ future financial health on the line, discussions around major choice and career path are [presently] happening too late .
One helpful table we use all the time with our clients is the US News and World Report section (in the annual rankings issue) called The Payback Picture. This list ranks schools by most debt and least debt. Not surprisingly, colleges with huge endowments tend to have the least debt as most provide need blind financial aid – on the National University list we find Princeton, Yale, Harvard, Brigham Young, CIT and U of Houston in the top 5 and for liberal arts colleges, Berea, Louisiana State, UVA, Williams, Amherst, Pomona, etc. Those with most debt tend to be lower level colleges which may seem cheap up front, but they tend not to give as much aid – schools like Clark, U of Dayton, FIT and Barry lead the charge with St. Anselm, Green Mountain College, Dillard and College of St. Benedict on the liberal arts side.
We urge families to look beyond the basic scorecard and examine where students actually GO after graduating from a particular college. For example, a top research university might send a fair number of students into research or PhD programs – those students may have lower salaries in 10 years but still have the potential to boost their income as they advance in their field. Further, keep in mind students who eventually attend top business schools typically work for 5-10 years after college, so it’s important to look at the data well past the 10 year mark to see the salaries alums earn 15-20 years out. Of course we’d need to factor in ALL students, not just those who applied for financial aid in order for this info to be helpful.
Our job day in and day out is to make college and graduate school admissions more transparent and help students and their families navigate the complicated terrain so they have choices in their education. Even flawed rankings add to the conversation, add data to the process and bring up talking points families might not have considered previously.