Money Magazine Does Thorough Job On College Rankings–But They Cannot Be Your ‘Be-All, End-All’ For College Choices
Last week Money Magazine released its value-based college rankings. These relied on 24 measures in three statistical categories. I am not a statistician. But I do have some understanding of how to read and interpret statistics. I also know that, for example, a car magazine would not rank brand new small and inexpensive cars against brand new very expensive cars with more luxury, power or size. They might all be cars, but they are not the same type of car, and they don’t all fit the same type of car buyer. The same will be true of colleges. That’s why colleges that are quite different should not be ranked together, but Money did. Liberal arts colleges that offer only undergraduate degrees appear in the very same ranking as large public universities that grant doctoral and professional degrees.
The first category in these college rankings was “Educational Quality.” This was based on the six-year graduation rate (the maximum number of years that students may receive Federal financial aid); the incoming freshman class (who had not yet taken classes at the school) and a proprietary “comparable value” analysis of graduation rates vs. schools that have similar student populations. In other words, the magazine’s consideration of comparable value in college rankings came before they ranked all schools of all types together in one ranking.
The second category in these college rankings was “Affordability” which considers debt, the average net price (in state for a state university), affordability for low-income students (should consider percentage of need fulfilled, Pell Eligibility, state scholarships in the state where the school is located) and student loan default and repayment rates for the school. From the perspective of a family shopping for a college affordability is the ability of a college to meet their price, even if that price is zero. The school’s default rate, however, is contingent on a school’s failure to guide students towards a degree, not on the price of the school. Generally, the default rate will be higher at schools that have poor freshman retention and graduation rates. If these students default on their debt it is quite likely that they were not allowed to transfer to another college. The college that has the defaulted student would refuse to release transcripts if that student earned grades.
The third category was “Outcomes,” based on salary data reported to PayScale, the “market value” of skills as posted on LinkedIn and estimated by the Brookings Institution and the earnings of financial aid recipients (including those who have student loans) as reported on the Federal College Scorecard. They also considered the economic backgrounds of the students, the resources of the career centers and the percentage of alumni who told PayScale that their job “makes the world a better place.” This category is considering the short term of a recent graduate. In other words: Did s/he find work and graduate with as little debt as possible? It is also considering a longer term impact of their education. In other words: did the degree help for future income, whether or not the graduate went on for further education? However, this is different for different types of colleges. A school that grants most of its degrees in business and STEM will likely have higher incomes from its graduates than one that grants mainly liberal arts degrees for two reasons: the graduates of the first school are more likely to be hired by firms that can pay higher entry-level salaries; years later those graduates will earn more because they have more work experience.
What type of schools come out the winners in college rankings like these?
- Exceptionally selective and well-endowed private colleges;
- Top-performing state universities that have either reasonable in-state tuition and fees or good financial aid budgets or are based in states with generous scholarship programs; and,
- Public and private schools that have a business or STEM focus for most of their undergraduate degrees.
If I were looking at public schools that were located in the same state I might find this useful when working with a school counselor. For example, the College of New Jersey, the most selective public college in the state, ranked 94th while Rutgers-New Brunswick, the flagship state university, ranked 105th. I might look at the data between the schools closely if I were considering a major offered by both schools. If I was interested in engineering I might not even scroll down to 178 to find out that a graduate of the New Jersey Institute of Technology had higher Early Career Earnings than graduates of these two schools.
What are the consequences of over-relying on college rankings such as these?
It’s quite possible to sell your home state university short if you believe that the non-resident charges at a “higher ranked” school are worth the money.
Suppose, for example, you live in Maine and qualify for the most generous resident award for the University of Maine (ranked 185th). You can also get into the University of Connecticut (ranked 38th), the highest ranked New England-based state university, but you will not qualify for any scholarship assistance. You will need to pay out-of-state tuition. The difference between the Early Career Earnings for graduates of the two schools is only $4,000 in favor of Connecticut. If money is an issue for your family, why would you even consider Connecticut?
You’re more likely to look down on a liberal arts college, even if you want a liberal arts major.
However, a good career development office at a liberal arts college will have more expertise and time to work with students who have liberal arts majors than one that must also devote attention to majors in areas such as education, engineering and the health sciences. That could lead to a better entry-level position for a liberal arts graduate, and possibly a slightly higher starting salary.
It would be too easy to interpret salary information to mean that you “earn more money” or can find a “more meaningful job” if you choose one school over other similar schools.
For example, within Pennsylvania it is not unusual to find students choosing between Dickinson, Franklin & Marshall and Gettysburg. The Gettysburg graduate earns $2,500 more than graduates of the other two schools, and all three have excellent career centers. But is that $2,500 a reflection on the school and its career center and alumni? Maybe, but you can’t tell that from a published ranking alone. You have to investigate the academic programs you want more closely.
I know that people are looking for value in a college education and that college rankings always sell magazines. However, they should not be the “be-all, end-all” for any final college decision. The people who did the ranking did not need to live on campus or commute there on a daily basis. Real college students do.