U.S. Department Releases Draft Framework of College Ratings Proposal

Today, the U.S. Department of Education released a Draft Framework of their College Ratings Proposal, which has been of much discussion and controversy for the past year and a half since its initial announcement. The proposal is a rough document, meant for feedback and comments, which focuses around 11 proposed metrics.

The following provides our initial summary of the Draft Framework. We’ll continue to monitor for updates as they become available, so stay tuned for additional insight and analysis from the Whiteboard team!

Overview

In August, 2013, President Obama announced that the Department of Education would create a higher education ratings system focused on access, affordability, and outcomes. On December 19th, 2014 the Department of Education issued a Draft Framework of the ratings system for public comment. Despite delays in the release of the Draft Framework, the Administration is still aiming to release a first version of the ratings system by the start of the fall 2015 academic year.

Goals of Rating System

  1. Develop a benchmarking tool for institutions around access, affordability and outcome measures.
  2. Increase transparency to allow for better decision making in college search and selection.
  3. Create a structure to align the ratings with federal financial aid.

How the Ratings System will Work

  • Eligible Institutions: The first version of the ratings will only look at four-year institutions (which grant a majority of bachelor’s degrees) and two-year institutions (which grant a majority of associate degrees).  Graduate-only and non-degree institutions will not be rated initially.
  • Ratings – Not Rankings: There will be a few categories with three performance levels: high performing, low performing and everyone else in the middle. No information has been provided on what the data thresholds will be, and the Department punted on the question of whether there will be one rating for an institution, or different ratings for each metric.
  • Potential Categories: Institutions will be rated separately based on characteristics, such as two-year and four-year, and also potentially selectivity and other institutional characteristics. It will also seek to adjust certain outcome measures based on student characteristics, such as age and income.
  • Encouraging Improvement: The rating system will seek to highlight institutions that are improving on the metrics.
  • Performance Over Time: The metrics will be take into account performance over multiple years, rather than just looking at one-year snapshot.

Initially Proposed Metrics

  • Access
    • Percentage of students receiving Pell grants
    • Expected Family Contribution Gap: The gap between expected family contribution (as indicated by the FAFSA) and what students actually pay (cost of attendance minus financial aid).
    • Family Income Quintiles: number of students from low and moderate income families.
    • Percentage of First-Generation Students
  • Affordability
    • Net Price: what a student actually pays (cost of attendance minus financial aid).
    • Net Price by Income Quintile: what a student actually pay by income class.
  • Performance (previously referred to as ‘Outcomes’ by the Department)
    • Completion Rates: The Department is set to expand the definition in 2017 beyond just measuring for first-time, full-time students.
      • Alternative Completion Rate: Rather than the traditional IPEDS measure, the Department is exploring using the National Student Loan Data System to look at completion measures for students receiving financial aid and a more immediate measure of part-time and transfer student completion rates.
      • Transfer Rates: The Department posed numerous questions in the framework about how this should be measured.
      • Labor Market Success: The most controversial metric by far on the list. The Department is proposing using a metric that would be a mix of short-term substantial employment after graduation and longer term median incomes of graduates.
      • Graduate School Attendance of Former Students
      • Loan Performance Outcomes: A metric to be determined that will examine whether or not students are able to repay their loans after graduation.

Feedback Sought from the Department

  • The Department is accepting comments on the proposed system through February 17, 2015. In addition to overall and specific feedback on the metrics, the Department is also interested in learning more about:
    • Existing College Ratings Tools: The Department is interested in learning more about and potentially integrating existing tools that can help parents and students make college decision and increase transparency, especially those that are user friendly.
    • Feedback from Consumers: What information would be most helpful to the people using the tool?