Should U.S. Colleges Be Graded by the Government?

The President wants to rate colleges to increase competition and cut student-loan debt. The campus backlash has begun. YES / NO / MAYBE

While the Administration hasn’t announced how it’ll go about determining ratings, schools across the country are clearly worried. Once the government imposes its promised tests to evaluate things like accessibility, affordability and student performance after graduation, chances are that small, pricey colleges like Lesley might not stack up well. After all, only about a quarter of Lesley University’s students are eligible for need-based federal aid, its tuition is $32,000 a year, and its graduation rate is just under 50%.

none of those numbers takes into account the national awards for teaching won by Lesley’s professors, the impressive off-campus internship program for students or the fact that the Lesley Lynx are the New England sports champions in soccer and softball.

Nearly 60% of college presidents doubt the rating plan will work, according to a December 2013 Gallup and Inside Higher Ed poll, and earlier this year, the head of every college and university in Wisconsin signed a letter expressing unified opposition to it. Public comments to the Department of Education on the issue have been overwhelmingly negative.

The problem, of course, is that the federal government is already in the college business–big-time. Congress currently earmarks about $150 billion every year to federal loans, grants and work-study programs for undergraduates, about four times more than it spends on K-12 education. Far too much of that money ends up going to subpar institutions with abysmal graduation rates that leave most of their students marooned–with either no degree or a worthless degree, few job prospects and a load of student debt. In an economy where real wages are stuck in the mud, American students are taking on ever larger loans, almost $30,000 each on average, and default rates are rising at an alarming pace, doubling to 10% over the past decade. “The status quo isn’t working”.

No one knows just what will happen next year when the Obama ratings go into effect. If the scheme succeeds as the President wants, it could remake the higher-education landscape, weeding out the weakest schools and forcing middling ones to improve.

When Obama announced the idea in August, he described it as a way to identify the schools with “the best value, so students and taxpayers get a bigger bang for their buck.” The rating system would make colleges more accountable in three ways: First, it would provide students with a quick, easy-to-use cheat sheet on which schools are the most affordable and produce the most successful graduates. Second, it would encourage institutions to compete against one another to get their ratings up. And third, Obama announced that he would seek congressional authorization to reduce financial aid to the lowest-ranked schools.

If this approach sounds familiar, that’s because it is. For more than a decade, federal funding for K-12 education has rewarded schools that meet federal benchmarks of achievement. Under President George W. Bush, the Centers for Medicare and Medicaid Services started a rating system for nursing homes in an effort to help Americans choose–and direct their federal dollars to–the higher-quality institutions. And states long ago began using metrics to track their own colleges and universities. As of this year, 25 states from New Mexico to Massachusetts require colleges to meet certain performance standards to receive extra financial aid.

It’s hard to miss the rich and unexpected irony in the fact that much of the American academic cosmos is resisting a President it almost universally supported through two elections. But Obama isn’t backing down yet. While he needs an act of Congress to tie the rating system to financial payments, he doesn’t need permission to create the system in the first place. And for now, the Department of Education is charging ahead.

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