In a recent speech at the University of Buffalo, President Obama announced a plan to make higher education more affordable. A cornerstone of this initiative is a new ratings system for colleges and universities that is tied to federal student aid. The administration will need Congressional approval to make the plan a reality, along with state cooperation to maximize its impact.
The administration hopes to publish the new rating system before the 2015-16 school year. The system, which will be created by the U.S. Department of Education (DOE), will compare institutions with similar missions, help students compare the institutions’ “value,” and encourage institutions to improve.
The ratings will be based on measures that include access (e.g., percentage of students receiving Pell grants), affordability (e.g., average tuition, scholarships, and loan debt), and outcomes (e.g., graduation and transfer rates, graduate earnings, and advanced degrees of graduates). The ratings will be published in the DOE’s College Scorecard, part of the department’s online College Affordability and Transparency Center.
The department plans to take about four years to refine the rating system. Then, the administration will seek legislation that uses the system to transform the way federal aid is awarded to colleges by 2018. Students may still attend the institution of their choice, but “taxpayer dollars will be steered toward high-performing colleges [and universities] that provide the best value.” Students attending institutions with high ratings could receive larger Pell grants and more affordable student loans. Additionally, the White House will challenge state governments to fund public colleges based on performance as well.
