This past week, the US Department of Education launched a great overhaul to the College Scorecard. The new College Scorecard is extremely user friendly and visual. It allows you to easily find and investigate key metrics of universities and colleges. Through this scorecard, the Federal Government will provide clear, reliable, and open data on college affordability and value. The Federal Government wants the public to move away from the traditional higher education ranking system, which rewards excessive spending and rejection of students, and move towards a scorecard that focuses on graduating from school, finding good paying jobs, and highlighting student’s ability to pay off their loans.
From a college planning perspective, the scorecard provides you statistics reported from higher education institutions to the Federal Government. We have listed some great metrics represented in the scorecard below:
- Average Annual Cost
- Students Paying Down Their Debt
- Typical Total Debt
- Graduation Rate
- Students Who Return After Their First Year
- Salary After Attending
- Percentage Earning Above High School Grad
- Undergraduate Student Body Size
- Racial and Ethnic Statistics
- SAT and ACT Scores
- Popular Programs at the School
With every statistic there are always caveats. In the name of complete transparency and continuous improvement, we wanted to highlight some of the gaps and provide some metrics we would want to see the Federal Government provide to parents and students:
Graduation Rate: The number says that if you go to a 2-year degree program and graduate within 4 years or a 4-year degree program and graduate within 6 years, then you still count as graduated.
The metric that should be used is the on-time graduate rate from a 2-year and 4-year higher education institution because the biggest cost driver for student debt is not graduating on time. For example, according to the Texas State Government, if we use the Federal Government’s statistic for graduation rate at Texas 4-Year Public Bachelor’s Flagship program (such at UT at Austin or A&M) it would be 78.1% of students graduate within 6 years. If we use EDUsquared’s proposed on-time graduate rate statistic, then it drops dramatically to 45.2%.
Salary After Attending: This number shows the median earnings of former students who received federal aid after 10 years. The issue with this statistic is the average student debt is over $30,000 to $35,000 and former student’s starting salaries could be lower. People don’t have 10 years to make more than the student debt they have outstanding.
The metric that should be used is the average first year salary of a former student or even better the average first year salary of a former student graduating with a given major, so that the future students know what earning power they could have from a given school or major.
Students Paying Down Their Debt: This number shows the percentage of students that have paid at least $1 of their principal balance with 3 years for only Federal Loans.
The metric should incorporate private loans to give students and parents a complete picture. In addition, the metric should show the percentage of students that have paid at least a minimum of 10% of their principal balance after 3 years. Another metric could be the percentage of students that completely paid off their student loans after 10 years.
Typical Total Debt This number shows the median federal debt of undergraduate borrowers who complete college. It leaves out borrowers who didn’t complete college, private student loans, and Parent PLUS Loans. We think the Federal Government should have called it the Typical Total Federal Debt statistic.
The metric that should be used is the median total debt across federal, state, and private loans for undergraduate borrowers who complete that college, so that students have an accurate picture of the total debt that they could incur by graduation.
The Federal Government’s College Scorecard has come a long way since it first launched and we are excited to see where the Department of Education is going to take it next.