The beginning of the end of higher education's special deal.

AuthorGlastris, Paul
PositionEditor's Note

This fall, the Obama administration will release the first draft of a plan to rate America's colleges and universities. When it does, all hell will break loose, because the ratings spell the beginning of the end of a special deal the higher education sector has long enjoyed.

The deal is this: Washington gives institutions of higher learning about $150 billion a year in the form of student aid, research grants, and various tax breaks. In return, those institutions promise the federal government ... nothing. Schools are under no obligation to demonstrate that they've spent that money effectively--by, say, keeping prices down, or increasing their graduation rates, or helping more lower-income students get degrees, or showing that any of their students have learned a damn thing. The money just flows, year after year, in ever-greater amounts.

The administration's new ratings, which are scheduled to go into effect in time for the 2015-16 school year, will be the first concrete step by Washington to demand some accountability for that investment. Individual colleges will be graded on measures of access (such as the percentage of Pell students they enroll), affordability (the net price of attendance), and outcome (graduation rates, loan default rates, and so on). Such metrics may seem familiar to longtime readers of the Washington Monthly, since we've been ranking schools that way for years in our annual college guide, which we proudly offer again in this issue. Our coverage begins on page 19.

But we're just one magazine. It's obviously a much bigger deal for the federal government to define the higher ed hierarchy in this way, so different from the conventional view, epitomized by the U.S. News & World Report, in which college status is based on reputation, money, and exclusivity. Like nutrition labeling or Energy Star ratings, the new federal college ratings, if done right, will give prospective students and their families better information with which to make their decisions. That, in turn, should put more market pressure on colleges and universities to deliver more value for the money.

There are a lot of colleges out there that won't look so good on such

a rating system. Some of them could be put out of business, especially if federal dollars are tied to the ratings, as the president would like to see Congress do (he can implement the rating system itself by executive action). Not surprisingly, the trade associations that represent colleges and...

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