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ISSUE BRIEFRankings, InstitutionalBehavior, and Collegeand University ChoiceFraming the National Dialogue on Obama’sRatings PlanLorelle L. Espinosa,Jennifer R. Crandall,andMalika Tukibayeva
ISSUE BRIEFRankings, InstitutionalBehavior, and Collegeand University ChoiceFraming the National Dialogue on Obama’sRatings PlanLorelle L. EspinosaAssistant Vice President forPolicy Research and StrategyAmerican Council onEducation (ACE)Jennifer R. CrandallGraduate Research AssociateACEMalika TukibayevaGraduate Research AssociateACEMarch 2014
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AcknowledgmentsOn behalf of the American Council on Education (ACE) Center for Policy Research and Strategy (CPRS),the authors would like to thank Kevin Eagan, interim managing director of the University of California, LosAngeles (UCLA) Higher Education Research Institute for providing descriptive trend data on factors thatinfluence students’ choice of college or university. A special thank you to the many scholars, researchers,and other leading thinkers in the higher education space for their input and ideas on the U.S. Departmentof Education’s planned Postsecondary Institution Ratings System (PIRS). Thank you to Louis Soares, ACE’svice president for policy research and strategy; Terry W. Hartle, ACE’s senior vice president for governmentand public affairs; Corbin Campbell, assistant professor of higher education at Teachers College, ColumbiaUniversity (NY); and Nick Bowman, assistant professor of higher education and student affairs at BowlingGreen State University (OH), for their review and feedback on earlier drafts of this brief; to Mikyung Ryu,associate director of CPRS, for her insights and analysis of the data challenges facing the Department ofEducation in its execution of PIRS; and to Yang Hu, graduate research associate, and Christopher J. Nellum, senior policy analyst, both at CPRS, for their technical support.Rankings, Institutional Behavior, and College and University ChoiceFraming the National Dialogue on Obama’s Ratings Plan
About the American Council on EducationThe American Council on Education (ACE) is the nation’s most visible and influential higher educationassociation. We represent the presidents of U.S. accredited, degree-granting institutions, which include twoand four-year colleges, private and public universities, and nonprofit and for-profit entities. Our strengthlies in our loyal and diverse base of more than 1,800 member institutions, 75 percent of which have beenwith ACE for over 10 years. That loyalty stands as a testament to the value derived from membership. Weconvene representatives from all sectors to collectively tackle the toughest higher education challenges,with a focus on improving access and preparing every student to succeed.About the Higher Education Research InstituteThe Higher Education Research Institute (HERI) is based in the Graduate School of Education & Information Studies at the University of California, Los Angeles. Its Cooperative Institutional Research Program(CIRP) is a national longitudinal study of the American higher education system. It is regarded as the mostcomprehensive source of information on college students. Established in 1966 at ACE, CIRP is now thenation’s largest and oldest empirical study of higher education, involving data on some 1,900 institutions,over 15 million students, and more than 300,000 faculty. CIRP surveys have been administered by HERIsince 1973.Rankings, Institutional Behavior, and College and University ChoiceFraming the National Dialogue on Obama’s Ratings Plan
Table of ContentsIntroduction. 1Overview of President Obama’s Proposed Ratings Plan.3Data Challenges of the Proposed Plan.4Use and Misuse of Data.4Peer Groups and Formulas.5College and University Rankings and Their Implications.6The Rise of Rankings.6Utility and Implications of Rankings. 7Admissions Behavior and Institutional Selectivity.8Implications for Obama’s Proposed Ratings Plan.9How Do Students Choose Colleges and Universities?. 11The Role of Rankings in College and University Choice Making. 11Important Influences in College and University Choice Making.13Institutional Quality.17A Note on Two-Year Institutions and Choice.17Implications for Obama’s Proposed Ratings Plan.17Conclusion.19References.20Rankings, Institutional Behavior, and College and University ChoiceFraming the National Dialogue on Obama’s Ratings Plan
Introductionfocus to the performance of colleges and universiThe national narrative on higher education overties. Citing the simultaneous needs to equip morethe past many years has been squarely focused onAmericans with postsecondary degrees and to keepissues of affordability, quality, and accountability,higher education accessible, Obama’s second-termparticularly in the federal and state policy arenas.higher education agenda pays particular attentionDriving this dialogue are trends that show a steadyto affordability. Part of his plan is the proposedrise in tuition and fees across all sectors of higherPostsecondary Institution Ratings System (PIRS),education, persistent state disinvestment, andslated for development by the U.S. Department ofconcern over educational quality and workforceEducation for delivery in the 2015–16 academicpreparation by the public and employers alike.year. With an emphasis on ensuring “value,” theAccording to The College Board (2013a), over thedepartment has framed the tool as one that willlast 30 years, average tuition and fees at public andempower students and families to choose the bestprivate four-year institutions rose 231 percent andcollege or university for them, and plans to ask153 percent, respectively. Public two-year tuitionCongress to tie Title IV funds to institutional perand fees rose 164 percent during the same period.formance in PIRS.Students have borne the brunt of rising costs,contributing to trends inThe merits of Presidentstudent borrowing thatObama’s proposed ratingsMany in the higher educationshow a full 60 percentsystem have been vigorouslycommunity still believeof four-year college anddebated in Washington anduniversity graduatesthat the ratings schemeacross the country, with critowing 26,500 on averics pointing to data inaccuwill nonetheless becomeage (The College Boardracies and misuse, incorrecta de facto ranking, with2013b).focus on a simplistic form ofnegative consequences forcollege and university value,Running parallel to thisand potential consequencesstory of rising costs andthe very low-income and otherconcerning institutionalstudent debt are callsunderrepresented studentsbehavior in the years followfor quality assessmentwhomtheadministrationising its rollout. Also probwithin the walls oflooking to serve.lematic is the notion thatAmerica’s colleges andthe same tool can be useduniversities. While theboth to drive accountabilitybenefits of a postsecand offer consumer information when the informaondary degree are mostly well understood, particution needed by policymakers and students is verylarly in terms of lifetime earnings—65 percent moredifferent. Although the administration has triedfor college and university graduates than for thoseto quell fears that its plan will become yet anotherwith a high school diploma (Baum, Ma, and Payeacollege and university “ranking,” many in the2013, 20)—the quality of America’s higher educahigher education community still believe that thetion institutions has been called into question for aratings scheme will nonetheless become a de factonumber of reasons, including low graduation rates,ranking, with negative consequences for the veryrising student loan defaults, and research showinglow-income and other underrepresented studentsa critical lack of learning during the college yearswhom the administration is looking to serve.(Arum and Roksa 2010).With this backdrop in mind, President Obamahas turned his administration’s higher educationObama’s affordability agenda in general andproposed ratings plan in particular raise a numberRankings, Institutional Behavior, and College and University ChoiceFraming the National Dialogue on Obama’s Ratings Plan1
of important questions. Decades after the introduction of now-ubiquitous college and universityguidebooks and 30 years after U.S. News & WorldReport (USNWR) released its first controversialrankings—now called Best Colleges—just what dowe know about American higher education rankings, their use, and their outcomes? Also, what dowe know about how low-income students choosewhich college or university to attend? As will bediscussed here, the higher education rankingsenterprise has been shown to influence institutional decision making, and in many cases to further stratify America’s already hierarchical systemof higher education. There are a number of consequences to rankings-influenced decision making,some of which can be positive, but most of whichhave negative implications for low-income studentaccess to the nation’s top colleges and universities.Beyond this role of rankings in institutional decision making is their use by students and familiesin college and university choice making, or thelack thereof. Based on newly updated data from theHigher Education Research Institute (HERI)—rankings are not a driving factor in student decisions onwhich institution to attend, and are even less relevant for students from low-income backgrounds.More salient influences include family involvementand encouragement, peer and other networks, andschool- and higher education institution-basedresources, including those that are semi-customized. Our data and others’ show that for low-incomestudents, location and affordability are driving factors in college and university choice making. Theadministration’s focus on access and affordabilityare on target; however, the tools devised may proveill-suited for students most in need of information.Any rating is only as good as its data, which isanother area of concern discussed here. And anytools used by students—especially tools directedtoward families with limited sociocultural capitalor familiarity with higher education—need to befirmly rooted in solid data.Rankings, Institutional Behavior, and College and University ChoiceFraming the National Dialogue on Obama’s Ratings Plan2
Overview of President Obama’s Proposed Ratings PlanPresident Obama’s proposed higher education ratings plan is part of a larger set of initiatives—sometangible, some rhetorical—that the administrationhas rolled out in an attempt to empower studentsand families as they choose a college or university,and to put pressure on institutions to keep costslow, deliver a high-quality education, and graduatemore students. Akin to other tools available on theDepartment of Education’s College Affordabilityand Transparency Center website (collegecost.ed.gov), the ratings will be made available onlineand will be folded into the College Scorecard tool,a mechanism designed to assist students and families with their search process.The administration has cited a number of reasonsfor its focus on higher education affordability, notthe least of which are the doubling of tuition as ashare of public college and university revenuessince the 1990s, a 58 percent completion rate forfull-time students seeking four-year degrees, risingloan default rates, and burdensome student debt(White House 2013). The federal governmentspends a great deal of money each year—morethan 150 billion—on student financial aid. Giventhe budget realities facing Washington andan American public that wants government tospend its dollars wisely, policymakers and in thiscase the current administration are calling formore accountability on the part of colleges anduniversities.The Department of Education has specifically beencalled upon to create a federal ratings system withthe higher education “consumer” in mind: studentsand families. The plan’s rollout is slated to occurby the 2015–16 academic year and, according tothe Department of Education, will be based uponaccess, affordability, and outcome measures suchas the percentage of students receiving Pell Grants;average tuition, scholarships, and loan debt; transfer and graduation rates; graduate earnings; and1advanced degrees of graduates (U.S. Department ofEducation 2014b). Just how these points of information will be combined to form a cohesive ratingfor a given institution is not yet known, but thedepartment has said that it will group (i.e., compare) peer institutions with similar missions.The administration intends for this first steptoward providing more information for consumersto be followed by an attempt to tie aid to institutional performance, such that institutions servingstudents well (presumably those with high ratings)will receive a disproportionately greater amount ofaid via student grants and loans. This is envisionedto take place in 2018. In other words, studentsattending highly rated institutions will receivemore aid in the form of “larger Pell Grants andmore affordable student loans” (U.S. Department ofEducation 2014b) than those attending lower-ratedinstitutions. While the ratings plan can be accomplished in the short term by the Department ofEducation, tying aid to institutional performancewill require congressional action.Of the measures cited as likely for inclusion in theratings plan, most are already available for publicview on the department’s aforementioned CollegeAffordability and Transparency Center website.The College Scorecard provides net prices,1 graduation rates, loan default rates, and median borrowing estimates. It also provides changes in netprice (e.g., whether an institution’s price has risenor fallen over a period of years). And the CollegeAffordability and Transparency List tool provides amechanism for consumers to compare 1,878 institutions on a number of cost characteristics. Examplesinclude highest and lowest tuition and fees, netprice, and highest and lowest changes in thesecosts. Data not yet provided by the department, butnamed as likely measures for the ratings plan, aregraduate earnings, advanced degrees earned bygraduates, and alumni satisfaction.Net price is defined by the Department of Education as the average price of attendance paid by full-time, first-time students aftergrants and scholarships have been accounted for (U.S. Department of Education 2014a).Rankings, Institutional Behavior, and College and University ChoiceFraming the National Dialogue on Obama’s Ratings Plan3
Data Challenges of the Proposed Planthe data’s reliance on static forms of inputs andoutputs that fail to measure institutional quality orhow well a given institution is doing in educatingan often academically diverse student body.While there have been a number of criticisms ofthe proposed ratings plan, several of which arediscussed here, some of the most salient concernsAlso keeping in mind the Department of Educarest in the use and misuse of data to inform thetion’s planned use of graduation, retention, andplan’s measures. As stated in a letter submitted bydefault rates as cornerstone measures for PIRS,the American Council on Education (ACE) (Broadthere is an inaccurate and incomplete picture of2014, 2) on behalf of 23 other organizations repinstitutional performance in the department’s data.resenting higher education, there is “unanimousFirstly, graduation and retention rates characteragreement that any tool designed to be useful toize students who transfer from one institution tostudents and parents in their college search shouldanother as “dropouts,”be grounded in reliable andregardless of whether theyvalid data, and presented“Anytooldesignedtobeultimately completed awith the appropriate contextdegree. Second, in 2012,useful to students andto accurately reflect instituamong the roughly 4,500tional performance.” Cerparents in their collegeTitle IV participating institainly any tool used to informsearch should be grounded in tutions with undergraduateeducation policy must standreliable and valid data.”degree programs, six-yearup to the same standard.graduation rate and retenUse and Misuse of Datation rate data were notprovided for 475 and 126 institutions, respectively,The Department of Education will most likely drawand missing data elements are not evenly distribcompletion and retention data used for the prouted across all types of institutions.posed ratings from its own Integrated Postsecondary Education Data System (IPEDS). The limitationsof IPEDS, which is based on self-reported data frominstitutions, have been widely acknowledged anddeserve further discussion here. Most importantly,completion and retention rate data drawn fromIPEDS in particular reflect a narrow proportionof today’s student body, in that the system tracksonly first-time, full-time degre
Rankings Institutional ehavior and College and University Choice. Framing the National Dialogue on Obama’s Ratings Plan . Acknowledgments. On behalf of the American Council on Education (ACE) Center for Policy Research and Strategy (CPRS), the authors would like to thank Kevin Eagan, interim managing director of the University of California, Los
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