3 things to know about the Obama administration's new plan to rate colleges

Last year, the Obama administration announced that it would create a college rating system designed to help students figure out which schools are actually worth the investment.

Now, we’re finally getting a look at what that rating system for the 2015-6 school year might look like. It’s still in first draft, and will likely change after the public have their say. But here are three things to know about how the government wants to rate colleges:

1. Only some schools will be rated

The Education Department will include colleges and universities that award associate’s degrees, bachelor’s degrees and above. That means schools that do not offer degrees, including some vocational or training programs, will be left out. Schools that only offer graduate degrees also will not be included.

2. Schools won’t be rated 1, 2, 3 and so forth

The administration has been adamant the ratings system is not a numerical ranking of schools, the way the U.S. News and World Report compares universities. Instead, the categories will be broader: high-performing, low-performing and schools in the middle.

The administration has also been receptive to concerns that not all schools are comparable. At a minimum, four-year institutions and two-year institutions will be rated apart.. The department may also break schools into more specific groups – say by program offering – but has not said what those groups might look like.

3. The Education Department is considering a broad range of metrics

Obama has said he wants to reward schools that do a good job of educating minority and low-income students, who make up a growing percentage of all college students. He also wants to recognize schools that improve. With those big picture ideas in mind, the department is considering a wide variety of measures to rate schools on access, affordability and outcome.

Access

Measuring the percentage of Pell Grant recipients, how much the average family is expected to contribute to their child’s education, and family income would provide an idea of how many low-income students a school serves. Calculating the percentage of students who are the first in their families to attend college would also help determine which schools serve underrepresented communities.

Affordability

The department is considering measuring average net price, which is how much a school costs after accounting for federal, state and school grant aid. The figure would provide a better idea of what a student must actually pay than the tuition and fees that are typically published now. The department might drill down even more and publish the net price, or the average price students from various income ranges typically pay.

Outcome

Right now, many students don’t have access to good information on which schools graduate students who are able to find gainful employment. Ultimately, Obama would like to tie how much federal aid a school receives to how well it performs on things like job placement and graduation rates. That will take an act of Congress, which is unlikely anytime soon. In the meantime, the department is considering using completion rates and transfer rates, as well as employment rates, earnings and graduate school attendance rates.

The challenge is that some of the data is incomplete. For instance, completion rates only include students who enroll full-time for the first-time, meaning part-time students or students who dropped out but returned, are not included. Also, determining short- and long-term employment rates is difficult and the department is remaining mum on how exactly they might calculate those measures.

Another, easier-to-calculate measure the department is considering using is what percentage of students repay their loans on time, which would also provide some indication of which schools graduate students who are able to find jobs.

What does this all mean?

Ultimately, this is a very rough draft of the rating plan and we won’t know until next year what the final product actually looks like. While the department has said it will try to be fair to schools who serve more challenging students, the plan should worry schools who are more intent on benefiting from the financial aid and tuition money students bring in than providing a quality education, which is good news for consumers, specifically students.

We don’t know yet how many students will utilize the rating system in making their college decision or how easy it will be to navigate, but this first glimpse is likely to be a welcome starting point for students who find traditional college rankings lacking.

Emily DeRuy is a Washington, D.C.-based associate editor, covering education, reproductive rights, and inequality. A San Francisco native, she enjoys Giants baseball and misses Philz terribly.