Understanding the economics of a college degree lies somewhere between “huh?” and “GTFO” for many high-school students and their parents.
But by the time a few years have gone by, reality has a habit of biting. Some students find that higher education was a much bigger financial burden than they imagined, and drop out. Others find that the degree they received isn’t worth much in the job market, and end up drowning in student debt.
To help address these problems, the Obama administration is unveiling a new website, stocked with federal data to help applicants decide which colleges deserve their money. The data, sourced from federal tax and grant filings, allow students to examine four key indicators:
- the cost of attendance based on a family's income bracket
- what proportion of students graduate
- the amount of debt students typically take on
- how much graduates typically earn
Looking at any one of those metrics is useful; having them all in the same place, standardized, publicly available, for free, is unprecedented. The new data will be inserted into an existing tool called the College Scorecard, which will have a new look and be more user-friendly on mobile devices.
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“There are far too many students who feel overwhelmed by the amount of information out there,” Arne Duncan, the U.S. Secretary of Education, said in a conference call with reporters on Friday. “Students need to know if their investment, in resources and hard work, is going to pay off.”
The issue of student loans has become a huge talking point in the 2016 presidential race, as candidates try to get young voters in their court. On Monday, Duncan and President Obama will appear together at an event in Des Moines, Iowa, to hype the administration’s new tool.
Information provided by the White House and the Department of Education ahead of the official release highlighted some “exemplar” schools that do well by their students, including Georgia Tech as a four-year college and State Technical College of Missouri as a two-year. Those colleges have high completion rates, even as their students borrow relatively little money and end up with higher-than-average earnings.
State schools got good rankings, as did Ivy League schools like Harvard, Columbia and Princeton, though the Department of Education’s report noted that they accept too few needy students. For-profit schools did not fare well. The new tool will mark schools with "warning flags" if they're being monitored by the DOE for some reason.
There was some naming and shaming, too. New York University, which has been called to task by various media outlets for grandiose spending on dubious projects financed by high tuition, got low marks. So did the Golf Academy of America, whose graduates barely earn more than high school grads, 10 years out of school.
The report also threw shade at useless college rankings from outlets such as U.S. News and World Report and MONEY magazine. James Kvaal, deputy director of the White House Domestic Policy Council, called them “arbitrary rankings” that “are not useful for students who are trying to pick colleges.”
One advantage of the new College Scorecard is that it will allow students to compare schools side-by-side. For instance, at NYU, students in the lowest income bracket pay an average net price of $25,441 per year, compared with $8,086 per year at Columbia University. That higher tab doesn’t mean a student is more likely to graduate or to earn more: NYU’s completion rate is 84%, vs. 94% at Columbia, and NYU’s former students earn $58,800 a year, on average, a decade after entry, vs. $73,000 a year for former Columbia students.
I oversee Fusion's money section and have spent most of my time as a journalist writing about banks and finance. I live in Brooklyn with my partner Geoffrey & our two dogs, Captain & Tallulah. Favs: leopard print, Diet Coke, gummy candy, Ireland.