This week the Department of Education unveiled the College Scorecard, a site designed to help prospective students evaluate schools.
According to President Obama:
“Americans will now have access to reliable data on every institution of higher education. You’ll be able to see how much each school’s graduates earn, how much debt they graduate with, and what percentage of a school’s students can pay back their loans – which will help all of us see which schools do the best job of preparing America for success.”
The President has clearly set very lofty goals for College Scorecard. He has also made an effort to point at that it is still a work in progress. That being said, it is a somewhat useful tool from day one, and hopefully in the future it will grow into a more useful resource. Sadly, there is also a major issue with the College Scorecard that cannot be ignored.
What we love: For-Profit Accountability
The College Scorecard, perhaps better than any other site, clearly articulates the issues associated with many of the for-profit schools. For years, higher education experts have pointed out how little value students at these schools get compared to community colleges and state schools. The problem has always been that the huge advertising budget and aggressive recruitment campaigns drowned out the voices of concern.
As an example, suppose your child brought home a brochure from the Art Institute of Pittsburgh. They might be so excited about the school that the wisdom or concerns of mom or dad go out that window. In the past there was little hard data available to make an informed judgment about a particular school. Today, anyone researching higher education options can just go to College Scorecard and get an objective assessment on the Art Institute of Pittsburgh. The numbers are harsh: only 11% of the students graduate, and those that do are left with on average over $40,000 in debt, yet salaries are significantly below average for former students. This data makes a family discussion about college much easier.
College Scorecard probably won’t be the end of the for-profit colleges, but it is a huge step forward in accountability. The more informed consumers are, the better decisions they can make. If schools charge outrageous amounts of money for an education that isn’t up to par, it will now be readily available information.
What we don’t like: Majors should matter
Many large universities offer a wide assortment of majors. Some of these schools have excellent programs in one area, but sub par programs in others. This nuance is completely lost in the College Scorecard. An English major may think they are getting great value at a particular school, but the reality could be that the salary numbers are skewed upwards because of a large engineering department. Similarly, a school with a great computer science program could easily get lost in the shuffle on account of the many students that pick less lucrative majors.
Breaking down the data by school was certainly a huge undertaking by the Department of Education, and asking them to break things down by major is a huge request, but this data is critical. At the very least, for large universities, data could be broken down by each college.
Being smart about picking a school is a huge step forward in the battle to reign in student debt, but being smart about major selection could be another step forward. For now, it is a missed opportunity.
That being said, there is a glaring problem with the College Scorecard that should be addressed as soon as possible…
What we hate: Student loan debt information is misleading
Each school has a listing for typical loan debt and typical loan payments at graduation. In fact, the heading for loan debt calls it “Typical Total Debt”. The problem is that it isn’t. It is typical total federal debt, not including Parent PLUS loans. The same can be said for the typical monthly payment figure.
Many of the more overpriced schools depend upon parents to take out PLUS loans and students to take out large private loans. Not only is this critical data missing from the college scorecard, but unless you read the fine print, one would reasonably assume that it was included within the “Typical Total Debt” figure. This gap in data could steer people towards significantly overpriced schools and send students in with unreasonable expectations about what their future debt obligations will be.
Obtaining more complete information should not be that difficult. If the government can reasonably collect data about former students income ten years later, then they should certainly be able to access data about student debt as well. At the very least, the government should have very accurate information about the Parent PLUS loans issued by the federal government.
The Department of Education should immediately make the parameters of the debt statistics more clear, and in the future, they should seek to include Parent PLUS debt as well as private loan debt.
The Bottom Line
Comparing schools has never been easy. With the creation of the College Scorecard, the Obama administration made a huge step forward. We would like to see more detailed information on majors, but for now the school information is a great start.
Unfortunately, the lack of clarity and information about student loans makes the current arrangement of debt information fairly misleading. Because of this huge shortcoming, this exciting new website gets a C+ from us.