Managing Finances

Scoring the College Scorecard

By Robin Noble

With the unveiling of CollegeScorecard.ed.gov in September, the U.S. Department of Education has officially joined the ranks of college “value” umpires.

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It’s a crowded field. More than 25 major groups rank or review colleges in one way or another. By now, parents of high school juniors and seniors are familiar with lists and guides by Forbes Magazine, Fiske, The Princeton Review, US News & World Report, Payscale and many others.

We are familiar because we often serve as judges in the elimination round of college list making. Our students start with broad ideas of where they want to go and parents, as primary financiers, help pare the lists down.

I wondered what insights the government’s College Scorecard might offer that can’t be found anywhere else. Here’s what I discovered.

An attempt at charting value

President Obama wanted to create a resource for potential college “consumers” that correlates cost with value. The resulting website presents three key data points on nearly every two- and four-year U.S. institution of higher education: average annual costs, graduation rates, and salaries after 10 years. College Scorecard allows users to consider these three data points against national averages and draw their own conclusions.

The presentation — three simple columns — is clean and colorful, but the simplicity is misleading. As the parent of a student in the big-bubble middle space, I found the information on value that’s available through Scorecard to be extremely limited.

Winner and losers are easily revealed

The College Scorecard may help most by exposing losers: pricey schools that do poorly by students graduation- and job-wise.

These schools tend to disserve low-income and under-performing students most, inviting their applications, admitting those who can pay regardless of their ability to graduate, and ultimately saddling them with big debt and dim employment prospects.

Take Platt College-Aurora, a small nursing school in Colorado. College Scorecard quickly tells you all you need to know. This is an expensive school with low graduation rates and less-than-national-average salaries.

Now take Princeton University. Princeton’s costs are low compared with the national average (because it is able to offer generous need-based financial aid), its graduation rate nears 100%, and its 10-year salary mark is way above the national average.College Scorecard comparison

Unfortunately for many parents, the metrics reveal more of the same on the usual suspects. Even when Scorecard takes a leap and draws some conclusions (e.g., 23 four year schools with low costs that lead to high incomes), surprise surprise! It’s the same nearly unattainable frontrunners we see on every other list.

Value distinctions between more typical colleges (state universities and respected but attainable private schools) are less apparent with Scorecard’s format. It would help a lot if you could make side-by-side comparisons of different schools, but currently that capability doesn’t exist on the site.

Back to that big bubble

For families in the middle (moderate incomes and students at neither the very high or low end of the academic spectrum; i.e., most of us), Scorecard’s information can be less than helpful.

story-icon-bar-convo-3When you’re on CollegeScorecard.ed.gov, you can find out more about a specific school (Costs, Financial Aid & Debt, Graduation & Retention, etc.) by clicking “View More Details” underneath the main display of green, purple and blue columns.

That’s partly because Scorecard’s cost data is drawn from the National Student Loan Data System. The “average annual cost” only includes students who received federal financial aid and is based on the net price these aid recipients paid after aid from the school, state and/or federal government was factored in.

If your family doesn’t qualify for aid, your net price will be much higher than the averages presented. For instance, the Scorecard says that the University of Denver’s average annual cost is $29,362. DU’s list price for 2015-2016 tuition and fees is $44,178 (this doesn’t include room and board), and when I completed DU’s Net Price Calculator, sure enough, I found that for my student the school’s costs would be much higher than Scorecard’s average. Merit aid could drive that number lower, but she will have to apply and be accepted to know what her true cost will be.

Payback time

The Department of Education knows that families are more concerned than ever with outcomes; is the degree worth it? So Scorecard includes a “Salary After Attending” data point. It’s important to note, though, that this is “the median earnings of former students who received federal financial aid, at 10 years after entering the school.” Students who received federal financial aid but didn’t earn a degree are included; students who did not receive federal financial aid are not included.

Can you see where I’m going with this? Only a subset of graduates is represented in this statistic, and it may be a small one depending on how many federal aid recipients a school enrolls.

The elusive search for meaning

To the eight great unanswerable philosophical questions, I would add a ninth: Will humanity ever agree on how to size up schools on paper? Except for the truly great and atrocious outliers, there is no rankings list that can do the trick, and College Scorecard is no exception.

Harder work is required of individual parents and students to define their version of value, delve into the data, and find what they are seeking.

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