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Obama College Ratings Drive Wedge as State Schools Support

Aug. 19 (Bloomberg) -- Former President of Yale Benno Schmidt discusses the challenges in higher education and redefining the role of a college trustees. He speaks with Erik Schatzker and Alix Steel on “Market Makers.” (Source: Bloomberg)

State universities are backing President Barack Obama’s proposed scorecard for U.S. colleges in the hope it will steer more federal aid to them and away from underperforming for-profit institutions.

“Student aid won’t be around in 10 years if we don’t do something to distinguish the good guys from bad guys,” said King Alexander, president of Louisiana State University in Baton Rouge.

While a cross-section of college presidents have voiced opposition to the concept, leaders of some public schools are emerging as advocates. They say the measure will showcase the value they offer while stemming the distribution of federal loans and grants to so-called diploma mills that saddle students with debt and poor job prospects.

The Education Department is preparing to release a draft ratings plan this year and a final version next year that could bolster better-performing public colleges that charge less than their private counterparts. Federal officials say the scorecard will emphasize access, affordability and graduation rates, in contrast to rankings such as those from U.S. News & World Report that focus more on an institution’s selectivity and wealth.

More than half of the 50 states have already adopted or are exploring tying higher-education funding to similar performance benchmarks, rather than distributing aid based on enrollment, according to the National Conference of State Legislatures.

Source: Louisiana State University via Bloomberg

Louisiana State University President King Alexander said he has worked closely with the Education Department in the past, helping to craft a college scorecard that is a precursor to the ratings plan. Close

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Source: Louisiana State University via Bloomberg

Louisiana State University President King Alexander said he has worked closely with the Education Department in the past, helping to craft a college scorecard that is a precursor to the ratings plan.

Education’s Future

“They are more accustomed to having to demonstrate return on investment and are getting in front of the debate and shaping what measures will be used,” said Pauline Abernathy, a vice president at the Institute for College Access and Success, or TICAS, an Oakland, California-based advocacy group.

Student Debt: The Rising U.S. Burden

Underlying the support is a sense of urgency as state backing for higher education shrinks and for-profit schools take a larger slice of federal money. While for-profit colleges enroll 13 percent of students, they account for about a fifth of federal loans and almost half of student-loan defaults, according to TICAS.

Last year, President Obama proposed tying college ratings to the distribution of federal student aid, punishing schools that get poor grades, a step that would require Congressional approval.

‘Already Losing’

“They’re already losing under the current system, and they can only win under a reasonable rating system,” Mark Schneider, a vice president at the American Institutes for Research and a consultant for Money magazine’s college rankings, said regarding the state schools.

Noah Black, a spokesman for the Association of Private Sector Colleges and Universities, said his members welcome the education department’s effort to rank all schools. He said the group, which represents for-profit colleges, has also proposed a way to measure outcomes and performance.

“Since the metrics have not been set or disclosed, I am not sure how any sector of higher ed can be sure as to how they will fare or others will fare,” Black said in an e-mail.

Support for the plan has cropped up at a number of public universities. Nancy Zimpher, chancellor of the State University of New York, one of the largest public systems with 64 campuses, wrote in an online opinion for the New York Times in May that “there is great value in a ranking tool.” William ‘Brit’ Kirwan, the University of Maryland system’s chancellor, said a new rating system is “very needed.”

Political Support

There is also support among some lawmakers, particularly Senate Democrats who have been focusing on legislation aimed at relieving student debt. In February the Association of Public and Land Grant Universities proposed an alternative plan that included tightening the existing federal student-aid eligibility process to weed out abuse.

Still divisions exist among public universities and even supporters have been equivocal as they await details of the proposal that will attempt to score more than 5,000 institutions. The concerns echo opponents who say that available data is insufficient and that there are simply too many schools for a one-size-fits-all solution.

Janet Napolitano, who stepped down as secretary of the Department of Homeland Security last year to become president of the University of California system, voiced skepticism in a January letter to Education Secretary Arne Duncan.

“One must question the costs associated with devising yet another ratings system,” given the amount of information already available, she said in the letter.

‘Heavy Handed’

While the Education Department has good intentions, its methods can be “heavy handed,” said Terry Hartle, a senior vice president at the American Council on Education, a Washington-based group that represents about 1,800 institutions. For instance, rules intended to crack down on abusive marketing practices by for-profits resulted in red tape and new costs for all online education providers, he said.

“This is not the U.S. News & World Report,” Hartle said. “This is the U.S. Department of Education.”

The agency has held more than 80 meetings since the proposal was unveiled and is asking people “to have an open mind and give us their best thinking once we put a draft proposal on the table,” Deputy Undersecretary Jamienne Studley said in a phone interview.

Alexander, the president of LSU, has emerged as one of the most vocal proponents, hosting panels at national conferences while traveling to Washington to meet with legislators since the proposal was announced a year ago. He has worked closely with the Education Department in the past, he said, helping to craft a college scorecard that is a precursor to the ratings plan.

“The federal government has every right to inform students that their decisions are based on facts and outcomes,” Alexander said. “That’s been missing since the inception of federal student aid in 1965.”

To contact the reporter on this story: Michael McDonald in Boston at mmcdonald10@bloomberg.net

To contact the editors responsible for this story: Lisa Wolfson at lwolfson@bloomberg.net Chris Staiti

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