While President Obama’s new higher ed proposals have generated considerable commentary, much of it seems to be missing two key points.
The first is admittedly based on my reading of the proposal thus far, and I grant that the proposal is vague enough that you can read pretty much whatever you want into it. Most of the commentary compares the new ratings system to U.S. News & World Report, Forbes, and other popular college rankings. But the primary goal of those rankings is to inform consumers. If that is what Obama is proposing to do, we’ll just end up with another set of flawed rankings.
But that isn’t what I think Obama’s proposals are trying to accomplish. Rather, the rating system is geared to ensuring federal financial aid dollars are going primarily to those colleges that are accomplishing the goals that spurred the government to provide financial aid to begin with: promoting equality of opportunity, addressing students’ credit constraints, and providing subsidies for activities that have beneficial spillovers to society.
While consumers may value some of this information, the primary purpose of the plan is not consumer-oriented but rather to track and increase the effectiveness of federal spending and ensure colleges are held accountable. For example, most consumers could care less how many Pell students are at a particular college, which is why this isn’t a component of consumer-focused rankings. But the percentage of students receiving Pell grants is an important marker of a college’s effort and success in improving equality of opportunity, so it is a component of Obama’s proposed ratings system.
The second point is that we are not starting from a blank slate. Critics are focused on the problems with implementing the proposed rating system. They say it would be so inherently flawed that it shouldn’t be used to determine whether a college’s students can receive federal financial aid—and how much aid they can receive. But the fact is we already have systems in place to determine this. So the issue is not if there are problems with the proposed new ratings—of course there will be—but whether the proposed new ratings will be better than the existing system.
And given all the problems in our existing system, that’s not a high bar to clear.
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