Education Secretary: Colleges Need Grades Too

Arne Duncan previews Obama's plan for grading universities at TIME's Education Summit

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U.S. Secretary of Education Arne Duncan speaks at the TIME Summit On Higher Education Day 2 at the Time Warner Center on September 20, 2013 in New York City

In August, the Obama administration announced plans for a new college rating system to be implemented by the 2015 school year that would eventually determine federal funding for various institutions. “Colleges that keep their tuition down and are providing high quality education are the ones that are going to see their tax payer funding go up,” President Obama said in a speech outlining the plan at the University of New York at Buffalo. “It is time to stop subsidizing schools that are not producing good results.”

The rating system, the Administration hopes, will help students and parents figure out which colleges offer the best chance of graduating and the best value.

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The president’s Secretary of Education, Arne Duncan, discussed the plan with leaders in government and higher education at a TIME magazine summit on Friday.

The Administration’s objective is to make college more accessible and affordable for students from different backgrounds. Duncan hopes to address concerns that America’s college graduation rates have not kept pace with the rest of the world. “A generation ago, we led the world in college graduation rates,” he said, “now we are 12.” To succeed in America, it has become increasingly important to get a college degree. In an earlier panel, according to Governor Mary Fallin of Oklahoma, only 40% of jobs in America can be done with just a high school degree, and two thirds of those jobs pay an annual salary of $25,000 or less. Duncan said the jobs that once gave high school graduates a living wage are “not coming back.”

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That’s why the rating system, which has yet to be developed, will focus on helping the most needy students who are less likely to graduate from college. The system will look primary at “three performance buckets: access [to needy students], percentage of students getting Pell grants, and affordability,” Duncan said. It will measure these against outcomes like graduation rates, graduate earnings, and the number of graduates earning advanced degrees. Duncan declined to offer any specifics on how the Administration would consider post-graduate employment in their ratings. “Whether you choose Wall Street or the Peace Corps, do you have the skills you need to do what you want to do?,” he said.

The plan has been met with mixed reactions from members of the higher education community, some of whom are concerned that colleges could be penalized in the ratings for serving the most needy kids, the exact group that the rating system is designed to help. “Believe me,” said Duncan, “I’m aware if this is not done well, the college rating system could create unintended consequences. We are beginning this system with a sense of humility.” To ease concerns that the schools could be penalized for the difficult task of educating a larger share of disadvantaged students, Duncan said they would only compare colleges with similar missions, avoiding “apples to oranges” comparisons, and would weigh improvement in performance at various schools as carefully as absolute outcomes. “We’re more interested in where you are going then where you have been,” he said.

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“It is time to stop subsidizing schools that are not producing good results.”

This is the thinking in India too. If you subsidize good institutions, they can use it in two ways, 

1. Increase intake: This will not be done as the rating will go down as you have to go down in merit to select more students.
2. Use it to enhance quality; keep intake constant: That will lead to exclusivity and hence the Government's stated purpose gets defeated.

Only the second can happen. Hence subsidize institutions that are not producing good results to enhance incremental quality.


Terrible, terrible idea, Mr. President.  The federal government has no place regulating the tuition of universities/colleges.

For one thing, tuition is largely driven by outside, market-driven forces.  Those forces include cost of dormitories, technologies, talent (i.e. professors), facilities, cafeterias, and (importantly) comparative cost of similar-tiered universities.  Yet, the President does not even begin to acknowledge those financial burdens when he labels universities as, 'trying to keep out the riff-raff.'

Second, regarding the three pillars of the President's plan (access, affordability, Pell Grant percentage), focus on them is entirely misplaced.  Academic institutions are selective, and therefore will limit access to those students who truly earn their admission.  Due to the competitive forces mentioned above, 'affordability' is almost laughable as a criterion.  Lastly, Pell Grant percentage has nothing at all to do with the academic leanings and skills of the particular student.  That is the last thing universities are concerned about when it comes to building a student body.

Third, given the above, in order to become more accessible/affordable, universities would have to scale back their expenditures to lower tuition to the federally-prescribed level.  That would mean a decrease in investments that potential students (i.e. the free market) demand, and then a subsequent drop-off in enrollment.  Since universities also double as businesses, such a strategy would make zero sense, especially since admitting poorer students would result in a poorer future donor pool (off which many universities thrive).  That creates a Lose-Lose Situation for everyone involved.

Given the above, President Obama should take this idea back to the drawing board, before him and the government wreak harm upon academic institutions across the country.


@mrbomb13 Market forces have little if anything to do with Florida state college and university tuition. Florida's governor sets its state colleges and universities tuition rates. Dormitory costs should not be included in cost of education.

When THEY figure out how to determine a rating system, look to see how many large employers are in the region. The more large employers that pay living wages and benefits in the area, the higher the ratings will be for the regions colleges and universities. Employers make the colleges/universities and vice verso.


@tkulaga @mrbomb13

Actually, the Florida State Legislature sets the tuition, not just Rick Scott (Florida's Governor).  Please view the following Politico article on the subject:

Second, the cost of dormitories factors as a facilities expense, and should therefore be a factor in the University's budget.  If donations and sales of other items is not enough to off-set the expense, than tuition increase(s) is a logical and practical way to do so.  It's similar to a landlord enacting 10% annual increases in rent to keep pace with rising costs (i.e. taxes, utilities, etc.).

Third, the President's plan does not take into account the number/size of corporations surrounding particular institutions.  I'm not sure how you made that inference.

Fourth, the fact that major corporations surround certain universities does not necessarily mean that those universities are of high quality. 

Fifth, it is not the employers who make those institutions.  Moreover, it's the faculty, administration, and other staff that provide a 1) welcoming environment, and then 2) nurture learning/camaraderie amongst the student body.  Employers only weed out potential job applicants; it's the universities that prepare students for that 'weeding-out' process.


@tkulaga @mrbomb13 

Just a couple of comments:

1) Students may not need dormitories, but can you think of a single university that would not have them in ample supply (to at least fit the freshmen class)?  Dormitory space is a significant factor in  whether students attend certain institutions.

2) Did you read the Politico article I sent you above?  It clearly detailed how Scott has no control over the legislature.

3) Your statement about 'any major employer' drawing from designated academic institutions is far too broad to be credible.  Granted, Silicon Valley very likely does draw from MIT and Stanford (Harvard not so much).  However, Silicon Valley is not representative of the wide spectrum of industries out there.  Please provide further evidence to support your assertion.


@mrbomb13 @tkulaga Students do not need dormitories. Scott controls Florida legislators, and I disagree with your premise that employers do not make colleges and universities. Contact any major employer and the colleges universities they like to pick their new hires from in general.  Check for yourself as to how many grads from MIT Harvard and Stanford (for example) make it in the Silicon Valley as opposed to any other educational facility nationwide.


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