Why President Obama’s Rankings Are a Good Place to Start

Douglas Paulin for The Chronicle

March 10, 2014

Part of my job involves traveling around the country talking to people who work at colleges. Lately, everyone has been asking, with a mix of puzzlement and exasperation, the same question: "Why on earth is the Obama administration trying to create a federal college-ranking system?"

The answer, I tell them, is not really about rankings, politics, Secretary of Education Arne Duncan, or President Obama per se. Rather, the rankings idea is the latest manifestation of a long-term change in the underlying relationship between the academy and the state.

In retrospect, the period from the early 1980s until 2001 was a golden age for American higher education. Because the economy was strong and recessions were mild, state governments were able to increase real spending per college student, even as health-care and prison costs exploded, and two million additional students enrolled in public institutions. Endowments at wealthy institutions rode the stock market to billions of dollars in gains. Compare a typical wealthy campus to photographs from 30 years ago, and you’ll see a profusion of new buildings, progress, and beautification.

Students flocked to campus because the labor market was reorganizing itself in a way that made college degrees essential to getting a good job. The college wage premium—the difference between typical earnings of college graduates and workers with only a high-school degree—rose sharply between the early 1980s and 2001. Economically, college became a better and better deal.

But the last decade has been different. Recovery from the 2001 recession was weak, and many colleges hadn’t yet gotten back above water financially when they were inundated by the 2008 economic tsunami. The wage premium hit a plateau in the early 2000s and is no longer growing as it once did.

Meanwhile, a series of numbers and ideas came together to paint a new and disturbing picture of American higher learning.

First, the Organization for Economic Cooperation and Development began releasing an annual report showing that most other industrialized countries were increasing the percentage of adults with a college degree much faster than was the United States. At the same time, new federal statistics revealed that graduation rates in some American colleges were abominably low—less than 30 percent in hundreds of cases.

This might have been explained away as a product of rigorous academic standards, colleges refusing to grant degrees to people who didn’t earn them. But then other studies arrived that directly contradicted that premise. A 2003 U.S. Department of Education survey found that many college graduates had only moderate or low literacy and numeracy skills, and Richard Arum and Josipa Roksa’s much-discussed 2011 book, Academically Adrift, found that "American higher education is characterized by limited or no learning for a large proportion of students." A 2013 OECD study found the average literacy levels of American college graduates below the average literacy level of that cohort in other nations.

And in nearly every case, the numbers for low-income, minority, and first-generation students looked even worse. For students at the margins of opportunity, college looked less like a path to prosperity than a minefield.

One could argue with any of the individual studies on methodological grounds. But the common themes among them were powerful, particularly given the lack of competing research reaching substantially different conclusions. Combined with evidence of grade inflation and declining student academic effort, the studies and statistics created a powerful narrative of inattention, stagnation, and decline, of a higher-education system that did not live up to its lofty global reputation.

This story dovetailed with the other, much louder public narrative of college unaffordability, driven by record sticker prices and mounting student debt. When outstanding student loans crossed the $1-trillion threshold, it had a catalytic effect on the national dialogue, calling the basic college-value proposition into question and positioning higher education, for the first time, as a potential enemy of American opportunity.

People get elected to high office by developing a fine sensitivity to such shifts in the way society understands itself. Spurred by polling numbers and their own political instincts, federal politicians across the ideological spectrum felt driven to do something about higher education. But what, exactly, to do?

Existing federal laws give the executive branch very little direct leverage over how colleges set prices, award degrees, and educate students. The Washington higher-education lobby wants to keep it that way and has formidable powers of dissuasion. A member of Congress proposing new regulations can expect to be inundated with angry phone calls from local college presidents and alumni, often before the ink on the offending language has dried.

So U.S. presidents and education secretaries are left to work with the tools they have. President George W. Bush’s secretary of education, Margaret Spellings, tried to conscript accreditors in carrying out her proposal to require colleges to disclose—this is still considered an outrage by many—actual evidence of student learning. The higher-education lobby went to Congress and neutered the secretary’s already-mild oversight over accreditation.

Obama is trying a different tack. Only Congress can make federal financial aid contingent on a college’s place on a federal ranking. But it can’t prevent the Department of Education from simply creating a new ranking and publishing it for the world to see. As U.S. News & World Report has demonstrated, rankings don’t need formal regulatory authority to be powerful. Their mere existence is enough to alter institutional reputations, administrative actions, and student choice.

So: President Obama has proposed a new federal college-ranking system because, like many politicians, he wants to do something meaningful about higher education, and a new ranking system is one of the small number of things he can do.

The rankings idea is simply the next in what will be a series of future attempts by federal lawmakers to herd, persuade, or force the nation’s unruly collection of diverse higher-education institutions toward something resembling a national higher-education policy. Each new iteration will include two irreducible elements: a theory of action, be it financial incentives, regulatory imperatives, or market choice, and a process of gathering information that can be used to judge the success of institutions or programs in contributing to national higher-education goals.

Rankings are, in this context, a pretty good place to start. The key for the Obama administration will be to acknowledge that the best and worst colleges can’t be found at opposite ends of the same rankings scale, and that the kinds of sanctions that enforce compliance with minimum standards aren’t the mirror image of the rewards that motivate outstanding performance. The best policy will combine tough-minded baseline expectations for loan repayment, graduation rates, and employment outcomes with an egalitarian vision of success that rewards institutions that help an academically and economically diverse student population get a great education, and a diploma, at a reasonable price.

The broader lesson for the academy is that this is only the beginning. Unless something happens to change the now-dominant narrative of escalating prices married to stagnant and subpar educational results, the next administration, regardless of party, will quickly come to the same conclusions, and act accordingly.

This can’t be fixed with a savvy PR campaign. Colleges can only escape the yoke of federal control by achieving dramatic and verifiable improvements in the value of the education they provide to students, in terms of both learning and price. Otherwise, expect more disconcerting ideas to come, and soon.

Kevin Carey is director of the education-policy program at the New America Foundation.