Obama’s Rating System: an International Perspective

As an observer of global university rankings, I’ve followed the debate about President Obama’s proposed college-ratings system with great interest—and growing incredulity.

From a distance, the concerns about the plan are curious. While some are certainly valid, I wonder how American colleges did not try to create a system of their own, or at least to work with the government to establish one.

Efforts to compare colleges have become an increasingly influential factor in higher education since the mid-1980s. U.S. News & World Report initially identified the national interest, and two decades later, the Academic Ranking of World Universities recognized similar opportunities on a global stage.

The popularity of such rankings dumbfounds critics, who focus primarily on their methodological failings. But like them or not, we in academe have to admit that they have filled an information deficit and challenged perceptions of quality. They have sought to meet a growing global desire to better understand colleges and what they offer students.

Mounting concern about affordability, quality, and value in higher education has resulted in a proliferation in the range and number of players developing instruments to measure and assess quality. The European Commission will soon launch its own ranking system, U-Multirank. The Organisation of Economic Cooperation and Development, or OECD, has tested its Assessment of Higher Education Learning Outcomes, admittedly to mixed reviews.

It is in this context that the U.S. government’s effort should be seen. The president wants to link federal student loans to affordability and student performance.

While it is true that graduation rates do not tell the whole story about educational quality, they do tell us something. Despite spending 2.8 percent of its GDP on tertiary education, which is way above the OECD average of 1.6 percent and more than every other country, American student performance is falling behind. Many countries now surpass the United States in the percentage of 25- to 34-year-olds with bachelor’s degrees. Those countries include Ireland, which despite experiencing a decline of over 20 percent in funding for higher education since 2008, is ranked 5th in completion rates by the OECD, compared with the United States, which is in 12th place.

Given the relatively poor performance of American higher education, it is not surprising that the federal government is using money to drive change.

In doing so, it is following the pattern being adopted elsewhere. Performance-based funding is now commonplace in many countries. In Ireland, for example, almost all higher-education institutions must agree to targets with the Higher Education Authority in return for funds. Similar arrangements are in place in Denmark, Germany, the Netherlands, Italy, Portugal, and Sweden, among other countries. Colleges’ failure to meet the goals means loss of income.

Many governments, notably those in Australia and Britain, put institutional data online for easy access and comparison. Over time, the European Union will be able to provide a similar service by assembling institutional data into a single database. Eventually social-media sites are likely to develop a TripAdvisor-like service for higher education, operating beyond the influence of governments or universities.

Some people may argue that in Europe, where students don’t usually pay tuition fees, and the government is the primary funder, such intervention is not surprising. But let’s not forget that the U.S. government spends more than $140-billion in grants and loans for students.

What surprises me about the U.S. debate is that it has taken the government so long to introduce its plan. There were early signs. The Spellings report was quite explicit about the importance of quality and of measuring performance. One of its most controversial proposals was for a federally managed data system to record student progress. Colleges strongly criticized the report, leading to its ideas’ being largely dismissed. But by winning that battle, did colleges lose the war?

Seen in a global perspective, Obama’s proposition for a ratings system is nothing new. It is simply further recognition of higher education’s importance to creating competitive advantage for nations and for graduates. After all, the public and students have a right to know that their tax dollars and tuition fees are likely to lead to better outcomes for society and themselves.

The proposal also demonstrates the extent to which higher education has lost its role as the primary guardian of quality. Higher education, it seems, has become too important to leave to higher education to regulate.

What is to be done? American colleges can complain and fight what is very likely an inevitable trend. Or, to paraphrase President Lyndon Johnson, they can get inside the tent and begin to influence how the ratings are developed.

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