In Talk to Governors, Bill Gates Says Public Colleges Should Prove They’re Effective

States should hold their public colleges and universities more accountable for their performance, Bill Gates, the former Microsoft chairman, said in a speech at the National Governors Association’s winter meeting here on Monday afternoon.

The billionaire software tycoon, who has taken an active interest in reforming public education since retiring in 2008 to focus on philanthropic work, said states should consider basing their support for public colleges and universities on performance measures—including graduation rates for students and income and employment rates for recent graduates.

And states should collect better statistics on those measures, he said.

A lack of data on graduation rates and how graduates fare in the labor market, he said, makes it difficult to tell which institutions are adequately preparing their students for life after graduation, and which aren’t.

“Is there any criteria under which state funding would favor those that have the higher graduation rates over the ones that don’t—particularly in times when our budgets are tight?” he said. “I’m not saying that’s an easy [decision], but if we can get good measures, at least the data will be there for people to be able to decide that.”

Mr. Gates briefly alluded to the debate over for-profit colleges and proposed rules that would eliminate federal funds for programs whose graduates have low employment rates and incomes. He said that the debate should be expanded to include nonprofit and public institutions as well.

“Those same types of questions, about outcomes and effectiveness, really should be asked of the whole higher-education sector,” he said.