Grading Higher Education: Giving Consumers the Information They Need

Introduction and Summary —

A college degree bestows numerous benefits upon individuals and society, including higher earnings, a lower likelihood of unemployment, an increased tax base, and greater civic engagement. For many, postsecondary training is the gateway to a secure job, nice home, and good schools for their children.

The problem is that going to college is an expensive investment. The cost of four years of college can exceed $100,000, and over a quarter of four-year college students graduate with over $25,000 of student loan debt. Moreover, the college investment is a high-risk proposition. While the average return on a postsecondary credential is substantial, justifying the cost in most cases, there is no guarantee that a person will benefit. Only half of college entrants complete a bachelor’s degree and so many students forfeit the potential returns of such a degree.

At the same time, student needs are changing. A majority of those attending college are no longer the traditional students attending immediately after high school graduation who are reliant on their parents for support. Instead, many are working learners who are trying to gain a variety of college-level skills while balancing family and employment demands.

In addition to being a costly and uncertain endeavor, attending college also requires one to make a complicated set of decisions that must be done in the appropriate order and at the right times. These decisions include whether and how to prepare, where to apply, which institution to choose, and how to finance the costs. There are numerous resources to help students understand and improve their preparation for college, but there are far fewer tools or aids to help families navigate the college selection process.

Indeed, with little help families must sort through a complex menu of postsecondary institutions that differ in terms of level, sector, and focus as well as costs, admissions standards, and credentials and majors offered. Then they must put this information in perspective with their own personal situations and preferences.

Families must also discern differences in quality, or the likelihood that the school will impart learning, support student success, and result in future benefits. Such differences are hard to detect because measurements of quality in higher education tend to rely more on the characteristics of the entering student body rather than the value added by the higher education institution or the benefits realized by graduates. The difficulty in sorting colleges by characteristics and quality is compounded by complicated pricing structures, in which the net price each student pays often differs due to government and institutional financial aid.

In summary, the process of college choice involves simultaneously ranking options in multiple ways, relying on incomplete and uncertain information, and receiving little or no support for interpreting the facts that are available. These choices carry on throughout the enrollment experience as students must constantly reevaluate whether their enrollment decision is likely to pay off.