Obama Wants Parents to Know How Much Kids Will Earn Post College.

http://www.bloomberg.com/news/2014-12-19/obama-wants-parents-to-know-how-much-kids-will-earn-post-college.html

Families could steer their children toward colleges churning out graduates who make a good living 10 years after graduation, according to an Obama administration proposal for a new higher-education rating system.

The ratings may also favor schools where diplomas lead recent grads to jobs with salaries sufficient to cover living costs and repay student loans. A draft plan, being released today, aims to measure affordability and value at more than 5,000 U.S. colleges.

To rein in spiraling college costs, the Education Department wants to give consumers information so they can shop for college the way they do for cars and refrigerators. By 2018, Obama has said he wants to tie the ratings to the $150 billion annually the government spends on grants and loans, rewarding the most cost-effective institutions. Such a move would require congressional approval.

“We’re trying to focus the debate,” Education Undersecretary Ted Mitchell said in an interview inWashington. “We are far less interested in fine gradation than we are in identifying very high performers and very low performers.”

The agency is seeking comments on its proposal by mid-February and will release actual ratings ahead of the 2015-2016 academic year, Mitchell said.

Alternative System

The government is trying to provide an alternative to current ranking systems, such as U.S. News & World Report, which focuses on measures such as how selective colleges are and how much they spend per student. Obama first announced the plan to rate colleges in August 2013.

“I applaud the administration for working with colleges and universities to shape these ratings in a way that will be most helpful to the most students,” Michael Crow, president of Arizona State University, said in a statement. He said the ranking system might “change the culture of higher education.”

Many college leaders have voiced concern that any government rating could be unfair as it compares institutions with a variety of missions. They don’t want to be penalized when alumni pursue graduate school or take jobs in low-paying fields such as teaching and social work.

The Education Department had pushed back the release of a draft from the spring as it grappled with the complexity of creating it. It has held 160 meetings attended by more than 9,000 people, Deputy Undersecretary Jamienne Studley said in an interview.

To address colleges’ concerns, the agency is proposing that it compare only similar schools, so a community college wouldn’t be stacked up against Harvard University. The department still hasn’t decided whether schools will have one overall rating or multiple ones based on access, affordability and outcomes, Mitchell said.

Income Tracking

The proposal to track income would spark the most interest from consumers. The department is proposing tracking job outcomes over two time periods. It could determine measures -- such as a multiple of minimum wage -- that would enable recent graduates to pay their bills and student loans, Mitchell said. A second period would measure graduates’ earnings 10 years after graduation, when their income would likely be more “stable and predictable,” he said.

The administration also suggested favoring colleges that educate more low-income students, or those receiving Pell grants. Those who expect families with moderate or low incomes to pay lower tuition would be rated more highly, as well. Colleges would also get points if more of their students complete their studies and repay their student loans. The agency would give credit for schools serving students who might be expected to struggle in college. Much of that information is already available on the Department’s College Navigator site.

High school students and their parents toured the Boston University campus as they start to make choices in what college they might attend.

Students are reflected in a pool of water as they walk on the Purdue Mall on the campus of Purdue University in West Lafayette, Indiana, U.S. Many college leaders have voiced concern that any government rating could be unfair as it compares institutions with a variety of missions.