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College ratings from the Oval Office

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The Obama administration kicked off a series of public forums this week to talk about a proposed new rating system for colleges. The plan is light on details so far, but the basic idea is to grade colleges on things like value and affordability — and, ultimately, to force colleges to a better job.

Students shopping for colleges can turn to rankings from U.S. News & World Report or the Princeton Review. So why should the feds get in on the act? For starters, the federal government doles out more than $150 billion a year in student loans and grants, says Ben Miller, a policy analyst with the New America Foundation and a former education official in the Obama Administration.

“There’s a sense that the amount of money that’s being invested is not achieving the returns that the administration would like to see,” Miller says.

The proposed rating system would help students compare tuition, debt loads, and graduation rates.

“I always believe that more information is better than less,” says Richard Vedder, an economist with the Center for College Affordability and Productivity. His group does the college rankings for Forbes magazine.

“My great concern is that we don’t have very good measures of the kinds of things that the administration is interested in,” he says.

Like what students actually learn in college, how much they earn after they graduate — and even how many graduate, Vedder says. Federal graduation data ignores transfer students.

“As soon as a student transfers, that student is forever more a college dropout,” says Terry Hartle with the American Council on Education, a group representing colleges and universities. “But roughly 30 percent of college students now transfer from one institution to another.”

In its proposal the Obama administration says it will include transfer rates as a measure of success. The U.S. Department of Education is working to get better data on the completion rates of part-time students and students who transfer, says Miller.

“The data problem is ultimately a solvable problem in many respects,” he says.

The stakes are high. The plan aims to limit financial aid for colleges that don’t perform.

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