On February 12, 2013, President Obama provided Congress his latest assessment of the State-of-the Union. In his address, he briefly discussed education ranging from pre-school to Higher Education.
When it came to Higher Education, the President made two major points:
- Higher Education makes it more likely that one will be employed and that one will have a chance to join the middle class.
- College affordability and value added are important.
Economic data have consistently revealed that educational attainment has a positive impact both on employment and earnings. Employment data show that those who have earned Bachelor’s degrees or higher have a persistently lower and more stable unemployment rate than those who have not attained such degrees.
During the fourth quarter of 2012, median weekly earnings for workers having a Bachelor’s degree were 66% above those who had only a high school diploma and 42% above those who had some exposure to college or had received an associate degree. Five years ago, workers with a Bachelor’s degree earned 63% more than those who had only a high school diploma and 42% more than those who had attended some college or had an associate degree.
In his speech, the President asked Congress to revise the Higher Education Act “so that affordability and value are included in determining which colleges receive certain types of federal aid.” Such a change would likely have broad implications in terms of college funding, accreditation reviews, and assessment.
The President also announced that his Administration would begin publishing a “College Scorecard” that could be used to compare institutions of Higher Education “based on…where you can get the most bang for your educational buck.”
The Scorecards contain the following information for each institution:
- The annual net cost of attendance and the 2-year change in that cost. The net cost is the price students pay after grants and scholarships are deducted from a college’s cost of attendance.
- The six-year graduation rate for first-time, full-time undergraduate students and the percentage of students who transferred to another institution. Graduation rates are ranked “low” (below a 40% six-year graduation rate), “medium” (40%-60% six-year rate), and “high” (above a 60% six-year graduation rate).
- The college loan default rate for a college’s students in comparison with the national college loan default rate.
- The median borrowing for the families of a student attending a given institution and the monthly repayment amount for that loan over a 10-year period.
- A link to information concerning the kind of jobs a college’s students can obtain upon graduating.
For Lehman College, the College Scorecard reports an annual cost of $3,671 per year. It notes that the average price has declined 0.4% from 2007 to 2009. The College’s six-year graduation rate is listed at 40.4% and it is noted that 24.6% of Lehman students transferred to another institution. The loan default rate for Lehman students was 5.5% vs. the national average of 13.4%. It was estimated that the families of Lehman’s students receive a median figure of $8,000 in federal loans. The monthly payments for that borrowing amount to $92.06 over ten years.
The Scorecard has limitations. Some limitations include:
- The cost data is somewhat dated (2009 figures). It does not reflect current costs.
- The six-year graduation rate for first-time, full-time undergraduate students may not adequately represent a college’s overall performance in graduating students. At some institutions, transfer students represent a significant, even majority, share of incoming undergraduates. According to the fall 2011 edition of the Lehman College Data Book, 608 first-time full-time freshmen enrolled at Lehman College and 981 full-time transfer students entered into undergraduate programs. Put another way, transfer students accounted for 62% of new full-time undergraduate students at Lehman College in fall 2011.
- The median borrowing data might be dated and it only covers federal loans.
- The employment data is not specific to each institution. Instead, one must research a college’s programs and use the “My Next Move” site to search or browse possible careers. A degree in a given field does not necessarily mean that all students are entering such a field. The data also does not reflect efforts of college placement offices to prepare students for entry into the professional field.
- The scorecards provide no specific information on post-graduate outcomes including estimated lifetime earnings, employment, or attainment of advanced degrees.
In the end, the President’s address reaffirmed the importance of Higher Education. It also underscored a growing policy emphasis toward college performance and outcomes. The College Scorecard is a step in that direction.