Making Sense of the College Scorecard

Last week the Department of Education introduced a new College Scorecard designed to provide better insight on how well colleges are serving their students when it comes to access, affordability and outcomes post graduation.  

With nearly 2,000 data points for 7,000+ schools in the underlying database, there's a lot of information covered—some useful, some a bit outdated.  We've taken a closer look and summarized our findings for you. Long story short, for those receiving financial aid, we think it's a great way to assess the financial return on investment in a college education.  We also think it's going to be useful for identifying schools that are particularly strong in providing access to students from lower income families.

Click on Continue Reading for our summary.

What is it?

• The College Scorecard (www.collegescorecard.ed.gov) is a website produced by the Department of Education that enables the public to evaluate access, affordability and outcome data for over 7,000 higher education institutions.   

Why is it important?

• The College Scorecard data set captures useful performance metrics.  The data set tracks information related to access, affordability and return that can be used to assess the attractiveness of schools under consideration.

• The data set is massive in both scale and detail.  With nearly 2,000 data points for over 7,000 institutions—including community colleges and two year institutions—the data set dwarfs anything else currently available.

• The data set is about as authoritative as you can get.  Student loan repayment rates are collected from the National Student Loan Data System and post-graduation income figures are gathered from the Internal Revenue Service.  So there's no "self-reporting" bias inherent in alternative sources like PayScale.  It's not perfect (see caveats below), but it's better along these dimensions than anything else we're aware of.

What's covered?

In addition to some basic admissions information, the College Scorecard data set features information on:

• Post-school earnings.  Earnings figures are provided for years 6-10 after entering college. This is sourced directly from the Internal Revenue Service/Department of the Treasury. 

• Net price.  The net price (total cost of attendance less federal, state, local or institutional aid) is tracked for each school and also broken down by family income and institution type. This information is provided by the Integrated Postsecondary Education Data System (IPEDS).

• Completion rates.  Completion (aka graduation) rates are also provided by IPEDS.  This information is also broken down by institution type and student demographics.  

• Indebtedness.  Student loan debt at graduation. Source: National Student Loan Data System (NSLDS).

• Repayment rates.  Loan repayment rates are tracked by institution and student demographic as an indicator of a "positive" earnings outcome for its graduates.  The College Scorecard data set includes 1, 3, 5 and 7 year repayment rates tracked by the NSLDS.

• Pell grant penetration.  To assess access, the percentage of undergraduates receiving Pell grants is tracked for each school. Source: IPEDS.

Caveats

• The data is a bit outdated.  This isn't surprising given the breadth and depth of the dataset, but the information ends at 2013.  You are likely to get more recent net cost information and graduation rates from the Common Data Set or school websites.  The admissions data is also from 2013, so be especially careful here.

• The earnings data only applies to individuals receiving financial aid.  According to the Brookings Institution, this covers slightly less than half of all undergraduates and is likely to be biased downward because family earnings are a typically strong predictor of student earnings post graduation.

• Earnings aren't the only measure of a success.  While financial return is certainly an important consideration, there are many other dimensions of success that aren't captured here, including sense of purpose, workplace engagement, relationships and happiness.  Check out this May 2014 survey from the Gallup-Purdue Index for a more holistic take on the linkage between college and success. 

• The College Scorecard website only exposes a portion of the full data set.  The data presented in the website, while useful, only scratches the surface of the full data set.  We'll be delving more deeply into the full data set in the weeks ahead and will look to incorporate the most useful aspects into College Kickstart moving forward. 

At the end of the day, for families likely to receive financial aid, we think the College Scorecard is a useful way to assess access, affordability and "bang for buck" for the schools you're considering. The earnings information is extremely valuable, and when compared to net price or debt load at graduation, it can be used to assess the return on investment for 7,000+ schools.  The Pell Grant data will also provide visibility to the institutions providing the most access to low income families.

Click here to visit the College Scorecard website.