In August 2013, the Obama administration announced plans for a rating system to assess the accessibility, affordability and outcomes of individual colleges and universities. Various stakeholders have raised important concerns about the potential negative implications of a rating system, particularly for students from groups that are historically underrepresented in higher education and the institutions that serve these students. Earlier this month, the U.S. Department of Education acknowledged these concerns and said that it is working to create a rating system that addresses them.


Any rating system must recognize the tremendous diversity of U.S. higher education institutions and the students that they serve. The diversity of institutional missions and goals is one of the central strengths of the U.S. higher education system — and must be preserved. At the same time, any adjustments to institutional performance measures to account for this diversity must be transparent, easily understood and credible.

How to best account for, and preserve, the diversity of today's college students and institutions is just one question that must guide construction of a rating system. As work on the rating system continues, federal policymakers should also consider several other questions:

What are the goals of a rating system for higher education? The White House states that it intends for this new rating system to first serve as a resource for students and their families, and then later inform the distribution of federal financial aid. Can one rating system effectively serve the different information needs of these groups?

What information can a rating system generate that is not already available? Students already have access to many different sources of information about individual colleges and universities, including the Department of Education's College Navigator and the College Board's Big Future College Search tools. Even with these tools, however, we know that students and their families often do not have complete and accurate information to guide their college-enrollment process. This reality raises the question: Is a website a sufficient mechanism for providing the kind of information students and their families need?

What should be measured? While measures of completion, reliance on student loans and employment are of great interest to students, families, institutions, and the federal and state governments, considering these outcomes at face value may create unintended consequences. For instance, measuring only college completion rates and borrowing rates may encourage higher education institutions to enroll only the students they know will complete degrees on time and not borrow to pay for college costs — particularly if performance on these rates is tied to federal funding. To be effective, a rating system should instead measure the value added to a student — and our communities — by attending a particular college or university.

How can a rating system be structured to effectively improve higher education performance? Any effort to develop a federal rating system should draw on the insights learned about related efforts by state governments to incentivize higher education institutions to improve their performance. A number of states have, or are considering, some form of performance-based funding system. But research on an earlier wave of state performance-based funding systems (including a study published in the September 2014 issue of The ANNALS of the American Academy of Political and Science) suggests that this approach has not improved the performance of higher education institutions.

What is the appropriate role of the federal government in encouraging improvements in higher education performance? Although the federal government invests considerable resources in student financial aid, most strategies and policies pertaining to higher education in the U.S. are created at the state, not federal, level.

How can the federal government create "buy-in" from colleges and universities? A recent "What's AHEAD" poll of higher education trend-spotters revealed that many leaders believe that a scorecard will have no impact or even negative consequences. Leaders also worry that selected indicators will not capture institutional diversity and mission, or measure important outcomes. Many higher education leaders believe that accrediting agencies are the most influential source of accountability demands, and that they use sufficient indicators of quality.

Clearly, much more must be done to improve the performance of higher education in the U.S. The nation must raise the attainment of its population, and close the persisting gaps in attainment across demographic groups, if it is to have a workforce that is qualified for available jobs in our global, technologically driven world. At the same time, tuition is rising and college affordability is declining. More students are borrowing larger amounts to pay college costs. College completion rates have increased only marginally. To be an effective mechanism for addressing these and other challenges, a federal rating system must address these fundamental questions.

Perna is executive director of the Alliance for Higher Education and Democracy and the James S. Riepe Professor at the University of Pennsylvania's Graduate School of Education. She is the author, with Joni Finney, of The Attainment Agenda: State Policy Leadership for Higher Education (Johns Hopkins University Press, 2014).