Thursday, November 21, 2013

Issue 211 Obama's school rating system Novemeber 21, 2013


We have talked about rating schools before, and there is no doubt that we will not be discussing it again. Like right now. President Obama has proposed a school rating system a few months ago which was summarized in the Wall Street Journal article "Obama to propose College Rating System on Bus Tour." So let’s examine it and see if it has any merit.

What it wants to do: President Obama is looking to tie federal student aid to a college's level of performance. As such colleges will be rated on how well they help disadvantaged students the most (all before the year 2015). Financial aid will then be dictated by those ratings (in the year 2018). Part of the rating will be based on how affordable the college is and the outcomes of that education which include graduation rates and transfers. The top performing colleges under this system will get larger federal grants and more affordable student loans given to student who go there. In addition, the plan calls for more innovation such as a 3 year accelerated degree and more online courses.

With this comes a pay as you earn program. This concept has you pay your student loans back by a percentage of your pay check. In this case, the plan calls for 10% of a graduate’s monthly income to be taken out to pay back the loans. Also, the race to the top program will have its funding raised with it being more focused on higher education reforms. So this is Obama's plan in a nutshell.

Critiques: I have come to not like overly complicated rating systems. Especially when the schools involved do not have a uniform standard by which to measure performance. As such one will need to be created either by the government, or the colleges. Both options are dismal as the government is prone to corruption by lobbyists and the colleges may purposely seek to weed out their smaller competitors. Basically, a rating system that favors elite schools would be created either way, even if elite is just another false title.

Also, giving out more loans only incentives colleges to allow their prices to rise. Student loans have a unique relationship with college prices. The higher the loan, the higher the price for college goes. Colleges know they can raise prices more because the federal government will just give out larger loans. But the people who get screwed by this are the students who end up with massive debt. The only good thing I like about this is the automatic loan payments taken out of the paycheck. It may make it easier for a college student to pay their loans back as they don't have to really think about it and they only are forced to pay when they have a job in the first place.

Conclusion: Colleges are not getting any cheaper. As such, alternative methods of education are rising to not only compete, but in some instances take the place of colleges in specific fields of work. I do not see this system working at all save the deduction to pay back a loan through the individuals pay check. It would also be great if the colleges made a bachelors degree a 3 year degree, but only if they make an associates a 1 year degree and make many of the masters and doctorates undergrad courses. Let’s face it, many of the programs and jobs done at the college level don't need a college to be taught, or to take more than 4 years of learning to learn. Especially as many jobs are forced to retrain many of their new hires which costs them money. So alternative education is winning and as such, I question if the federal government is focusing on the right solution to what seems to be an ever worsening problem.

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