The next iteration of the College Scorecard should include data to help create a “value-added” rankings system that examines student earnings after college, according to a new report from the Brookings Institution.
The report – authored by Matthew M. Chingos and Kristin Blagg of the Urban Institute – examines what an effective value-added model that compares earnings outcomes of higher education institutions would look like. Overall, a value-added model that measures the same indicator over time “is most compelling,” the authors wrote, citing the K-12 model that tracks test scores year over year as a model that “works well.”
“Put simply, K-12 teacher value-added models work because last year’s test score is the best predictor of this year’s test score, much as yesterday’s weather is the best predictor of today’s weather,” the authors wrote. Therefore, a value-added model that looks at the earning of college graduates “would fit the bill” for such a system in higher education.
The new earnings data included in the College Scorecard provides some of the tools needed to create an economic mobility ranking system for higher education, including the separation of data on dependent students (those who are 23 or younger and are required to include their parents’ income on their FAFSA) and independent students (those who are 24 or older and do not include their parents’ income). The authors noted that the two categories of students “must be considered separately” due to the differences in how their pre-college earnings are comprised.
Using data from the Scorecard, the authors provided an illustration of what an economic mobility model might look like. For example, the authors examined the average earnings both before and after college over the decade for the 2001 and 2002 cohort of independent students across 2,268 institutions. The data showed “significant variation” in the economic mobility across the schools, particularly at institutions that enroll low-income students. Among institutions with average starting incomes of $40,000, the economic mobility measure ranges from less than $0 to more than $100,000.
The analysis is “trickier” to replicate with dependent students, as they are less likely to work full-time before attending college, though the model can still illustrate how similar institutions compare in terms of post-graduate earnings, the authors wrote. For this group of students, they used data from 1,104 two-year colleges and 1,406 four-year colleges where at least half of dependent students were working and not enrolled in school 10 years after matriculation.
The analysis showed a similarly high level of variation in post-graduate earnings across colleges that enroll dependent students who receive financial aid and have similar family incomes. For example, colleges with dependent students who have average family incomes of $100,000 showed economic mobility measures that varied by more than $20,000 around the average for most colleges.
The Scorecard, however, has several limitations in terms of creating an accurate comparison between the two groups of students. For instance, the data does not allow for an equal comparison of an independent student’s earnings before and after college – pre-college earnings reported on the FAFSA include the student’s spouse’s earnings, while post-college data is for the student alone. In addition, post-college earnings are only measured for students – both dependent and independent – who are working and not enrolled in school. There is also currently no way to measure academic preparedness at the majority of institutions, a factor the authors said would be “ideally” included in a value-added model for post-graduate earnings.
While these current limitations can be “potentially misleading,” the authors wrote that an economic mobility ranking of U.S. higher education institutions “is well within reach” if the next version of the Scorecard addresses the current data limitations. They outline three solutions that can be implemented with the next iteration of the tool:
Publication Date: 11/16/2015