Study: College Rankings Inflate Tuition Costs


Rick Hess, resident scholar and director of Education Policy Studies at the American Enterprise Institute, says that inflated college rankings enable schools to charge exorbitant tuition rates. His investigation of Barron’s Profiles of American Colleges warns students and parents to take these rankings “with a big grain of salt.”

In an interview with the Free Beacon, Hess explained that “since nobody knows how to judge how good a college is, there’s a casual assumption that price is quality.” As in the case of “fancy restaurants, fancy resorts, and expensive box seats, the price becomes a measure of how good it is.”

“The laws of economics can seem to operate in reverse in higher education,” Hess’ report explained. “Instead of being punished by consumers for high prices, schools frequently attract more students when they raise their tuition.”

Barron’s uses four criteria to determine the selectivity of a school: the incoming students’ average class rank, SAT and ACT scores, acceptance rate, and GPA. Hess explained that while class rank and standardized test scores have remained stable, both the selectivity (measured by the percentage of denied applicants) and the average GPA have increased over the past twenty years.

“The share of students that a college accepts” has declined “because students are applying to more schools through the common application,” Hess said. More schools have joined the common application and more students are applying. Due to these changes, colleges “see twice as many applications as they did in 1992, and they use this as a marketing tool and a way to raise prices.”

Similarly, average GPA has increased by ten percent since the early nineties, Hess said. His report cites the National Center for Education Statistics, explaining that “high school GPAs nationwide have steadily risen, from an average of 2.68 in 1990 to 3.0 in 2009.”

However, the National Assessment of Educational Progress shows no improvement in math or reading scores. Students may get better grades in high school, but “no evidence exists that these students are more accomplished than their lower-graded peers two decades ago.”

“I don’t think anybody would be surprised to hear that colleges are charging a lot,” Hess said. Nevertheless, he urged students and parents “to be very careful that they’re not paying Gucci prices for store-brand merchandise.”

“Ideally,” Hess added, “what you really want to know is how much you are learning in college,” and “how much good is a college education for its students,” in terms of jobs and future opportunities. “Barron’s has paid zero attention to either of these,” he said.

Hess suggests that college rankings take inflated GPAs and selectivity rates into account.

When asked who benefits from these inflated rankings, Hess pointed to the colleges themselves. “If you’re actually a three-star restaurant,” he explained, “these people treat you like a four star restaurant, because you have more tables outside.”

The marketing strategy also leads to higher taxes. Since “people go to expensive colleges rated as selective, they need to borrow more money.” With student loans regulated by the government, “the taxpayer gets stung indirectly,” Hess said.

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