The White House and the U.S. Department of Education have released a comprehensive “college scorecard” system which is supposed to provide detailed information on a college’s “bang for your buck.” Hundreds of colleges and universities are measured by the scorecard, and it takes into consideration a college’s costs, graduation rate, loan default rate, average student loan amount borrowed, and employment prospects. The federal government hopes to continue refining the scorecard and adding other indicators such as employment figures and earnings potential.
I’ve checked out the scorecard. It actually provides some very helpful and easy-to-understand information to prospective college students and their families, but it’s also lacking in some key areas:
- Costs: The scorecard shows you not only how much it costs per year to attend a particular school, but it also factors in average financial aid awards at the school and shows you how the total average cost has changed over the past several years. This is particularly useful because often, the cost of attending an institution will increase during a student’s attendance.
- Loan Default Rate: This measures the percentage of students who default on their federal student loans within three years of graduation. The measurement also compares the college’s default rate to the national default rate to give prospective students a sense of how the school compares nationally. My biggest gripe with this measurement is that it does not factor in default rates on private student loans, which are often far more difficult for graduates to manage and repay, and private loan default rates have been rapidly increasing over the past decade.
- Average Borrowing Rates: This measurement is particularly useful in that it does not just show you how much total federal student loan debt a typical graduate has at the time of graduation; it also shows you what the average monthly payment would be on those loans. Again, however, this measurement does not factor in private student loans and so in my view, it grossly underestimates the total amount borrowed and thus can actually be misleading.
I think they’ve got the right idea in creating this scorecard, and the more information that is available to students and their families, the better. There are areas that need tweaking, and I’m hopeful that the scorecard will be refined and improved over time. To read more about the scorecard, click here. To check out the scorecard yourself, click here.