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U.S. News ‘Best Colleges’ rankings will take colleges’ average debt load into account

Dave_BerryDave_Berry CC Admissions Expert 511 replies3145 threads CC Admissions Expert
"For the first time, the U.S. News Best Colleges rankings, the perhaps best-known and in some circles, most controversial, college guide, factored student debt in its rating of schools.

To determine colleges’ rankings, which were revealed Monday, U.S. News took into account the average amount of federal student debt undergraduates leave the school with and the percentage of full-time undergraduate students who borrowed federal student loans.

Adding those two factors into the mix of indicators shifted some of the weight the organization places on other metrics. For example, the value placed on standardized test scores and alumni giving were subsequently reduced. " ...

https://www.marketwatch.com/story/u-s-news-best-colleges-rankings-will-take-colleges-average-debt-load-into-account-for-the-first-time-11600075147
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Replies to: U.S. News ‘Best Colleges’ rankings will take colleges’ average debt load into account

  • EconPopEconPop 672 replies11 threads Member
    edited September 14
    So colleges that attract a disproportionate number of wealthy students will rise in the rankings!
    "Four out of five of the schools with the highest average debt load, according to U.S. News are Historically Black Colleges. These schools educate a large share of the nation’s Black and low-income students, who, due to centuries of racial wealth inequality, typically have fewer resources to draw on to pay for college. But these same dynamics also mean that HBCUs historically haven’t had access to the kinds of resources that allow predominantly white institutions to offer generous financial aid to their students."
    I hesitate to wonder if this is an unintended consequence or part of the intended consequence.
    edited September 14
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  • theloniusmonktheloniusmonk 3099 replies5 threads Senior Member
    Or a college that doesn't charge that much to begin with, I'm not sure there's a big difference in the rankings from last to this, but I'll guess that public Us may do a little better.
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  • BKSquaredBKSquared 1759 replies8 threads Senior Member
    You'd think the better metric to measure what I think they are getting at is either avg net price after financial aid or avg debt of students on financial aid.
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  • ucbalumnusucbalumnus 84563 replies750 threads Senior Member
    edited September 14
    https://www.usnews.com/education/best-colleges/articles/how-us-news-calculated-the-rankings says that "Schools that ranked the highest had the lowest average amount of debt accrued by their the most recent graduates and a relatively small proportion of students graduating with debt compared with other schools in their U.S. News ranking category." This makes up 5% of the ranking (3% for indebtedness level, 2% for proportion with debt).

    Basically, colleges with more students from wealthier families and enough money of their own to fund good financial aid for the few who do need it will do better on this measure. In other words, it skews the ranking in favor of the usual prestige privates.

    In theory, these ranking factors could create incentive for colleges to offer better financial aid to reduce the amount of debt and the percentage of students with debt. However, it may be easier and less costly for colleges just to chase students from wealthier families to improve these ranking factors.
    edited September 14
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  • SJ2727SJ2727 2824 replies15 threads Senior Member
    So colleges that attract a disproportionate number of wealthy students will rise in the rankings!

    And the wealthy colleges that meet full need, that are mostly already around the top.
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  • theloniusmonktheloniusmonk 3099 replies5 threads Senior Member
    gaming the rankings is one thing but paying to game the rankings is another.
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  • Data10Data10 3432 replies11 threads Senior Member
    So colleges that attract a disproportionate number of wealthy students will rise in the rankings!
    The 2% weighting on colleges with the least federal loans no doubt favors high endowment private colleges with top FA like HYPSM... The top USNWR ranked colleges were Harvard (2%), Princeton (4%), Caltech (5%), Stanford (8%), and Yale (8%).

    However, the larger 3% weighting on average debt among students who took out federal loans has a more complex relationship. HYPSM... all do very well, but some publics with lower tuition also do well since many of the students who take out loans tend to take out smaller loan sizes. For example, the following colleges all had similar average loan totals among students taking federal loans.

    CUNY - $12.5k
    Yale -- $13.0k
    UC Davis -- $13.0k
    UC Berkeley -- $13.7k
    Harvard -- $13.9k

    The combined weighting probably still favors the usual high endowment privates.

    For a particular student, this metric is near useless. Who cares about the average federal loan statistics for that college? The far more important metric is how much debt that particular student needs to take on, and that number is probably going to very different from the federal loan average and probably will not follow the listed order well.





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  • Data10Data10 3432 replies11 threads Senior Member
    ucbalumnus wrote: »
    In theory, these ranking factors could create incentive for colleges to offer better financial aid to reduce the amount of debt and the percentage of students with debt. However, it may be easier and less costly for colleges just to chase students from wealthier families to improve these ranking factors.
    With 2% and 3% weighting, it won't have much influence on rankings. In theory, it could also result in colleges encouraging students to take out institutional loans or other private alternatives to federal loans.

    For example, my earlier post mentions that Caltech was among the top 3 colleges with fewest federal loans, with only 5% of students. This 5% number is used for USNWR ranking. However, ~30% of Caltech students took out loans in 2019, not 5%, with the vast majority of that 30% coming from institutional loans. Caltech institutional loans typically have a slightly lower interest rate than federal loans, so most students choose Caltech institutional loans over federal loans. These Caltech institutional loans don't incur a USNWR penalty since USNWR only counts federal loans. The small minority of Caltech students who took out federal loans also usually took out institutional loans, which keeps the average federal loan amounts down, further boosting USNWR ranking.

    UCLA shows a somewhat similar % of students taking out loans as Caltech and average loan amounts, but UCLA doesn't do as well since the vast majority of UCLA students who take out loans choose federal loans, not institutional loans, so they incur the USNWR penalty.
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  • 1NJParent1NJParent 2576 replies37 threads Senior Member
    Data10 wrote: »
    ~30% of Caltech students took out loans in 2019, not 5%, with the vast majority of that 30% coming from institutional loans. Caltech institutional loans typically have a slightly lower interest rate than federal loans, so most students choose Caltech institutional loans over federal loans.

    Not all loans are the same. I know a Caltech student who took out an institutional loan , after his enrollment, to buy a car (he presumably justified it to the FA office why he needed a car). The loan had zero interest rate while he was in college, and no payment and de minimis interest rate while he was in grad school. He only had to repay his loan after he got a job and the monthly payment was capped and interest rate was a fraction of the market rate. That must be the next best thing to free money.
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  • MYOS1634MYOS1634 43371 replies473 threads Senior Member
    This doesn't seem to include private loans so it may make colleges with poor FA more likely to offer institutional loans or refer students to private lenders rather than encouraging them to take on federal loans?
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  • theloniusmonktheloniusmonk 3099 replies5 threads Senior Member
    Cal tech being out of the top-10 was a little misleading given they use EA so can't game the rankings with ED.
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