<p>^ The above quote typifies the nonsensical thinking that goes into the U.S. News rankings. If you had two schools with identical faculties and identical student bodies and identical curricula and identical graduation rates, and school A paid its faculty 20% more than school B, then school A would be ranked higher by U.S. News. Yes, it’s true that the schools that offer the most programs and services are among the biggest spenders. But so are those that operate least efficiently relative to their peers. The U.S. News ranking is designed to reward schools that produce higher education at the highest cost-per-unit. That’s one big reason that larger schools, public or private, generally don’t fare as well in this particular ranking; they’re punished for achieving economies of scale, like, for example, being able to spread the fixed costs of maintaining a top-notch library over a base of 20,000 students, thus lowering the cost-per-student, while some smaller school with a similar library spreads similar costs over a base of 5,000 students, thus having a higher cost-per-student for which it is rewarded in the U.S. News ranking. </p>
<p>Because colleges and universities compete for higher U.S. News rankings, at the margins this creates an incentive for colleges and universities to raise costs, even if there’s no educational advantage to it. I once heard a college administrator speculate out loud that if he raised tuition 20%, recycled half of the increased revenue into need-based FA (making the increase cost-neutral for students receiving need-based FA), and put the rest into raising faculty salaries, it would move his school up several places in the U.S. News rankings, because both the increased FA and the increased faculty salaries would count as increased spending-per-student. Indeed, if instead of providing in-state tuition at a steep discount, public universities just charged everyone a single high tuition rate comparable to what the elite privates charge, and pumped all that additional revenue right back into need-based aid for in-state students so that the net cost to in-state students stayed the same, they’d rocket up the U.S. News rankings. No one would be better off—the students would effectively be paying the same, and the universities would have no more real resources to work with. But because of the bizarre ways U.S. News measures things, their rankings would improve.</p>