It may seem like an alternate universe in which a list of the nation’s top colleges does not include Harvard in its top five, and the top two—Babson College and Webb Institute—are ones you may have never heard of. This is what Money magazine’s best colleges list looks like, and the reason it is so different from traditional college rankings is the emphasis it places on tuition costs as compared to post-college earnings. In other words, what is the value of a diploma from a given school, when factoring in how much it cost to earn that diploma?
Money generated its rankings by evaluating three factors—quality, affordability and outcomes—which it weighted equally. The “affordability” metric considers the price of the school (including room and board), minus scholarships and discounts, as well as other factors such as the average number of years it takes students to graduate, the amount students and their parents borrow to pay for attending the school, and the student loan default rate for that school. The “outcomes” metric looks at the earnings of graduates both five and ten years after graduation, and makes adjustments according to student demographics and majors (so that schools will not be penalized for high percentages of students who go into public service and make less money, and vice versa). “Quality” encompasses the usual items such as SAT scores, graduation rates and student/faculty ratios that college ranking systems traditionally rely on, and that typically propel elite institutions to the top.
This new list, a far cry from the U.S. News list that thousands of high school students rely on, is certainly stirring things up in the college rankings world. As reported in the NY Times article that parses out Money's innovative system, the Obama administration is working out its own college ratings system that factors in affordability, and a methodology like this, though not without controversy, is certainly a step in that direction.
See Money’s rankings list of best colleges and methodology here.
Building a Better College Ranking System. Wait: Babson Beats Harvard?