A Call for President Obama

President Obama has said that even with a divided Congress, he has access to the phone and the pen. The White House summit on access was an example of what could be accomplished after phone calls, bringing together leaders from over 100 institutions to strengthen commitments to increasing college opportunity for low-income students.

One phone call that the president should make now is to U.S.News and World Report, asking editors to include socioeconomic diversity in more meaningful ways in their college and university rankings. If the Obama administration wants greater commitment on the part of colleges and universities to spend additional resources on financial aid, it needs to create greater incentives for them to do so. Changing the rankings would be a step in the right direction. U.S. News claims that its ranking already does this. But, if this were in fact the case, the rankings wouldn’t change as much as they do when a direct measure of socioeconomic diversity is added. And of course, the federal government could have a more direct impact by tying access to federal subsidies more directly to success on socioeconomic diversity.

Today, any dollar spent on need-based financial aid receives little credit in the U.S. News rankings, and also means not spending it on things that do count, such as small classes or faculty resources. Since most colleges include a commitment to the diversity of their student bodies as part of their mission, such a change should not be objectionable.

What would be the impact? The table below shows the rankings of the top 20 (plus ties) of national universities and of liberal arts colleges, according to U.S.News and World Report's latest rankings. A second ranking for each group of institutions is listed, which includes two variables that represent socioeconomic diversity. The first is the share of Pell Grant recipients. This is reported as the difference between the actual share of Pell Grant recipients and what would be expected given the academic selectivity of the school (measured simply as the share of students from the bottom two quintiles of the income distribution with the required SAT scores in the national pool). A positive number means the school is doing really well by low-income students. The second measure is the share of students on need-based financial aid, again relative to what would be expected given the school’s selectivity.

In this case, the share of students in the national pool from the bottom 80 percent of the income distribution with adequate SATs is used to measure what would be expected given the selectivity of the school. The rankings change when socioeconomic diversity is included. (Note: I’ve just included the rank of each school on the two measures of socioeconomic diversity and given them a 25 percent weight. U.S. News would do it in a different way, but the fact that including these variables would change the rankings would remain the case.)  

There is much criticism of the U.S. News rankings, including that any unique ranking of schools based on a variety of variables can’t possible indicate for any individual student and family whether the college is a good match. But these rankings don’t seem to be going away and they do create incentives for schools. If the Obama administration is serious about increasing the incentives for schools to allocate resources to financial aid, encouraging U.S.News and World Report to change its rankings would help. A phone call from President Obama just might accomplish this.