There’s a new set of college rankings on the scene, and the finance educators at College Coach are pretty intrigued by them. Created by Money magazine, the focus of the rankings is on the financial aspects of a college education including how much you might pay at different colleges and how much you might make after graduation. The three categories they use to construct their rankings are quality, affordability, and outcomes. You can read more about their methodology here.
They aren’t perfect—no set of rankings is—and we could write pages about whether or not this system can truly capture the diversity of higher education institutions and the students who are attending them. But those arguments aside, we like these rankings because they should prompt you, the soon-to-be higher education consumer, to ask colleges (and yourself) some good hard questions as you decide whether or not to include them on your application list.
Let’s take it one ranking category at a time:
Quality: In this category, Money used several different pieces of data to rank quality, but I am going to focus on only one of them: graduation rates. Graduation rates are important because how quickly you complete your education is directly related to how much you pay! Graduation rates for all colleges are readily available on the federal College Navigator website, and you should compare graduation rates among the colleges you are considering to see if there are any differences. If there are, ask the college to explain their rate. There may be extenuating circumstances that explain lower rates, and rates may vary by program or by colleges within a university. Try to assess how likely it is that you will need longer than four years to complete your degree, and plan accordingly.
Affordability: Money used average net price, average indebtedness, and student loan default risk factors to calculate this ranking. Averages are great, but what about you? While colleges don’t tell you officially how much you will pay until after they have accepted you in your senior year, there are some ways to get an advance estimate of what a college will cost. Use the college’s net price calculator to calculate an estimate of your need-based financial aid eligibility (every college is required to have one—just search on their web site). Does the college offer merit-based scholarships? These are awarded without regard to need, and you can find an answer by reading the college website. If merit aid is available, ask yourself: how likely are you to receive a scholarship at that college? If you are above the median academic profile of incoming students, you are much more likely to receive one than students who are average or below average.
And as for indebtedness, how much can you afford to repay? It’s not too early to ask yourself this question. Experts say your monthly student loan payment should be no more than 10% of your monthly gross salary. Use calculators like this to try to estimate your starting salary and a reasonable amount of indebtedness. While these can be difficult and complicated topics to think about this early in the process, having conversations about expectations now can make for a much less stressful spring of senior year.
Outcomes: Money used some data from payscale.com to compare early and mid-career earnings by college, and they did some nifty adjustments to account for differences in majors. However, they also collected information about something very simple: the staff to student ratio in the career services office. While that number is certainly a start, you should learn everything you can about the career services offices at schools you are considering. What programs do they offer to help new students discern skills and strengths? Are there internships, co-ops and alumni mentoring programs available, and how widely are they utilized? How will these opportunities affect your experience in your intended major?
While we can bemoan the existence of yet another set of college rankings to muddy the college search waters, we at College Coach think it’s much more useful to acknowledge what Money is trying to quantify and apply it personally to your own process. Because after all, what you value and what you expect to get out of your college education is what really matters!