In response to outrageously high tuition costs that are burdening students with crushing debt upon graduation, President Obama last week proposed a rating system for colleges that would judge schools on their affordability and perhaps be used to allocate federal aid. The plan has one glaring weakness, but it should get the attention of many of the nation's institutes of higher education.
According to the administration, the tuition at public, four-year universities has tripled over the last 30 years, and a College Board Survey found that the cost of an average student loan to a private college has risen to 13 percent over inflation. The average student loan debt is at $26,000, with many students carrying far higher burdens. These debts don't just burden the individual student. Many students who planned to work for nonprofits so they could benefit society can't afford to do so because of the low salaries. They also can't buy homes, cars or other big ticket items that fuel the economy.
Under the president's proposal, colleges and universities would be ranked on the basis of tuition, average student loan debt, graduation rates, and the average earnings of graduates. This last category sets off alarms, as the schools that prepare students for important vocations that don't pay well would be penalized for doing so. Does the country need more Wall Street bankers or more teachers and social workers? The administration should not use average earnings of graduates as a basis for judgment, especially if, with congressional approval, that category is used to determine the size of federal grants.
Senator Lamar Alexander of Tennessee, who is the top Republican on the Senate Health, Education, Labor and Pensions Committee, argues that high tuition costs should be addressed by the states, not the federal governments. The states, however, do not have the financial cudgel that Washington has available, and there are too many states that can't be counted on to take an interest in student debt.
"Higher education cannot be a luxury," declared Mr. Obama last week. "Every American should be able to get it." With some adjustments, this rating system could help assure that every American can afford higher education.