The choice of college is among the most important investment decisions individuals and families make, yet people know little about how institutions of higher learning compare along important dimensions of quality. This is especially true for colleges granting credentials of two years or less, which graduate two out of five postsecondary graduates. Moreover, popular rankings from U.S. News, Forbes, and Money focus only on a small fraction of four-year colleges and tend to reward highly selective institutions over those that may contribute the most to student success.
Drawing on government and private sources, this report analyzes college “value-added,” the difference between actual alumni outcomes (like salaries) and the outcomes one would expect given a student’s characteristics and the type of institution. Value-added captures the benefits that accrue from aspects of college quality we can measure, such as graduation rates and the market value of the skills a college teaches, as well as aspects we can’t.
The value-added measures introduced here improve on conventional rankings in several ways. They are available for a much larger number of schools; they focus on the factors that best predict measurable economic outcomes; and they attempt to isolate the effect colleges themselves have on those outcomes, above and beyond what students’ backgrounds would predict.