Should We Rank Colleges Based on Their Graduates’ Earnings?

Jordan Weissmann:

recently reported on PayScale’s newest batch of college rankings, which compare how much a school’s graduates earn to how much they pay for tuition. In other words, it calculates each institution’s financial return on investment, which seems a far saner way to look at the value of a degree than anything that U.S. News, for instance, has cooked up. (In case you were wondering, PayScale ranked Harvey Mudd College at No. 1, with a $1.094 million 20-year net ROI on $116,800 tuition; MIT, Caltech, and Stanford came in at Nos. 2, 3, and 4, respectively.)

But not everybody feels so warmly about the idea of judging schools according to their ROI—particularly academics, who expressed qualms last year when President Obama proposed his own ratings system for colleges that would take into account how much graduates make. With the PayScale list out, Cedar Riener, a professor of psychology at Randolph-Macon College, took me—and PayScale—to task with a blog post titled “The Absurdity of Ranking Colleges by Graduate Salaries.” Riener was particularly irked by my decision to focus on colleges at the very bottom of PayScale’s list that offered alumni a negative return—meaning students spent more on their education than they made back in extra earnings.