The Economist Ranking

The Economist’s College Ranking

Several years ago the Department of Education proposed its own college rankings. Many institutions serving the postsecondary market in the United States demurred.   

Consequently, the Obama Administration decided not to go forward with the ranking. It did, however, make its treasure trove of data available on the Education Department’s College Scorecard website, which went live September 12th.

What makes the information in the College Scorecard website so unique is it addresses how much better off is a student who attends one university instead of another. The US Educational Department, through its National Center for Educational Statistics, which runs FAFSA and the College Navigator site, garnered student loan documents and any student income tax returns over the past 10 years.

Yet, like any ranking system devised by humanity, even these hard financial data contain inherent imperfections:  they include only students who filed for financial aid, leaving out students from wealthier families who are likely to secure high paying positions upon graduation; they track earnings for only 6 years after graduation—students entering medical or other professional schools would show up as low, to no, earners; lastly, the chief purpose of college is usually not to maximize earnings of those who attend. Some seek to go into public service and that is not, by any means, a negligible or unworthy path.  

Acknowledging these flaws, The Economist determined it’s still worthwhile to let the numbers speak for themselves.

The Economist harvested a basket of factors to determine the expected median earnings of an average student attending a given university.  These include a campus’s  average SAT scores, sex ratio, race breakdown, size, and  whether it is public or private, religious affiliated, has an undergraduate business program, has a liberal arts program, attracts students who were politically left or cannabis inclined (the “Marx and Marley” index), and its geographical location.  These variables, according to the statisticians at the Economist, reflected 85% of the variation in graduate salaries: they appear statistically significant. Comparing real graduate median earnings with expected median earnings indicates whether a college is under or over performing.  

Once the numbers for the various colleges are reviewed, the returns are quite different from what one would expect. The scorecard contains data on 1,275 4-year non-vocational colleges. The website can be found here, and is a place where you may conduct your own ranking research.

Among the top 20 performers are (#6) Otis College of Art & Design, (#10) CSU Bakersfield, (#12) University of Pacific, (#19) California Lutheran, and (#20) CSU Stanislaus. If you decide to go to the website you’ll find for each college the expected median earnings, which is calculated based on the criteria mentioned above, then the actual median earnings distilled from the College Scorecard.

Otis with its communication arts, digital media, product design and toy design departments apparently does a good job of feeding its graduates into Hollywood, Mattel, and other industrial design companies through its job boards and internship programs.  The expected earnings of a graduate are $28,900, while the actual median salary is $42,000, an over-performance of $13,100.

The bottom performers in The Economist ranking are equally surprising. At the very bottom is Cooper Union, which underperforms by $16,000, Rice, by $9,800, Yale, by $9,800, Wheaton (IL), by $9,100, and Swarthmore, by $9,000. As mentioned, there are mitigating factors for these performances. One might, though, believe that where there is smoke there is fire.  In any case, it’s always best to be aware of how students fare at any given college. 

The Economist ranking, based on data from the College Scorecard, is a tool, controversial or not, to gain a sense of which colleges outperform expectations in terms of dollars and cents.