The question has arisen a few times now. “Tod, if you were at USED and absolutely had to build a ratings system college with current data, what would you do?’

It’s a tough question since I don’t believe the existing IPEDS data are up the task. So, I would attempt to to use the National Student Loan Data System and develop a result set about Title IV recipients. But that may not be possible just yet.

First, I would start with three categories, as I have written before. These would be Title IV Eligible, Title IV Eligible – Conditional, Title IV Ineligible. The federal government’s implicit authority to rate colleges based on Title IV participation and success I think is a given. Rating colleges outside of Title IV performance I think is not. However, given the lack of data specific to Title IV participants, some standard IPEDS measures will have to be used.

It seems to me that what is really at stake is Title IV eligibility. So let’s start be establishing minimum standards for participating in Title IV and assume that institutions have five years to meet these standards initially.It is neither fair nor appropriate to establish standards and apply them immediately.

Title IV Eligibility Minimum Standards – Four-year Institutions

• First-year Retention Rate Greater than or Equal to 60%
• Six-year Graduation Rate Greater than or Equal to 30% (All Students)
• Six-year Graduation Rate Greater than or Equal to 35% (Students with Pell grants at Entry)
• Six-year Graduation Rate Greater than or Equal to 35% (Students with Stafford Loans (Subsidized and Unsubsidized) at Entry) (Requires use of NSLDS or adding the required institutional disclosures to IPEDS)
• Six-year Graduation Rate Greater than or Equal to 40% (Students with PLUS Loans at Entry) (Requires use of NSLDS)
• Cohort Default Rate Less than 10%
• 80% of Graduates with Federal Loans in active repayment (including Income-based options) and in-school deferments.
• And as data become available through NSLDS, minimum 60% graduation rates for Title IV students in graduate and professional programs.

However, since the administration has made it clear that part of the desire is to increase the enrollment of Pell students at high-performing institutions, I might add a fourth category of Title IV Eligible – Unconditional for institutions that meet or exceed all the standards above and enroll a number of undergraduates receiving Pell grants at entry equaling or exceeding 25% of the traditional on-campus population. (In other words, lesser respected branch campuses or distance students that rarely, if ever, step on campus would not count.)

Title IV Eligibility Minimum Standards for Conditional Status  – Four-year Institutions

• First-year Retention Rate Greater than or Equal to 50%
• Six-year Graduation Rate Greater than or Equal to 20% (All Students)
• Six-year Graduation Rate Greater than or Equal to 20% (Students with Pell grants at Entry)
• Six-year Graduation Rate Greater than or Equal to 20% (Students with Stafford Loans (Subsidized and Unsubsidized) at Entry) (Requires use of NSLDS or adding the required institutional disclosures to IPEDS)
• Six-year Graduation Rate Greater than or Equal to 20% (Students with PLUS Loans at Entry) (Requires use of NSLDS)
• Cohort Default Rate Less than 15%
• 60% of Graduates with Federal Loans in active repayment (including Income-based options) and in-school deferments.
• And as data become available through NSLDS, minimum 60% graduation rates for Title IV students in graduate and professional programs.
• Requires ten-year improvement plan. If unable to move into full-eligibility status after that point, loses 50% of available Title IV funds.

Title IV Ineligible – Four-year Institutions

• Failure to meet any one of these standards constitutes an ineligible institution. Institutions failing no more than two standards would be able to appeal and be placed on a five-year remediation plan – after posting a bond equal to the Title IV funding at risk of loss for the numbers of students it would take to move into a passing score.

So, these standards are incredibly arbitrary. They would negatively affect a significant number of institutions. Further, with the addition of an “Unconditional” rating, some of the highest performing institutions in the nation (and Virginia) would not be in that highest status.

In one way though, they are not arbitrary. I have dealt with enough policymakers over the years to know how they react to graduation rates below 30% (shucks, many get outraged at rates below 50%). These are rates I feel that *I* could generally defend for about a decade. After that, I foresee necessary increases.

I have not suggested standards for community colleges. I’ll save for that another time, but they would be differently constructed.

Oh, I would also use the rating report to link each college to any state profile data and require that each college link to both federal and state reporting websites specific to that college.