Student Debt and Graduation Rates: mislinked indicators of value?

If forecasts were certain and wants, precious stones
We’d eat beef and chicken and never see bones.-- N. Fulano de Tal

In 1975 I interviewed for a position with a major private “educational research corporation.” My task would be to develop a description of a vocational-education project so that it could be replicated across the country. The already-in-place federally funded ($3 million) pilot project had a 100 percent job placement rate for its graduates. The corporation hoped that with an adequate description, a substantially larger grant ($41 milion) could be obtained.

I asked how it was possible to get 100 percent placement. My interviewer told me that this was done by offering prospective employers a stipend to offset future wages to be paid. No student was accepted into the program unless an employer had been found who had accepted the agreement.

When I asked how such arrangements could be replicated across the country, given that we did not control our economy the way the Soviets did, I received the reply, "Ed, that is the one question around here that we never ask."

I did not accept the job. Someone else did. The description was written up. The large government grant was secured. That late 1970’s project left has no traces. Its perpetrators have advanced in reputation and position.

Which is the better school?

a. Grumbling U which graduates 20% of its original freshman classes who then regularly find good jobs that enable them to pay off their student loans; or
b. Pensyl U which graduates 98% who afterward cannot find a job that enables the grads to pay off their tuition debts.?

Barring fraud in the recruitment process, wouldn’t you pick Grumbling?

Open admissions policies have long been promoted as providing opportunity to more people for higher education. But the graduation rates tend to be lower because many more are unprepared for college demands. Should colleges, or other schools be expected to do something about this? Do schools and colleges control the market for their graduates?

Reported in Education Sector’s Biweekly Digest of Aug 2, 2011, some are suggesting using a borrowing-to-credential ratio as an indicator of college value: the student-loan debt they have to repay after graduation divided by the percentage of students graduating. But this is like defining wealth (value) as currency on hand (diplomas) rather than asking what that currency might buy (access to high paying jobs -- or, maybe, something else). This overlooks systemic effects on the costs and benefits of credential attainment.

On the borrowing-to-credential ratio measure, if we assume their tuitions are pretty much the same, it seems that Grumbling is ahead of Pensyl. However, don’t a lot of other factors have to be evaluated? ? Would it matter if it turned out that with another year or two, the great majority of all students graduated?

How should any schools prepare for something, especially when it is not clear what they are preparing for? Our society changes quickly and there is little consensus on both specific ends and means in education. Why are schools to be held responsible for market outcomes they do not control?

For references and to examine these issues further, see

How much can school reform enhance a student's occupational fitness?

Cordially
--- EGR