Cost adjusted graduation rates

The Washington Monthly ranks colleges in a new way. The fact that institutions serving high minority populations score well was surprising...

America’s Best-Bang-for-the-Buck Colleges
So this year, the Washington Monthly rankings incorporate a new measure we call the “cost-adjusted graduation rate.” This involves tweaking the calculations the magazine has long used to derive a school’s social mobility score. In the past, we predicted a college’s graduation rate using the median SAT/ACT score of each school and the percentage of its students receiving Pell Grants and then compared it to the actual graduation rate. This year, we made two changes. First, to increase our ability to predict graduation rates, we used additional student and institutional characteristics, such as the percentage of students attending full time and the admit rate. Second, to get at cost-effectiveness, we took the gap between the predicted and actual graduation rate of a school and divided it by the net price of attending that institution. Net price represents the average price that first-time, full-time students pay after subtracting the need-based financial aid they receive.) The aim of our new cost-adjusted graduation rate is to highlight those colleges that use their resources to effectively educate students at a relatively low cost—and to call out those that burn though tuition dollars without much to show for it. 
What did we find? First, that colleges and universities that do well by this measure tend to be public institutions. That’s not a surprise, given that tuition at these schools is kept relatively low by state subsidies (though per-student subsidies have been declining in many states). It also turns out that quite a few minority- serving institutions, such as the University of Texas-El Paso and Elizabeth City State University, score near the top of the list.


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