Study: College Rankings Affect Aid Packages

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High school seniors and their families pay such close attention to the college rankings published annually in U.S. News & World Report magazine that many institutions beef up financial aid packages to attract potential students in the years when their rankings sink, according to a study.

In what was described as the first empirical study of the highly publicized rankings, researchers found that a college's place on the newsmagazine's list was directly related to the number of students who were admitted and enrolled and the amount of financial aid the college handed out.

The study, first published in the November- December issue of the American Association for Higher Education's Change magazine, examined the impact of rankings between the 1988-89 and 1998-99 academic years at 30 colleges and universities. The AAHE is a Washington-based organization that assesses policy.

"We do not find huge effects, but we find a consistent story," said James Monks, the senior economist at the Consortium on Financing Higher Education at the Massachusetts Institute of Technology, who co- wrote the report, titled "U.S. News & World Report College Rankings Matter!" "A 3 or 4 percent change in prices doesn't sound like much, but over the years it ends up costing institutions," he added.

U.S. News & World Report's college-ratings guide is among many now being published. Others include Princeton Review's The Best Colleges and The Fiske Guide to Colleges published by Edward B. Fiske, a former education editor of The New York Times. The U.S. News rankings are probably the best- known, however, and the magazine remains the only mass media outlet to put together such a list.

Ups and Downs

When a college slips in the U.S. News rankings, fewer students who are accepted to the school enroll and the quality of those who do choose to attend falls, the study found. Conversely, colleges that are bumped up in the rankings experience an increased volume of accepted students with stronger profiles enrolling. Moving up or down the list five slots results in a change of average SAT scores of 5.5 points, according to the study. Such a shift also corresponds with a 2 percent change in the number of students admitted.

Institutions respond to changes in rank by altering financial-aid packages, the authors write. A change in rank of 10 slots, for example, is associated with a 4 percent change in the size of financial-aid packages, which translates into a savings or expenditure of hundreds of dollars for families.

The study's authors looked at a group of schools that included 16 of the top 25 national universities and 13 of the top 25 national liberal arts colleges. National universities are defined by the Carnegie Foundation for the Advancement of Teaching as the 228 institutions that provide a full range of undergraduate, master's, and doctoral degrees, and emphasize federally funded research. There are 162 national liberal arts colleges, as defined by the Carnegie Foundation, that emphasize undergraduate education and award at least 40 percent of their degrees in the liberal arts.

"If an institution falls in the rankings, [colleges] don't cut their prices because cutting tuition in a sense may seem a sign of weakness," said Ronald G. Ehrenberg, a co-author of the study and the director of the Cornell Higher Education Research Institute at Cornell University. "They keep prices relatively constant in comparison to the competition and try to attract students by increasing grant aid."

Colleges that rise in the rankings experience a greater demand and aren't compelled to offer price breaks to woo highly qualified students or fill their seats, he said.

"In the last few years, we've seen financial aid being used a lot differently in the application process," said Jack Joyce, the director of guidance services for the College Board, a New York City-based nonprofit membership organization. "Financial aid and admissions used to operate independently from each other. Increasingly, financial aid has been moved to the front end of the process, which results in too many families looking at the bottom line as the first point of interest."

Magazine Responds

The authors of the U.S. News rankings contend that the new study documents inconsequential shifts. "Changes of 2, 3, or 4 percent in things like yield [the percentage of students admitted who attend], or in SAT scores occur all the time and can be due to any number of factors or confluence of factors," said Peter Cary, the special-projects editor for the Washington-based magazine.

Moreover, few schools move up or down in the rankings more than five slots each year, and for those that do, the impact on students and institutions is minimal, Mr. Cary said. And, while the rankings are one of several powerful tools used to assess colleges, few students likely use them as their sole resource, he added.

High school counselors said they weren't surprised to learn of the study's findings, and added that rankings guides had become as much a part of school culture as textbooks. Moreover, an increasing number of students and their families are relying heavily on them for information, according to counselors.

First published in 1983, the U.S. News & World Report guide is distinctive because the magazine surveys more than 1,400 institutions and places the country's top 50 national universities and top 50 national liberal arts schools in pecking orders using extensive criteria. In 1999, for example, the magazine considered academic reputation, faculty resources, and graduation and retention rates the most important characteristics when weighing universities and liberal arts colleges.

Snapshots for Students

Students and their families like the lists because they provide quick snapshots of institutions and save applicants extensive research on their own, said Bill Rubin, the director of the College Authority, an independent college-counseling service based in Costa Mesa, Calif. Mr. Rubin said he has seen interest in the guides more than double over the past decade.

Ronald G. Ehrenberg

About 650 of the 700 students he currently works with "depend heavily" on the lists, he said.

The counselor warned, however, that many students and high schools rely too heavily on the rankings to make decisions. Although such surveys take into consideration institutions' selectivity and alumni support, they can't tell students whether they'll enjoy going to school in an urban environment or a rural one, Mr. Rubin noted, or if they'll perform better in a large lecture hall at a major university or in an intimate discussion group at a small college.

"Many [students] will literally enroll at the school which was most highly ranked by U.S. News & World Report for that year," Mr. Rubin said. "They forget about college fit."

Still, other students discover institutions they would have never considered by looking at the rankings. In addition to rating the top institutions, U.S. News & World Report orders colleges by region and outlines institutions alphabetically that offer careers in the military and specialties in business, engineering, and the arts.

And the rankings help promote equity because they afford students who don't receive good high school counseling a wealth of information about, say, regional academic powerhouses, said Jan O'Neil, the chairwoman of the guidance department at the 1,560-student Parkway West High School in St. Louis.

High school senior Allison Rosenthal perceived the U.S. News & World Report rankings to be so important she pulled them off the Internet as soon as they were posted last summer.

"Some people say there's not much difference between schools, but there is," Ms. Rosenthal said. "You graduate with a Harvard degree, and that makes a difference when you get a job."

Ms. Rosenthal, a student at the 1,360-student Mercer Island (Wash.) High School, crossed the University of the Pacific off her list because the Stockton, Calif., institution was listed in the third tier of the U.S. News & World Report rankings.

She instead applied to the University of Michigan in Ann Arbor and Tufts University in Medford, Mass., institutions that rank in the top 50 on the national- universities list.

"I want to get a good education, but I also want [a college] that I can feel proud of," she explained.

Vol. 19, Issue 19, Pages 6-7

Published in Print: January 19, 2000, as Study: College Rankings Affect Aid Packages
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Web Resources
  • As one example of the controversy, here is how the University of Connecticut reacted when it was unhappy with its 1998 USNWR ranking.
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