AAEA’s Assessments on CAR are Confirmed by the US Higher Ed and the Regulator

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Based on our earlier research and analyses (about two months ago), we have said that the CAR will affect smaller colleges and it may impact economically disadvantaged students as well (for detailed, please click here and here).  These research findings and our assessments have been confirmed during a conference call between the US Secretary of Education and reporters as published in an article in Chronicle Journal of Higher Education on November 5, 2013 (please click here to read the whole article). Basically there are three points raised by the education institutions on the application of CAR. (1).  Data aren’t good enough to calculate the rating; (2). Ratings will penalize colleges that serve the neediest students; and (3).  Ratings will punish colleges and students for factors they cannot control.  Regardless of the comments, one thing for sure will happen is that the CAR regulation will make colleges to operate more efficiently.

AAEA has contributed to find the way-out on such delicate issues.  Our further comments on the four variables are as follow:

  1. The first three variables are justifiable (average tuition, graduation rate and average student debts) to be used.  Apply either the State mean or median number in the past ten-years to calculate and create the benchmark to assign the CAR ratings.  This number will be lower than using the most current years in calculating the median or the average.  Therefore, it will work in favor of higher education institutions and no one will get punished.
  2. Average tuition and student debts can be calculated based on the past ten years, and factor in inflation in the calculation (adjusted using hepi_scalar_2010 variable) i.e., use the real price instead of the nominal price.
  3. Applying ten years past graduation rate will answer questions from those colleges with lower success rate.  Logically, if the average graduation rate is flat in the past 10 years, perhaps nothing can be done in the next 10 years either.
  4. The average earning of graduates number will be difficult to use.  If it does, it surely will create unending, unnecessary and unproductive discussions.  Especially from those colleges who negatively impacted from the CAR new proposed regulation.

From reading the article, one may notice that some institutions start
worrying and whining about the CAR
.

Please tell us what you guys think? Should the regulator backs down?