Personalization and Context Must Be Central to Any Effective College RatingNick Ducoff | Founder and CEO, Edmit
Annual college rankings provide students with a list of “best” (and “worst”) postsecondary institutions, rewarding institutions for decision-making and achievements. Unfortunately, for the most part, rankings are not based on factors that have significant bearing on student success and do not deliver the kind of consumer information most prospective learners need to make informed decisions. In this interview, Nick Ducoff reflects on the areas where popular college rankings miss the mark when it comes to serving learner needs and shares his insights on what an ideal college rating mechanism would look like.
The EvoLLLution (Evo): How valuable are college rankings as a mechanism to help students find the right college or university?
Nick Ducoff (ND): College rankings shouldn’t be ordinal. They should be personalized. There’s no universal best college and, honestly, I don’t think there’s even a single best college for any individual either. There are colleges where students are more likely to graduate from on time and with student loans that they can afford to pay back—and that’s where we should focus.
Evo: What minimizes the value of most ranking systems?
ND: I’ll focus on the U.S. News and World rankings because those tend to be the most widely accepted ranking source for colleges and universities. Within that ranking, undergraduate academic reputation is 20 percent worth of the score, even though it’s really a popularity and favor-trading contest. And this won’t make me any friends, but I would say Faculty Resources, also worth 20 percent of the score, is a close second.
We should be looking at efficiency, not expenses. Expenses are how universities get in trouble. At Edmit we’re actually building a model to look at which colleges are on an unsustainable path. Counterintuitively, by U.S. News rankings, raising expenses would be scored positively. If a university is spending more on faculty, that’s considered a positive weight. We, on the other hand, are looking at whether schools actually have the money to spend at the rates they’re spending.
Evo: Why is efficiency a marker of a strong institution?
ND: Improving efficiency is the best way to reduce costs, which is the direction our industry should be moving—despite the fact that we seem to be consistently raising the cost of higher education.
If we’re going to reduce the cost of higher education, the savings need to come from somewhere. Unfortunately, few universities have much margin to work with, so it’s not just a matter of capturing surplus margin.
For most universities, the fact is that they have unsustainable cost structures. So I’d love to see more universities look at how can they efficiently educate and graduate students that go on to get jobs. We’re seeing new models emerge at innovative institutions like Southern New Hampshire University and Georgia Tech, where they are developing interesting models that deliver truly affordable education while also creating efficiencies.
Evo: Does developing an efficient model require a massive shift in how the institution operates?
ND: Both the schools I just mentioned—SNHU and Georgia Tech—still have very traditional core businesses. They started evolving at the edges and then they brought that innovation to the core over time.
Harvard’s doing the same thing. HBX CORe—which they recently rebranded as Harvard Business School Online—is a perfect example. And think about what a shift that represents! Ten, or even five, years ago it was unimaginable to associate the core Harvard brand with online. And now HBX CORe has become so successful that they’re proud to put their brand on it. You can only imagine what that’s going to mean for the core HBX experience—and perhaps in time even the core college experience at Harvard. If Harvard can do it, everyone can do it.
Evo: What do students need to take into account when they’re seeking out the ideal institution for them?
ND: It comes down to two factors: Affordability and value. Given a particular student’s means, can they afford the cost? That doesn’t just account for tuition, it covers room and board, living expenses, books and supplies, all the hidden and advertised costs of a postsecondary experience.
In many cases college can be an incredible investment but if you are going to stretch and take a loan out, you just want to make sure it’s worth it and that’s where the value comes in. Calculating value takes into account things like earning potential, graduation rates, etc.
Some of those concepts are included in current rankings, but they’re not connected in the kinds of ways that are included in evaluations of other major investments.
Evo: Who needs to take the lead to begin making critical consumer information available to students so they can conduct contextual college searches based on their priorities?
ND: As a market economics, I’m a fan of incentives. If you think at accreditors, the federal government and universities themselves, they don’t have the right incentives to put the customer first. This is not to say that any party is nefarious in any way, but there’s no push.
This is why the Commonwealth of Massachusetts is putting together its own consumer protection initiative for failing colleges. After all, the board of Mount Ida College even said that they had a fiduciary responsibility to the university and not to its students! It creates an opportunity for an independent, profit-motived consumer information site—the kind we’ve seen in almost every industry, whether it’s TrueCar in auto sales or Zillow in housing or Morningstar in equities. There are countless examples of companies that have created really effective models that help people evaluate these major life purchases, but I haven’t really seen that in the higher education space.
Evo: How would you like to see published consumer information and protections evolve in the postsecondary space?
ND: We have to start delivering personalized guidance. Of course, if it’s personalized on these dimensions, you’re having to ask people for sensitive information, some of which they would put into FAFSA. And in order for a customer to give that sensitive information to you, they must trust you.
When it comes to who needs to move this forward, I think it has to be someone who really has the consumer’s interest in mind and I think the best way to do that is having a profit motive. After all, that only works if you’re doing what’s right for the customer. If it’s anything other than that, ultimately, it will fail.
This interview has been edited for length and clarity.
Author Perspective: Business