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There is an ambitious proposal by our president to compare value among colleges with identical missions through new rating system that is linked to allocations of college financial aid.

In high rated colleges that are awarded with incentives for enrolling recipients of Federal Pell Grants, larger grants would be allocated to students from lower income group. Pell Grant is offered for students who are below the poverty line and whose family income is below $50,000. 

Graduation rates, income after graduation, unemployment rates and percentage of graduating students with debt that are at manageable levels are some of the outcome, affordability and college access measures that will determine the new ratings.

Colleges will be rated especially to provide parents with valuable and clear information on value, quality and affordability of colleges. This in turn will help them decide on where to enrol their children making an informed decision. Colleges will also be motivated to take steps to enhance performance.

So, what does this mean for the low-income students? There is no doubt our President wants to encourage colleges to take in more low-income students and help them graduate. Will this actually happen? An analysis of the graduation rate and money relationship shows otherwise.

If you look at it carefully, there will be no necessary increase in the number of students receiving college degrees just by providing more funds through grants for colleges with better graduation rates.

There is no doubt that graduation rates can be improved by providing colleges with more funds. At colleges with already high graduation rates, there is minimal room for improvement. And then there are those elite colleges where student success ranks lower than money in terms of priority.

Careful analysis shows that while students who get more money will be benefitted; those who lose funding will be severely harmed.  When students lose funding at the less selective colleges, there can definitely be no major improvement in the percentage of students obtaining college degrees.

An efficient alternative would be to ensure greater improvement in the outcome of high risk students as compared to already successful wealthy students by providing them with grants even though they may be expensive.

It is clear that there will be a gradual reduction in the number of graduating students from colleges that enrol at-risk students which will significantly offset the slight improvement in the elite institutions graduation rates if funding is shifted to high-performing schools from low-performing ones.

As compared to adding more value, demographics will start driving outcomes. Rather than through addition of value, selective colleges that perform great will do so through aggregation of talented, low-risk students.

Geographic ties will further constrain migration of high risk students to top performing colleges. Greater demand cannot be addressed through increased enrolment by colleges due to capacity constraints. Another problem we face is that in spite of adding generous financial aid policies, most colleges focus more on research and education than on admitting low-income students.

Moving forward, if our President’s proposal comes into effect, access to college for high-risk students will drastically decrease and this is certainly not what our country wants right now.