New yardstick: Making colleges more accountable

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(MoneyWatch) Beyond superficial information, many parents know little about the colleges and universities that their children seem keen to attend.

They might know how good a school's football team is, whether the food in the cafeteria is edible and how many students attend, but they often know little about things that truly matter.

Whether they know it or not, what American families need is greater transparency when they are exploring schools. On Wednesday the federal government struck an initial blow for transparency by unveiling its College Scorecard, which President Obama touted in his State of the Union Speech.

With this new federal College Scorecard, parents and students will be able to look at statistics for a school in these five areas:

  • School's net price after typical scholarships and grants subtracted.
  • Graduation rate.
  • Loan default rate.
  • Median college loan debt.
  • Employment.

It's a start

The federal government should be applauded for compiling figures in one spot that families should be checking, but there is much more to do.

The new scorecard, for instance, only shares the six-year graduation rates of institutions. Do you know any parents who want their children to stay in college that long? The scorecard needs to also include four-year graduation rates

You should also know that at private and public colleges and universities respectively just 52.5 percent and 31.3 percent of students manage to graduate in the traditional eight semesters. Anybody else consider these statistics appalling?

The section on median loan amounts only focuses on federal student loans that impose a cap on borrowing amounts. The maximum that most students can borrow through federal college loans is $27,000. It would be helpful to see the loan totals for students and parents who borrow through the federal system and via private college loans.

Finally, the employment section seems to consist of the federal government asking families to inquire about job track records with individual schools. The time will come when job statistics will not be confined to anecdotal accounts, but we are not there yet.

Bottom Line:

Perhaps the most valuable service that the federal College Scoreboard provides is that it will prompt more families to ask important questions. And that will be a very good thing.