Last week, President Obama announced his administration's release of the College Scorecard during his State of the Union address and called on colleges to lower costs. "Taxpayers cannot continue to subsidize the soaring cost of higher education," he said. The new tool, designed to help students get the biggest bang for their buck when choosing what college to attend, will transform the college application process for all students, especially minority and first-generation students who graduate with overwhelming student debt.
The latest available data show that more minority students are obtaining bachelor's degrees more than ever before: 15 percent of Latinos, 23 percent of blacks, 60 percent of Asians, and 40 percent of whites have college degrees. However, 67 percent of Latinos and 87 percent of African-American students graduate with more than the average debt of $25,250 and sometimes no job to pay that back. Clearly, future students need the tools to make wiser decisions when they invest their education dollars.
Continuing to improve the college scorecard by providing better information and implementing its use early on in a student's application process will help students in all walks of life translate their education investments into long, fulfilling careers.
Greater transparency between colleges, government, and student-loan lenders
To build upon the scorecard's functionality, greater transparency and information sharing is needed between colleges, government, and student-loan lenders, to give students a clearer picture of the breakdown of how they can pay for each college — be it through scholarships, private loans, or grants. Currently, the College Scorecard shows only the average default rate, average net price, and average borrowing of students at each college.
Students are often in the dark when they evaluate colleges based on cost alone. Some universities have higher tuition but offer more financial aid and scholarships than other institutions.
Additionally, some students are worried that the decline in federal and state funding to higher education will deter them from graduating at all. A recent NerdScholar study found that 25 percent of students would delay college altogether if their financial aid were cut. To enable students to get the biggest bang for their buck, the College Scorecard must provide better information on ways to pay for education.
A more holistic picture of career data
The scorecard gives very little guidance on how to apply to college for first-generation students. Not only do these students have trouble navigating the college application process, they often do not have the best holistic picture of what schools are best for their career interests. Often, first-generation students settle for going to their local university, a default decision that does not always yield them the best career opportunities.
Cheap colleges are not always the best way to go. The Wall Street Journal recently reported that the 10 most affordable colleges have the highest loan-default rates and the lowest graduation rates. Minority and first-generation students would be better served if the scorecard integrated information beyond the average net price and student default rates. Knowing the average earnings of former undergrads at each school and what kind of jobs they get will help prospective students make better decisions.
Using the College Scorecard early
To get the most out of the College Scorecard, students need to start using it early in their high school years. We look forward to seeing the Education Department put the tool in the hands of students early on, through advocates' websites, guidance counselor's offices, and college websites.
The scorecard cannot answer all of minority students' questions, but it provides a strong starting point to help them understand the factors they should consider when choosing where to invest their money. Most minority and first-generation students borrow to attend college. Latinos borrow an average of $22,886 and African-Americans borrow about $28,692.Using this tool to become a more informed consumer will hopefully lower the debt that they have to take on.
All in all, the president's commitment to helping combat rising higher-education costs and student-loan debt with the release of the College Scorecard is a solid start to help yield a brighter future for our country's growing diverse students and the nation's economic prosperity.
Laura Pereyra is a communications analyst for NerdScholar, which empowers students to make better decisions about their higher-education investments, including scholarships for Hispanics. Follow NerdScholar on Twitter or Facebook.