Yesterday, in writing about the latest college rankings scandal on my college blog, I mentioned that the institutional pursuit of college rankings glory, has hurt millions of students in ways they can’t even imagine. Today I want to elaborate on that observation.

If you missed yesterday’s post, here it is:

Colleges and Universities That Cheat

Millions of students are adversely impacted by the rankings competition because of the actions of the audience that cares most deeply about the numbers – college presidents and their boards of trustees, and by extension, their admission offices. For these folks, US News has provided them with an easy (though deeply flawed) scorecard to measure how their institutions are faring and they are distraught if their school’s ranking stalls out, or worse, drops.

What the Rankings Don’t Measure!

Perhaps aggressive pursuit of higher rankings wouldn’t be a bad thing if the rankings actually measured what sort of job a college or university was doing to educate its undergrads. One of the perverse aspects about the rankings is that turning out thoughtful, articulate young men and women, who can write cogently and think critically won’t budge a school’s ranking up even one spot. Curiously enough, U.S. News doesn’t even attempt to measure the type of learning going on at schools.

Unfortunately, the methodology fueling the rankings are a collection of subjective measurements that students and families are supposed to rely upon to pinpoint the schools doing the best job of educating undergraduates. U.S. News relies on proxies for educational quality, but these proxies are dubious at best.

 Colleges Behaving Badly

Here are just three of the ways that the rankings hurt students and their parents:

1. Rankings encourage colleges to favor affluent students.

Many teenagers end up as collateral damage in the rankings race because schools that are more selective are rated higher, which encourages them to accept more wealthy students. US News awards schools which generate higher test scores and grade point averages from their freshmen. This focus on selectivity has been a boon for affluent high school students, who tend to enjoy better academic profiles. These teens can afford expensive test-prep courses and are more likely to have attended schools with stronger academic offerings. There is a strong positive correlation between standardized test scores and family income.

Before the rankings became so prominent, rich students typically had to pay full price for college. The majority of grants were reserved for middle-class and low-income students, who required financial help. But with the rankings premium linked to top students, private and public institutions began offering merit scholarships to entice smart, wealthy students to their campuses rather than to their competitors. How do you cough up the money for these deal sweeteners? One way is to raise the tuition price to generate extra revenue for these scholarships and another way is to reduce the financial aid to needy students.

The only schools that don’t offer merit scholarships to rich students are the institutions that don’t have to. Wealthy parents whose children get into Harvard or Swarthmore will be happy to write checks worth a quarter of a million dollars or more. The most elite schools boast that they reserve their aid to the families who need financial help to attend college, but most of these institutions offer admissions to a shamefully low percentage of needy students.

2. Rankings encourage admission tricks

US News’ algorithm also favors schools that spurn more students. To increase their rejection rates, some schools will court students through marketing materials and social media that they have no intention of accepting. Here’s another trick: some institutions have made it easy for students to apply via streamlined online applications, which are referred to in the industry as “fast apps.” Schools use this strategy to increase the size of their student body, as well as bump up their rejection rates.

3. Rankings encourage debt.

Sadly, what the rankings giant ignores is how much debt students are incurring at their schools. It’s a terrible omission that is certainly one reason why college tuition continues to defy inflation. US News rewards schools that spend freely and the rankings juggernaut doesn’t care if that requires universities to boost their prices and graduate students with staggering debt.

I wrote a longer post about this phenomenon last year for my CBS MoneyWatch college blog. Here is the link:

Blaming College Rankings for Runaway College Costs

Malcolm Gladwell wrote a fascinating article for The New Yorker last year on college rankings in which he talked about the incentive of institutions to turn their campuses into lavish palaces and stick the bill with the kids:

Finally, I’d urge you to read an article in the Washington Monthly that focuses on George Washington University, one of the countless schools that’s been guilty of this bad behavior. Here is the link:

The Prestige Racket

Read more on The College Solution:

Yawn, Harvard is No. 1 University, But Who Is Always No. 3?

Why US News’ College Rankings Are a Joke

Lynn O’Shaughnessy is the author of The College Solution and She also writes a college blog for  CBSMoneyWatch and US News. Follow her on Twitter.

Join Me at My College Workshop on Saturday!

There are a few slots left for the college workshop that I will be  holding at the University of California, San Diego this Saturday (Feb. 4). At the Finding the Right College Workshop, you will learn specific strategies to increase your child’s admission chances, ways to evaluate colleges and universities, essential ACT and SAT information and, yes,  what you need to know about  college rankings!

You can learn more here and sign up for the workshop here.

Claremont McKenna College recently announced that it had been sending inflated SAT scores to US News since 2005.

According to news accounts, the vice president and dean of admissions admitted inflating the scores and resigned. The college’s critical reading scores were inflated by an average of 17 points and the math scores were bumped up by an average of 10.5 points.   Here is where you can find a detailed explanation of the manipulation.

Other Colleges Being Deceitful

Claremont McKenna is hardly the only school that has fudged, or in some cases, falsified its numbers. Baylor University, for instance, essentially bribed its incoming freshmen one year into retaking the SAT. The freshmen were already admitted to Baylor so there was no reason to revisit the test. Baylor’s stunt, which managed to boost the school’s average SAT score by 10 points, triggered a huge outcry.

The U.S. Naval Academy was embarrassed when it became public that its applicant rejection rate wasn’t nearly as high as the institution was reporting. At an industry conference, a Clemson University administrator shared a laundry list of ways that her institution was manipulating its figures to boost its college rankings. What prompted gasps from the audience was the administrator’s observation that Clemson rated all other schools in US News’ survey as below average to make it look better.

Schools also falsify the number of their full-time faculty. I did a story in 2009 for my college blog at CBS MoneyWatch that illustrated that schools, in this case the most elite of institutions, gave US News the wrong figures on the percentage of its faculty who were full-time. Here is an excerpt:

You can read my entire post here:  Are Ivy League Schools Fudging Their Numbers?

Despite what US News, which isn’t even a magazine anymore, might suggest, colleges and universities are on the honor system when submitting data.  In a New York Times article yesterday, Robert Morse, who heads up US News’ rankings operation, said he has a team of four to six people reviewing the data. Hmmmm. Really Bob? Really?

Here’s the Real Scandal

In my opinion, the biggest news isn’t that schools are obsessed with looking better in the rankings, but what the rankings have done to our higher-ed system. In pursuit of rankings glory, schools across the country have adopted policies about how they spend their money, whom they admit, and what kind of financial aid they distribute that have negatively impacted millions of American families. Now that’s the real scandal!

I’ll write more about this tomorrow.

Lynn O’Shaughnessy is the author of The College Solution and She also writes a college blog for  CBSMoneyWatch and US News. Follow her on Twitter.

Join Me at My College Workshop on Saturday!

There are a few slots left for the college workshop that I will be  holding at the University of California, San Diego this Saturday (Feb. 4). At the Finding the Right College Workshop, you will learn specific strategies to increase your child’s admission chances, ways to evaluate colleges and universities, essential ACT and SAT information and what you need to know about  college rankings.

You can learn more here and sign up for the workshop here.

Many families worry that their college savings accounts will kill their chances for financial aid.

It’s been my experience that it’s usually dads who get stressed out about how colleges will treat their college accounts for financial aid purposes. Some fathers whom I’ve talked are down right bitter. They are especially incensed at the possibility that families that didn’t set aside money for college will hog all the aid.

If that’s what you’re worried about, here’s my advice: Relax!

Families who save for college are rarely ever hurt in student financial aid considerations. In fact, it’s been estimated that fewer than 4% of families who fill out financial aid applications are penalized for their savings.

Why Your Savings Won’t Hurt Financial Aid Chances

Here are the two biggest reasons why saving money shouldn’t hurt your financial aid chances:

1. Colleges don’t care how much you saved for retirement.

The Free Application for Federal Student Aid (FAFSA), which anyone applying for financial aid will complete, doesn’t even inquire about retirement accounts. Private colleges that use the CSS/Financial Aid PROFILE, will inquire about a family’s retirement accounts, but schools that use the PROFILE very rarely penalize parents for these assets.

2. Parents can also shelter plenty of money outside of retirement accounts.

It might not seem like it, but colleges don’t want to strip you of all of your available cash. The financial aid formulas will also let you shield a big chunk of your non-retirement money through an asset protection allowance.

As you can see from the federal chart below, how much you can shield from the FAFSA formula depends on the age of the oldest parent. The closer the parent is to retirement age, the greater the amount he/she can shield from the financial aid formula.

Let’s say the oldest parent is 52. The family would be able to shield $49,200 in 529 savings plan money, as well as any other cash laying around in taxable accounts such as savings, checking and brokerage accounts. In a two-parent household, a 60-year-old parent could shelter $61,400 from financial aid calculations.

The amount a mom or dad could shelter in a one-parent household is significantly less. A 52-year-old single parent, for instance, could shelter $16,700.

Asset Allowance Illustration

Using an example should make it easier to see how this allowance would work. Let’s assume that a family has $100,000 in non-retirement assets, including $25,000 in a 529 savings plan, and the oldest parent is 55.

The family would get to shield $53,400 from the FAFSA formula, which would leave $46,600 unprotected. In calculating the family’s financial need, the FAFSA methodology wouldn’t expect the parents to sink all of that money into college. Consequently, the $46,600 in assets would be assessed at a parental rate of 5.46%. When you do the math, the child’s eligibility for need-based aid would only drop by $2,628 even though the family had $100,000 in the bank.

Knowing this, would you rather be a family who saved nothing for college or the family who has $100,000 in the bank? Obviously, it’s always better to save money, whether it’s for college or retirement. Do so and you’ll enjoy more options.

For parents who do have money to shelter from the federal aid formulas, 2012 did usher in some bad news. The amount of money that parents can protect has dropped. Last year, for instance, you could shelter $60,200, but the figure dropped to $53,400 this year. You can find the EFC Formula by Googling EFC Formula and 2012. You’ll find the right  chart on page 19.

Note:

When I have written about this before, some parents have believed that they subtract their asset protection allowance themselves before reporting their taxable assets on the FAFSA. Do not do this! The federal processing software automatically does this when determining what you EFC is.

Have Questions for Duke’s Financial Aid Director?

On Thursday at noon Eastern Time, Duke University’s director of financial aid will take viewer questions about paying for college. The conversation will include President Obama’s remarks in the State of the Union about student debt. Anyone can watch the webcast at no charge at http://ustream.tv/dukeuniversity. Questions can be emailed before or during the broadcast to live@duke.edu or tweeted with the tag #dukelive.

Lynn O’Shaughnessy is the author of The College Solution and She also writes a college blog for  CBSMoneyWatch and US News. Follow her on Twitter.

Join Me at My College Workshop on Saturday!

I will be holding a college workshop at the University of California, San Diego this Saturday (Feb. 4). At the Finding the Right College Workshop, you will learn specific strategies to increase your child’s admission chances, ways to evaluate colleges and universities, essential ACT and SAT information and what you need to know about  college rankings.

You can learn more here and sign up for the workshop here.

Read more on The College Solution:

How Hard Is It To Get Into College?

Qualifying for Financial Aid: How Wealthy Is Too Wealthy?

Don’t Fall for These 4 Financial Aid Myths

Many of the biggest misconceptions that people have about the college process revolve around financial aid. Now that we’re in the midst of financial aid season, I wanted to share  four  financial aid myths that are probably the most common.

1. I make too much money to qualify for financial aid.

You shouldn’t automatically assume that you won’t qualify for need-based assistance. How much income you earn is only one part of the equation. What also matters is the price of a particular college. For example, some families that don’t qualify for financial aid at moderately priced state schools may be in line for considerable help at pricey universities.

At Princeton University, for instance, families making between $160,000 and $180,000 qualified recently for an average of $26,450 in financial aid.

You can obtain an early assessment of whether your family might qualify for aid by using a free financial aid calculator. The calculator will produce an estimated Expected Family Contribution, which is what colleges would expect you to pay, at a minimum, for one year of school.

Here is the EFC calculator on the College Board website that I like to use.

Of course, you should ALWAYS use a net price calculator when evaluating your chances for need-based financial aid or merit aid for affluent students at specific  schools. See my previous post on this topic:

Playing Hide and Seek With Net Price Calculators

2. My home equity will kill my chances for aid.

Most colleges won’t care if you own a house and won’t count home equity against you if you do. That’s because the majority of schools rely on the federal aid application, the Free Application for Federal Student Aid (FAFSA), which doesn’t even ask parents if they own a home.

Colleges that use an additional form, the CSS/Financial Aid PROFILE , will inquire about a family’s home equity. With rare exception, however, these colleges will limit the amount of home equity they consider when they evaluate a family’s ability to pay. Colleges will typically impose a cap that rarely exceeds 2.4 times a family’s income, according to Paula Bishop, a smart CPA in Bellevue, Wash. who assists families with financial aid issues.

Here is the list of the 249 colleges and universities that use the PROFILE.

3. I have saved too much in my child’s college fund to qualify for aid.

In reality, less than 4% of American families who apply for financial aid are penalized for their savings. My post tomorrow will delve into this topic.

4. Completing financial aid forms is a waste of time.

Most families should complete financial aid applications, because without filing these documents, they will have no hope of receiving need-based aid nor will they be able to obtain federal college loans.

The FAFSA became available on January 1 for the 2012-2013 school year. The application should not take long if you gather the necessary documents before you sit down at your computer. You can find out what information you’ll need to complete the FAFSA by checking out the FAFSA on the Web Worksheet in advance.

The latest PROFILE is available every fall. While the FAFSA is free, the PROFILE costs $25 for the initial application and college report, and all additional reports are $16 each. Some low-income families will be eligible for fee waivers.

Join Me at My College Workshop on Saturday!

I will be holding a college workshop at the University of California, San Diego this Saturday (Feb. 4). At the Finding the Right College Workshop, you will learn specific strategies to increase your child’s admission chances, ways to evaluate colleges and universities, essential ACT and SAT information and what you need to know about  college rankings.

You can learn more here and sign up for the workshop here.

Lynn O’Shaughnessy is the author of The College Solution, an Amazon bestseller, and a workbook, Shrinking the Cost of College. Follow her on Twitter and Facebook.

I wrote a post for my CBS MoneyWatch college blog on Friday that blew out Antioch College’s server.

How did I do that? Actually, it wasn’t me. I was just the messenger for the liberal arts college that had a dramatic announcement to make.

For the next three years, Antioch College in Yellow Springs, OH, is offering all its incoming students full-ride tuition scholarships. With this year’s tuition valued at $26,500, each four-year scholarship is worth at least $106,000. It doesn’t matter what your family’s income is, every accepted student will get the same deal.

The offer will be even better for some students, who file for financial aid and can’t afford the room and board, which is currently $8,628.

Why?

Obviously, when you write that a college is handing out six-figure scholarships to all its students, it attracts a lot of attention. So what is the catch?

As I mention in my CBSMoneyWatch post, Antioch, which was founded by abolitionists in 1850, is crawling out of the grave.

Thanks to horrifically poor management, the liberal arts college shuttered its doors in 2008. Loyal alumni went ballistic and their donations helped to bring the school back to life. The reborn school’s first class (35 students) showed up last fall and Antioch is in the process of taking applications for the next crop of freshmen. Antioch is aiming for 65 to 75 new students in the fall and hopes to have about 300 enrolled students by 2015.

If you’re interested in applying to Antioch, it’s not too late to apply. The admission deadline is Feb. 15.

Don’t Believe Everything You Read

Antioch College is one of the 40 colleges that the late Loren Pope, a former New York Times education editor and college counselor, wrote about in his classic book, Colleges That Change Lives: 40 Schools That Will Change The Way You Think About Colleges. Pope wrote the book, which has been incredibly popular for many years, after becoming an unabashed and tireless champion of liberal arts colleges.

The last edition of Colleges That Change Lives is outdated — the most recent version came out in 2006. I thought it was unfortunate and embarrassing that the book was praising Antioch after its (temporary) demise. Pope should have known before updating his book that Antioch had been in what one alumni called a “slow-motion decline” for many years. Here is one graduate’s harrowing account  of Antioch College’s demise.

In my own book, The College Solution (the second edition will be coming out this spring!), I used Antioch’s press coverage to illustrate that you can’t believe everything you read about a college. (That advice applies to college rankings too!) For instance, months before Antioch folded, US News  & World Report‘s Best Colleges guide singled out Antioch for its small class sizes (the school had very few students left!) and its “outstanding” internship program.

Colleges That Change Lives

While Colleges that Change Lives is outdated, I do think that it is a wonderful book to get a sense of what liberal arts colleges are all about. Coincidentally, my two children happened to attend schools that are featured in the book — Beloit College and Juniata College. The 40 colleges profiled in the book formed an organization, Colleges That Change Lives, and you can find information on all these school on its website.

As a group, the CTCL colleges make appearances throughout the year;  here is the link to where the schools will be holding events in 2012. I counted appearances in 22 cities.

Lynn O’Shaughnessy is the author of The College Solution, an Amazon bestseller, and a workbook, Shrinking the Cost of College. Follow her on Twitter and Facebook.

More from The College Solution:

Measuring the Generosity of Colleges

The Colleges Where PhD’s Get Their Start

Financial Aid: Bait and Switch

What schools produce the most undergraduates who end up heading off to graduate school?

The subject came up yesterday because a friend of mine was telling me about a brilliant teenager who wants to eventually get a PhD in physics. The student lives in California, but the mom wants him to apply to schools in the Midwest where she grew up.

I asked my friend if the teenager had checked out Lawrence University.

“Huh?”

I realize that might be your reaction, but here’s the thing – many of the schools that are feeder institutions for the nation’s PhD programs are liberal arts colleges. While most liberal arts colleges are not well-known among families with teenagers, these institutions — and their reputations — are very well known to graduate schools. Lawrence University, a liberal arts college Appleton, WI, for instance, happens to be 10th on the list among all four-year colleges and universities that produce, per capita, the most physics PhDs. (See chart below.)

PhD Feeder Schools

I bet most families assume that attending a public flagship university or a nationally-known private research university is the best ticket to graduate school. If you look at the following lists of the most successful PhD feeder schools for different majors, you will see a somewhat different story. Not a single public university makes any of the lists. The entire Cal State system, however, is considered the No. 1 producer of humanities PhD’s.

I thought you’d be interested in the list of undergraduate institutions that, per capita, produce the most PhD’s. I pulled the names off the website of  Reed College, a liberal arts college in Portland, OR, that is understandably proud of its impressive record of turning out undergrads who end up earning PhD’s. The statistics cover the years 1997 to 2006 and come from the National Science Foundation and the federal government’s education database.

On the list of schools that have the most undergrads who ultimately earn a PhD  in all disciplines, Reed comes in No. 3 behind Cal Tech and Harvey Mudd College.

As you’ll see in the first column below, seven of the 10 schools, whose graduates earn the most PhD’s by the percentage of students are liberal arts colleges.

Bottom Line:

Students can increase their odds of being accepted to graduate school if they earn their bachelor’s degree at a liberal arts college. On a per capita basis, for instance, liberal arts colleges produce twice as many students who earn a PhD in science than other institutions. That makes sense since students have more opportunities to work closely with their professors, they can actually learn more due to small classes and receive glowing recommendations from their teachers, many of which, graduated from prestigious graduate programs.

What’s even more remarkable about the prominence of liberal arts colleges on the science lists is this: many students major in other disciplines at liberal colleges while students who attend schools like Cal Tech and MIT overwhelmingly expect to pursue careers in the sciences and engineering.

I’ve attached a lengthy essay by Thomas R. Cech, a Grinnell College grad, Nobel Laureate and chemistry professor at the University of Colorado, who wrote a fascinating essay contrasting the science experience for undergrads at colleges versus universities. Cech believes science majors at liberal arts colleges enjoy an advantage over undergrads who attend universities. Here are Cech’s thoughts:  Science at Liberal Arts Colleges: A Better Education?

Read more on The College Solution:

50 Schools That Produce the Most Science and Engineering PhDs

The Shocking Truth About Graduation Rates

Getting Bad News From Johns Hopkins

Lynn O’Shaughnessy is the author of The College Solution, an Amazon bestseller, and a workbook, Shrinking the Cost of College. Follow her on Twitter and Facebook.

My Upcoming College Workshop:

I will be holding my next two college workshops at the University of California, San Diego on Jan. 28 and Feb. 4. At the workshops — you can sign up for one or both – I aim to share with you ways to help you make smart decisions about picking colleges and making them more affordable. You can learn more here and sign up for the workshops here. Lynn O’Shaughnessy