This morning in his weekly address, President Obama made an important announcement.

YouTube video

Today the Department of Education launched a new College Scorecard to provide families and prospective students with useful data on the outcomes of investing in a college education. The President addressed not only why this is important, but how it will help.

Daniel Luzer at College Guide walks us through the original proposals the administration put forward in this area and the political challenges they faced in getting this small step in the process done. And Robert Kelchen gives us a peek inside some of the data (including great charts) that is available and how it will be useful not only to students, but to researchers. Here’s how he describes some of the key data elements that are available:

* Transfer rates: The percentage of students who transfer from a two-year to a four-year college. This helps community colleges, given their mission of transfer, but still puts colleges at a disadvantage if they serve a more transient student body.

* Earnings: The distribution of earnings 10 years after starting college and the percentage earning more than those with a high school diploma. This comes from federal tax return data and is a huge step forward. However, given very reasonable concerns about a focus on earnings hurting colleges with public service missions, there is also a metric for the percentage of students making more than $25,000 per year…

* Student loan repayment: The percentage of students (both completers and non-completers) who are able to pay down some principal on loans within a certain period of time.

As publisher of The Other College Guide: A Roadmap to the Right School for You, the editors of the Washington Monthly have been advocating for the collection and dissemination of this kind of information for a long time now. This morning’s announcement is very welcome news indeed.

I am struck by how well this fits into President Obama’s pattern of incentivizing reform.

Rather than a top-down command-and-control process where the leader prescribes the changes that are necessary, a pragmatic leader identifies the outcomes that are desired and then incentivizes the system to change itself from the bottom up.

At this point, the incentives for change come when/if students and families actually use this information to make decisions about where to make investments in a college education. So let’s get the word out about this new tool that can help them make an informed choice.

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