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By Stephen Stromberg

The Washington Post

Government invests a lot of money in higher education every year: $150 billion in federal student financial aid alone, plus $70 billion from states. So, President Obama proposed Thursday, government should make sure that taxpayers are getting good value for their money instead of paying schools based simply on how many needy students they enroll.

It's a good idea. Except ... well, I'll let the president explain why this could be pretty hard.

"Today, I'm directing Arne Duncan, our secretary of education, to lead an effort to develop a new rating system for America's colleges before the 2015 college year. ... I think we should rate colleges based on opportunity. Are they helping students from all kinds of backgrounds succeed? And on outcomes, on their value to students and parents.

"So that means metrics like: How much debt does the average student leave with? How easy it is to pay off? How many students graduate on time? How well do those graduates do in the workforce? Because the answers will help parents and students figure out how much value a college truly offers."

Once the rankings have been in place for a while, Obama continued, Congress should tie student aid funding to how well colleges and universities score.

The concept is worthwhile. But Washington Post columnist Ezra Klein rightly points out that some of the criteria Obama mentioned might give certain schools an advantage for the wrong reasons — rewarding those that, say, pump out high-earning graduates rather than teachers. In fact, as Obama indicated, the problem is bigger: Colleges might try to manipulate the system.

"Right now," the president said, "private rankings like U.S. News and World Report puts out each year ... encourage a lot of colleges to focus on ways to, how do we game the numbers."

Obama probably meant to argue that Education Department rankings would counterbalance some of the perverse incentives that the U.S. News rankings provide schools. But he accidentally made a broader point about the whole college-rankings enterprise: It's hard not to introduce perverse incentives into the system, particularly when a lot of cash is on the line.

It would make a lot of sense if the government starts using, for example, graduation rates as a key metric of college success. But that would also encourage colleges to lower standards in ways that are hard to quantify in a ranking scheme.

James Kvaal, deputy director of the Domestic Policy Council,said Duncan would look at what data is available and might be used in the ratings.

But the desirability of the initiative won't be clear until Duncan identifies the metrics he will use to judge schools.

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