Money Magazine Unveils New College Rating System

Money magazine has become the Yelp of college rankings. For 2023, Money introduced a new system of assigning stars rather than listing institutions numerically.

Top colleges, based on Money’s calculations, can now earn up to five stars. Unlike Yelp reviews, however, ratings don’t fall below 2.5 stars. Every college evaluated by Money is at least average.

Why the change, and does it matter?

Until this year, Money ranked colleges numerically, much like familiar competitors such as U.S. News & World Report, Forbes, and Washington Monthly.

Yet Money’s rankings have focused primarily on “bang for the buck,” colleges that produce “outstanding results at a comparatively affordable price.” Not surprisingly, leading public universities have fared well under this criterion: Last year, every college ranked in the top 10 was public.

But the 2022 rankings featured an odd twist. Among the 671 ranked colleges were 48 “selective” institutions that were ranked separately. Money opted for this tack “in an effort to highlight colleges that will be an option for a greater number of students.”

That’s why the “best colleges” list didn’t feature mainstays such as Princeton, Harvard, and the Massachusetts Institute of Technology.

“One of the biggest messages behind Money’s rankings [for 2022],” the editors noted, “is that a college doesn’t need to be super selective to be a good investment.”

So the magazine was already moving away from traditional lists pitting apples against oranges.

Enter the 2023 rankings. For this year, Money has entirely jettisoned numerical rankings, choosing instead to rate institutions based on a 5-star system (ratings range from 2.5 to 5 stars).

Money says the new system “recognizes that there are multiple ways for a school to provide value, and multiple ‘best’ colleges, depending on your goals and priorities.”

While explaining its new philosophy, the magazine took a shot at U.S. News for favoring wealthy, private “brand name” universities.

“In fact, college counselors tell us they often don’t have to recommend schools ranked in the top 20 by U.S. News and World Report — the biggest (and most criticized) college ranking — because families come into the search with their eyes already on the nation’s most prestigious colleges,” the editors claim. “Where families need more guidance is toward schools that lack the big-name reputation yet still compete in terms of value.”

Although the rating system may be new, the methodology used to arrive at the results didn’t change much.

Data used in the magazine’s calculations fall into three categories: quality, affordability, and student outcomes.

Quality includes such measures as graduation rates, peer quality (standardized test scores, GPA, and yield), student-faculty ratio, and Pell Grant outcomes.

To gauge affordability, the magazine considers net cost, net price paid by students in different income brackets, average student loan debt, and default rates.

And “outcomes” refers to earnings 10 years after entry (not 10 years after graduating, which seems odd), employment outcomes (including employment and graduate school attendance), economic mobility, and return on investment (ROI).

Some of the number-crunching remains mysterious.

The “quality” criterion includes the “value-added graduation rate,” or the “difference between a school’s actual graduation rate and its expected rate, based on the economic and academic profile of the student body.” Presumably, having better and wealthier students implies higher graduation rates, but even though we know what metrics are used, it’s not exactly clear how the magazine calculates these differences.

Similarly, to assess affordability, the magazine considers what it calls “value-added student loan repayment measures.” Arriving at this stat requires “adjusting for the economic and academic profile of the student body” when evaluating student loan repayment and default figures. Here again, we know the metrics, but the formula remains an enigma.

And under “outcomes,” the magazine adjusts graduates’ earnings based on majors, taking a “weighted average salary for each college” and comparing it with “colleges that graduate students in a similar mix of majors.” We might assume this means outcomes for Amherst College will be compared to those for Williams College and not MIT, yet the process doesn’t appear convincingly scientific.

Using the magazine’s sorting tool, students can list colleges by star rating. Clicking on a college’s name brings you to a page offering additional details and a narrative summary. The website provides a handy drop-down menu featuring all 34 colleges rated at 5 stars, a mix of publics and privates.

Within each star rating, colleges are listed alphabetically. Right next to MIT (acceptance rate 4%, cost of $80,700) is the 5-star Massachusetts Maritime Academy (90% and $31,300). And that’s essentially Money’s main message — high quality can be found in many forms and at many price points.

Money’s revamped system debuts against a backdrop of negative press surrounding college rankings, highlighted by the imbroglio still brewing at Columbia University and boycotts waged by leading law and medical schools.

University officials are retreating from the rankings game. Critics continue to decry their existence. Secretary of Education Miguel Cardona referred to rankings as a “joke.” Even students, once beholden to rankings metrics, have begun to recognize their limitations and potentially misguided mission.

Did Money’s editors adjust their philosophy in light of the rankings zeitgeist?

Kaitlin Mulhere, Money’s higher education editor, told The Chronicle of Higher Education she and her colleagues considered the “cultural and social conversation that’s happening right now around rankings” and wondered if they should be “changing the way that we approach ours because of it.”

Perhaps Money’s tinkering is an attempt to assuage critics and de-emphasize the “beauty contest” aspect of the rankings enterprise. Still, the assumption is that a 5-star college is somehow “better” than a 4-star institution while accounting for the distinct possibility that the latter might be an entirely better fit for a given student and result in a happier and more productive experience.

Despite acknowledging the drawbacks of college rankings, Money remains firmly in that game because, at least for now, there’s still a receptive audience.