We are in dire need of a completely different approach to assessing institutions of higher education. Instead of prioritizing reputation and selectivity, we propose a new rating system known as the Economic Mobility Index (EMI) that attempts to answer the question: “If the primary purpose of postsecondary education is supposed to be to catalyze an increase in economic mobility, which schools are succeeding in that goal?”

New program-level data released from the US Department of Education now allows us to dig below the surface at many institutions across the country to explore what kind of ROI the typical student received from the specific college program from which they graduated.

Just as Wall Street investors use a price-to-earnings ratio to evaluate the value of individual stocks, consumers and lawmakers should similarly be able to assess the return that an individual institution provides to its students before they decide to write huge checks. To capture this sentiment, this paper models a new approach for measuring economic value—a Price-to-Earnings Premium (PEP)—that can be used to get a sense of the amount of time it usually takes to recoup the cost of obtaining a credential at a particular school.

This report examines the differences in loan repayment rates for different slices of student borrowers: those who complete an award or degree and those who never finish.