NASFAA To Policymakers: Take Caution In Comparing Institutions of Higher Education

Contact: Beth Maglione
VP of Communications
(202) 785-6944

New Policy Brief Highlights Challenges in Grouping, Comparing, and Rating Peer Institutions 

March 5, 2014 -- A new policy brief “Peers In PIRS: Challenges & Considerations For Rating Groups Of Postsecondary Institutions” focuses on the challenges associated with grouping and comparing peer institutions under the Obama Administration’s proposed college rating system. 

A number of key elements in the Obama Administration’s proposed college rating system—known as the Postsecondary Institution Ratings System, or PIRS—have yet to be defined, as policymakers continue to seek input from the higher education community.

According to the Department of Education (ED), President Obama will seek legislative changes to the Higher Education Act to ultimately link student financial aid to institutional outcomes such as the percentage of students receiving Pell Grants, average cost of attendance, student loan debt, graduation rates, and/or transfer rates. A 2013 White House fact sheet noted that the ratings would compare colleges “with similar missions,” but did not provide details on how colleges would be grouped. 

The Department of Education has been tasked with developing and publishing the new college ratings system by the 2015-16 award year, but legislative changes would be needed to change how federal student aid is allocated. 

“Having an accurate picture of student outcomes at similar institutions is a worthy goal,” said NASFAA President Justin Draeger. “But this must be done thoughtfully lest we do more harm than good. We know that comparing institutions—even those with seemingly similar missions—is not as simple as it appears. Our research shows that student demographics and needs vary widely, even at schools with very similar missions.”

To dig deeper into the challenges, NASFAA’s brief uses institutional case studies to illustrate some of the differences and similarities among colleges and universities in three states. It makes the case that any postsecondary outcomes need to be “corrected” for various inputs, such as the characteristics and backgrounds of entering students, and provides examples that speak to the feasibility of “mission” as a peer-group identifier. 

“Financial aid administrators embrace institutional responsibility to help students gain access to and succeed in higher education,” said Draeger. “We look forward to working with the Obama Administration to ensure that whatever is released by ED truly provides students and parents with useful information.”

To speak to a NASFAA spokesperson about this policy brief or the PIRS initiative, please email or call (202) 785-6944.


The National Association of Student Financial Aid Administrators (NASFAA) is a nonprofit membership organization that represents nearly 20,000 financial aid professionals at approximately 3,000 colleges, universities, and career schools across the country. NASFAA member institutions serve nine out of every ten undergraduates in the U.S. Based in Washington, DC, NASFAA is the only national association with a primary focus on student aid legislation, regulatory analysis, and training for financial aid administrators. For more information, visit