Zza's Best Liberal Arts Schools

US News college rankings get a lot of press, not just because of the rankings themselves. Critics rave about how arbitrary the scores are. Heck, I've done it myself. Just to show how easy it is, I decided to to create my own college rankings and become rich and famous just like them. All the data you need is freely available on the IPEDS Executive Peer Tool. If you want a numerical rating based on the best quality data you're likely to get it, that's the place to start.

I decided to look at mid-sized liberal arts institutions, so I picked Davidson College as my focus institution and then used the filters to select all similar schools. There were 171 of them. Unfortunately, the reporter will only spit out data on 100 at a time, so I had to break it into two groups. But never mind that. A sample from the data menu is shown below.

Note that the data is a little out of date, but it's the most recent in the system.

To keep things simple, I decided to see where you're likely to get your money's worth as a student. I chose several variables to look at, including headcount, average tuition, average institutional aid award, and instructional costs per FTE. In the end, the ranking formula I chose was a simple one:

Value = Benefit/Cost = (amt spent on instruction/FTE) / (tuition - inst. aid)

Here, (tuition - institutional aid) gives us the actual average cost to attend. Dividing this into the amount spent on instruction per FTE should give us an idea of how much quality one gets for one's dollars.

Without further ado, here is the list for all institutions with Value > 1.0 (rounded).

The ratios are quite striking. For every dollar you spend on tuition at Williams College, you're getting over five times as much in return, just for instructional costs! No other institution even comes close to that.

I also looked at how much endowment income per student was in relation to how much institutional aid was awarded. I assumed a nominal 5% return on investment. These numbers give you an idea of how much of the endowment return is spent on financial aid: the ratio of endowment return per FTE divided by average aid per FTE gives you an idea of how the school uses its endowment. For the top five schools on the list above, this is more than 100%, meaning that each of them has endowment draw left over after "paying out" institutional aid. This "Endowment Power" index is labeled Draw/Aid below.

I would take this to confirm these five as being a good value for your money considering the professorial talent on hand and the extra money that goes to fund administration and other wonderful things. Of course, you have to get admitted first...

In case you're wondering, the US News list has these top five liberal arts colleges:

1. Williams College
2. Amherst College
3. Swarthmore College
4. Middlebury College
5. Wellesley College (tied for fourth, actually)
   

Pomona is tied for sixth. Middlebury College isn't on my list because it doesn't have tuition data listed in the IPEDS dataset I got. I dug around on their website just now and found the current tuition to plug in, but the value quotient only comes to 1.0 (rounded), so they wouldn't have made my list anyway.

It's interesting to graph the Value, as I defined it against the Endowment Power in a scatterplot, shown below.

The outlier on the left is Brigham Young University-Hawaii. The cluster above and to the right of the main mass is our top five. They really are in a category of their own. Zooming in is interesting: it shows further differentiation, as if there's a power law at work here, but I haven't checked that.

If you'd like to play with the data yourself, you can download it in tab-delimited text format here. The following institutions had missing data of one sort or another, and are not included in the set:Bates College, Colby College,Connecticut College, Lindsey Wilson College, Middlebury College, Union College,St Lawrence University,Whitman College.

I guess I have to take back any snarky comments about US News I may have made. It looks like their top five rankings for liberal arts schools are pretty sound. This isn't to say the rest of the listings aren't a bunch of hooey--they may be, but I haven't seen it yet. I was all prepared to argue (see my previous few posts) that they were generating and selling estimator error, but this is a case of a nice theory encountering actual facts.

A whole other line of thought involves the actual costs of these schools. Notice how low the tuition - aid averages are? And this is just institutional aid, or discounting as it's sometimes called. The prices on that list don't seem to jibe with all the rhetoric about inflation of higher ed costs. But I may be premature...that's a topic for another time.

You can head over to IPEDS and roll your own metrics.

Update: A commenter (see below) caught the fact that not all students receive institutional aid, which means the conclusions only apply to students who get that aid. Some stats on that are given in my comments below. This fact would also skew the ratio I called endowment power, since denominators are different in aid/aid_students and return/all_students.

I also fixed a typo.

Update 2: I posted another list for full-pay students here.