Should the federal government rate colleges?

President Obama recently announced that the U.S. Department of Education (DOE) would start rating colleges and universities in 2015. The White House's press release indicates that he likes colleges that graduate large numbers of students from disadvantaged backgrounds and dislikes colleges that saddle such students with heavy debt without graduating them. In five years, he wants to reward and punish colleges with increases or decreases in Pell Grant dollars.

Colleges and universities should be accountable to the public for public money they receive. Obama is especially annoyed with expensive for-profit colleges that receive federal student aid dollars but whose students incur large debts and then drop out, or who graduate but cannot find good paying jobs. Who can blame him?

The rating idea has too many problems, however. One is that DOE would balance diverse factors arbitrarily to produce a college's score. These factors include the percentage of the college's students receiving Pell Grants; the college's average tuition, scholarship and student loan levels; the college's graduation and transfer rates; graduate earnings; and advanced degrees of college graduates. The right way to balance these factors to produce a single number is anyone's guess.

Another problem is DOE's inadequate method of calculating graduation rates, which is based only on the percentage of students that start and finish at the same college. This treats as a failure the one third of college graduates who transfer. Obama and Mitt Romney were transfer students. Under DOE's method, Occidental College would have been penalized for Obama's transfer to Columbia, and Columbia would have received no credit for graduating him. The same goes for Romney's move from Stanford to BYU.

Students transfer for many reasons, including change of financial circumstance, location of spouse or love interest, athletic opportunity and academic program availability. It's in the interest of students and the public that colleges be rewarded for enabling successful transfers, not punished.

A third problem is that emphasizing graduation instead of learning would pressure colleges to lower academic standards — a perverse incentive that is sure to undercut the creation of an educated citizenry.

A fourth problem is that asking colleges to produce more data will increase college costs, not decrease them. Such demands from DOE and its surrogates at the regional accrediting agencies have made colleges and universities staff “institutional research” offices. These offices are but one part of the bloated administrations that, along with luxurious housing and athletic facilities, are the main reason college costs have risen so much in recent decades.

A fifth problem is that rating colleges on their graduates' earnings rewards colleges whose graduates make large salaries and punishes those whose graduates enter lower-paying professions or become stay-at-home parents. The public interest is served at least as much by educated parents and schoolteachers as it is by investment bankers. A college education's value is not exhausted by making students more employable. It should also make them better citizens and wiser human beings.

Rather than creating a controversial rating system to shame colleges and universities into holding down costs, Obama should address the problem directly by making institutions that receive federal student aid disclose publicly their annual budgets in a common format — not line by line, but summarizing main categories of expenditure and revenue. The summary should show the total amount spent on faculty salaries and benefits separately from the total spent on administrative salaries and benefits so that the public can discern the institution's priorities, including those created by DOE. In the case of for-profit colleges, moreover, the summary should show dollars given to private owners or public shareholders.

A college or university is a faculty, its students and a library. Its essential activity is learning. If a university receives federal student aid, the public should know what the university spends on learning and what it spends on other things, however necessary those things may be.

John Armstrong is the Willis J. Smith Professor of Philosophy and former associate provost at Southern Virginia University. Twitter: @JohnM_Armstrong