|[January 06, 2014]
Fitch: Rating System Could Change Funding for US Higher Ed
NEW YORK --(Business Wire)--
If the proposed Postsecondary Institution Ratings System (PIRS) becomes
linked to federal financial aid packages, support for some colleges
could rise and others could fall depending upon how institutions operate
in a more metric-driven environment, Fitch Ratings says.
Fitch's 2014 Outlook for the Higher Education Sector noted that PIRS
would likely incorporate graduation and job placement rates as a measure
of an individual institution's success and effectiveness. PIRS will also
measure access and affordability of colleges and universities to
ascertain the relative value of an institution. Should a college or
university prove unable to achieve acceptable benchmarks within PIRS,
financial aid allocations could decline which could weaken demand and
consequently, retention and graduation rates.
Last week the U.S. Department of Education issued a request for
information on PIRS's metrics, data collection, weighting and scoring,
and presentation frameworks. The notice reiterated President Obama's
intent to propose allocating financial aid based on this evaluation
technique by 2018. The system is slated to be put into place by the
2015-2016 academic year.
Over the shorter run, we believe this request for information could add
further descriptive ad measurable factors to PIRS and Fitch will
continue to monitor the development of this ratings system.
Additional information is available on www.fitchratings.com.
The above article originally appeared as a post on the Fitch Wire credit
market commentary page. The original article, which may include
hyperlinks to companies and current ratings, can be accessed at www.fitchratings.com.
All opinions expressed are those of Fitch Ratings.
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