A just-published study that used 11 years of data from 30 selective private colleges and universities shows what educators have long suspected -- where colleges and universities place in the U.S. News and World Report annual rankings really makes a difference -- affecting enrollment yield, student quality, financial aid packages and, as a result, even where institutions place in the rankings the following year.

The study was published under the title "U.S. News & World Report's College Rankings: Why Do They Matter?" in the November-December 1999 issue of Change magazine. It was conducted by Ronald G. Ehrenberg, director of the Cornell Higher Education Research Institute and the Irving M. Ives Professor of Industrial and Labor Relations and Economics at Cornell University, and James Monks, senior economist at the Consortium on Financing Higher Education (COFHE).

The study found evidence that the year after a school fell in the rankings:

• the percentage of its applicants that it accepted increased;
• it received fewer acceptances from its admitted students; and
• its entering students' SAT scores fell.

The study also found that, independent of the rankings, institutions with higher endowments per student enjoyed more acceptances from admitted applicants than those with lower endowments per student. Finally, it found that institutions whose rankings fell were forced to offer their accepted applicants more money in the form of outright grant aid and less in loans.

But perhaps most important, the study gave voice to a nearly universal complaint among educators: that U.S. News' habit of tinkering with its rankings methodology from year to year continues to lead to uneven, and probably inaccurate, results.

"Changes in an institution's rank do not necessarily indicate true changes in the underlying 'quality' of an institution," wrote Ehrenberg and Monks. They noted that the California Institute of Technology leaped from ninth place in 1998 to first in 1999 in its category

mainly because of changes in U.S. News' methodology. Ehrenberg's home institution, Cornell, seesawed from 14th to sixth to 11th between 1997 and 1999 for similar reasons. This was also true for Bryn Mawr which plummeted from fifth place in its category in 1989 to 23rd in 1990.

Brighter students choose better-ranked -- and better-endowed -- schools

The Ehrenberg-Monks study showed that a five-place change in rank changed an institution's admit rate by a statistically significant two percentage points. That means if a school fell from fifth place to 10th, it would likely admit 2 percent more of its applicants in order to ensure a large enough incoming class -- becoming less selective about whom it admits in the process. Conversely, an improvement in rank would lead to accepting fewer and better applicants. But the study also revealed that a school must improve in rank by as much as six places in order to improve its yield -- the number of accepted applicants who say yes -- by only one percentage point.

In addition, the study showed that an institution's improvement in rank from 10th to sixth place is associated with an increase in average SAT scores of 5.5 points in the incoming freshman class -- marking a difference, albeit a small one, in student quality.

And the study found that endowment per student -- one of the categories U.S. News uses to measure an institution's quality -- correlated with higher yield, but an institution must increase its endowment per student by $10,000 to improve its yield by one-half a percent.

Better-endowed schools -- and poorer-ranked ones -- cost less

While actual tuition -- the average price paid by all students to attend a school -- remains the same whether the school does well or poorly in the rankings, the study showed the following: Schools that fall in the rankings tend to offer accepted applicants more in the form of outright grants and less in the form of self-help loans -- probably in an attempt to attract additional students, surmised the researchers.

The difference can be significant. A 10-place worsening in the rankings led to a 4 percent drop in tuition minus grant aid; and a $100,000 increase in endowment per student reduced tuition minus grant aid by as much as 4 percent.

In addition the economists noted the factor that receives the largest weight in the U.S. News rankings is its survey of higher education administrators. A rise or drop in an institution's rank in a given year can lead to more of the same in subsequent years because administrators are influenced by how institutions fared most recently in the rankings.

Ehrenberg and Monks concluded: "A change in rank does have a significant influence on admissions outcomes and institutional pricing decisions for liberal arts colleges and

national universities that are at the very top of the U.S. News and World Report ranking lists." But as their study also shows, people would be well advised to be skeptical about the true accuracy of the rankings.

The 30 colleges and universities that Ehrenberg and Monks studied were Amherst, Barnard, Brown, Bryn Mawr, Carleton, Columbia, Cornell, Dartmouth, Duke, Georgetown, Harvard, Johns Hopkins, the Massachusetts Institute of Technology, Mount Holyoke, Northwestern, Oberlin, Pomona, Princeton, Smith, Stanford, Swarthmore, Trinity (Conn.), Chicago, Pennsylvania, Rochester, Washington, Wellesley, Wesleyan, Williams and Yale. Nearly all are among the top 25 universities or the top 25 liberal arts colleges in the United States, according to the U.S. News 1998 rankings. The researchers chose the group because all are members of COFHE, enabling Ehrenberg and Monks to obtain consistent financial aid information from them. The study focused on the entering classes from 1988-89 to 1998-99 and the U.S. News rankings from each year prior to enrollment.

To obtain a copy of the study, contact Change magazine at (800) 365-9753.