Rerun: Reclassifying Higher Ed: Will the New Carnegie Groupings Change the Race for Prestige?

Hi, it's Michael Horn here, and while we're on summer break right now, we wanted to offer up some of our favorite episodes from this past season. In this conversation, which aired in April, Jeff and I interviewed Mushtaq Gunja, the executive director of the Carnegie Classification systems and Senior Vice president at ace. We talked and unpacked some of the sweeping changes to the Carnegie classifications for colleges. And in the episode we talked about how this new system that they debuted aims to better group institutions, highlight student access and earnings, not just research status and the like. And shift would have become some pretty perverse incentives in higher ed. Now, I will tell you that since our conversation, Carnegie released its new classifications and I've been personally referring constantly to its Student Access and Earnings tool to understand where different colleges fall as they serve low income students, and in particular which schools are what they call opportunity colleges, those that are really getting results for low income students. It's been fascinating. Now, will this new tool and this new classification impact how colleges operate? That's still to be seen, but have a listen and let us know what you think.

Michael we talk a lot about college on this show, but my bet is that if we asked our listeners to define the term, we'd probably get dozens of different versions of the same thing.

And Jeff, that's exactly what the Carnegie classifications aimed to fix when at their outset. But those classifications, in many ways over the last several decades actually narrowed our view of higher ed. It's what led to what's been referred to as isomorphism in the sector to an arms race for prestige or in the late Clay Christensen's words, the desire of every institution to look like Harvard. But the Carnegie classifications are now changing and we'll see if the behavior of colleges, those who fund them, and regulators do as well. We'll break down what's changing and why on this episode of Future youe.

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I'm Michael Horne.

And I'm Jeff Salingo.

Jeff In February, the American Council on Education or ACE and the Carnegie foundation for the Advancement of Teaching announced the first in a series of changes that's culminating three years of work together to revamp the Carnegie classifications. And they've made some pretty big changes.

They did indeed, Michael. I think the big idea was to move beyond the grouping of colleges and universities based on the highest degree awarded, to instead create kind of a multi dimensional classification system. And they changed things in kind of a couple of critical ways. First they revised the research categories that now have three designations. So you have R1, you have R2 and what's called the new kind of research colleges and universities. Now, R1, as probably some of our listeners of the show know, was the holy grail for many colleges and universities. It was listed in strategic plans, it was called for in presidential speeches. And when a university achieved it, let me tell you, they send out press releases or they take out ads on the side of buses and in airports. And by the way, that's for real. I've seen both of those things here in D.C. becoming an R1 used to be determined based on research activity relative to other universities and encouraged kind of a breadth and depth of research. And now there's kind of a clear designation. If you have $50 million in total research spending and 70 research doctorates awarded annually, you're an R1 institution. And that's made places like Howard University the first historically black college or university to get R1, to get it back. R2 is $5 million in research spending and 20 research doctorates awarded each year. And to be a research college in universities. So that's that third tier or third designation. I don't want to use the word tier here. You need to spend at least two and a half million in research and you don't need to award any doctorates. And I like that one because universities I think used to focus on creating and growing doctoral programs for no other reason but to become a research institution. And then this month ACE and the Carnegie foundation are introducing a new complimentary student access and earnings classification. And that's going to provide information on how institutions do in terms of providing access to higher ed for students from lower socioeconomic and historically underrepresented backgrounds. And then how these graduates wages compare to similar institutions eight years after they leave for college. And they're going to wait that for geography, which I think is absolutely critical. And this effort will be the first to center student outcomes and understanding of a college or university's classification. They never really did that before.

So what you just went over, Jeff, of course has been reported in a few places. The Carnegie Foundation. ACE has put some of this information out as well. We'll add some of those links to the show notes for those who want to go deeper. But what we want to do in this episode of Future you is really understand what's the impact of these changes, like, what's it actually going to be for the future of the sector? Is this just a bunch of nice talk, in other words, or will it actually change behavior of colleges and regulators, as well as how maybe prospective students think about higher ed and their destinations? To help us understand the purpose of these changes and what behavior we may or may not see as a result, we're welcoming Mushtaq Gunja to the show. Mushtaq serves as Executive Director of the Carnegie Classification Systems and Senior Vice President at ace, where he has been in charge of running and reimagining the Carnegie Framework. Mushtaq, welcome to Future youe.

Michael. Jeff, thank you for having me.

Absolutely. So our audience, I think, at this point, has a sense of the nuts and bolts of what's being changed in the Carnegie classification system. But let's dig more into the why that you're changing them. What were those changes in the higher education landscape writ large that made your team think, you know, these classifications need updating?

Yeah. Thanks for the question, Michael. Two big things. One, I mean, as your audience knows, the Carnegie classifications have been around for 50 years. And for those 50 years, they have basically operated in the same way we have grouped institutions by the highest degree that they awarded. And that was basically the major way in which we sort of thought about grouping. Like, institutions worked pretty well in 1973. And I think over the course of the 50 years, as higher education changed, the classifications didn't really change with them. And so when we took this project on at ACE in conjunction with the Carnegie foundation in 2022,

one of the

things that struck us immediately was the basic classification maybe wasn't doing the best job of grouping like institutions together. That sorting institutions by the highest degree awarded meant that institutions that had 1,000 students, 500 of which were graduate students and 500 of which were undergrads, were grouped in the same bucket as an institution that had 25,000 undergraduates and 200 master's students, just didn't work anymore. So we just thought that we needed to really take a fresh look at what are like, institutions. That was thing number one. Thing number two is that the way the classifications worked, it was really about institutions and institutional degrees. Students were nowhere really to be found in the classifications. So project number two was to really try to center students. And when we thought about institutions and the way that they thought about their students, two things immediately jumped out at us as sort of being important ways for the higher education sector to be able to think about themselves. And those two vectors were access and outcomes, you know, access and earnings more specifically. And so we set off to go create a new classification system, one that's around student access and earnings.

So let me ask you this question, because that makes sense, right? We see it all the time. That institutions grouped in different ways doesn't actually help us make sense of the world. So that's helpful, I suppose, for research. It's helpful for identification. It seems like there's a larger theory of action here, though, at play. How do you anticipate the changes that you're making to the classifications will actually change institution level behavior itself? I know that there are several downstream impacts, you expect. I'd love you to sort of hear play those out for us.

Yeah, no thanks, Michael. So I think maybe the place to start is when this classification structure was created in 1973, I think it was mainly for the purpose of institutional research. So the folks in higher education that wanted to get some sense of what were like institutions for the purpose of comparison, it actually was so successful in terms of it grouping institutions that it ended up being used by all sorts of third parties that we didn't, you know, our predecessors didn't expect them to be used by. So the rankings folks. U.S. news in particular has used the Carnegie Classification as the base for their rankings for, you know, the 40 years of its existence. States started using the definitions in the Carnegie classifications for some of their funding operations. So in state funding formulas, we sometimes see the Carnegie classifications show up, you know, big funding agencies, nih, nsf, NASA, you know, they, we think, have been using sort of the Research one, Research two, part of the classifications, as a basis for making some of their funding decisions. So, you know, I think it's part of the insight that we had when we took this project on was, look, it's all the more important for us to get these groupings right because it has all of these sort of downstream ramifications and sort of separately, I think many of those same agencies said it would be great for us to also be able to get a handle not just on the organization of the institution, but how well those institutions are doing in serving students. So we are hoping that this creation of a sort of a suite of classifications, one that both looks at the degree profiles, the size of the institution, that sort of thing. And then how well those institutions are doing and actually serving students will be much more helpful to some of the third parties that are moving capital to be able to do that in a little bit more of an intelligent way.

Okay, so Mushtaq, as you talk about the suite of classifications, even back in the 1970s, I don't think they ever thought, I don't think Carnegie ever thought they were coming up with a hierarchy of classifications, but it ended up becoming one just by natural, right? People wanted to become, as a, as a trustee once recently told me, you know, the public may not understand what, what an R1 institution is, but we all understand the number one, right? So people just started to create it as a hierarchy. So I'm just kind of curious about, I want to dig a little bit more in here about, you know, what specifically around the evidence of how these classifications are used currently and why changing them might create some of the changes that you, you're describing. Because it seems to me that in the absence of. Let me start that over again, that part over again. It seems to me that even if it's a suite of classifications, isn't it natural over time that you're going to have just a new hierarchy replace the other one that we used to have? Like, how do you, how do you manage that to make sure that doesn't happen again?

Yeah, Jeff, it's such a, it's such an interesting point and you know, I've been reflecting on this a little bit that as all classification systems, I think over time end up becoming normative, whether they sort of intend to be or not. I was thinking about the animal kingdom, you know, and somehow I think, you know, it's not really the case that mammals are better in any sort of way than reptiles are. And yet, like, you know, we sort of have classified even the animal kingdom into like, you know, different types of animals, some of which are. We sort of prize in a different way than, than we do others. I think knowing that and knowing America's sort of thirst for rankings and for like putting something on top of the other, I think that one of the things we wanted to do with this classification system is to be, if we were going to have a system be normative, we wanted it to be intentionally normative. Right? And so we, I think, are really focused on trying to make sure that we are measuring the right things in this new student access and earnings classification because we think that there will be sort of a normative aspect of that. And so, you know, I think with the measuring of access and the measuring of earnings in sort of a clear way that has some good geographical sort of adjustments to it, I think we will, you know, bring some order and sense to a little bit of a chaotic part of the. Which institutions are doing better than other institutions. I will say, too, Jeff, just, you know, I think the mere fact of grouping a better grouping of, like, institutions will be really useful because I think part of what we have seen is that dollars are flowing to institutions in ways that are maybe not concomitant with what is actually going on down in the ground. You know, and so if we can. If we can have a better set of, like, institutions, and whatever reason that. That some third party might want to use to be able to either fund institutions or group institutions to evaluate institutions, it'll just be done in a more intelligent way. And I think that's going to have a. Some really good benefits down the road.

Okay, I just want to put a little finer point on this, if we can, because there has been this frenetic race among many institutions to become R1 institutions. Does that arms race end, do you think?

I think, as you know, I think we changed the methodology on the R1, R2, and we created a new category of research colleges and universities. I think I'm really happy that we did that because I think that there was a mythos that sort of grew out of what it meant to be an R1 institution, partially because the old calculation that divided up our R1s and R2s was so complicated and measured so many things that I think it might have given the illusion that R1 institutions were in some sense better research institutions than our R2 institutions. Turns out that we weren't measuring better. We had 10 measures. They were mostly about volume. And I think one of the things that we have identified in this new methodology is just some simplicity. So an R1 now is just an institution that is granting a certain number of research doctorates and expending a certain amount of dollars. Our R2 institutions are just doing less of that. Doesn't mean that the R2s are worse in any way. And I think that maybe the clearness of the methodology will perhaps inspire some institutions not to have to try to chase the R1 thing. But even more importantly than that, Jeff, on the research side, this new category of research colleges and universities, I think is incredibly important because it turns out there's a whole set of institutions, hundreds of institutions that have been doing research but aren't granting PhDs or not granting very many PhDs. And I think those institutions were not considered research institutions for purposes of the Carnegie classification. So I think if you are president one of those campuses and you wanted to be able to tell incoming students and tell the funding agencies, hey, we're a research institution for Carnegie purposes, what it meant was that you had to fit into a certain box of doing PhD production. I think this creation of this new category of research colleges and universities, or at least the new identification of these institutions is really useful because I think it'll allow hundreds of institutions that are really focused on undergraduates and undergraduate research to be able to tell their story too, and to be able to lift some of those institutions up. So that now when I'm some funding agency that's interested in funding some particular questions, you know, I, I now don't have to just look at the 146 R1s and the 133 R2s. I can know that there are 275 other institutions that are doing significant amounts of research too.

So that leads me to my next question. So how do you see funders kind of dividing funding between these new, different types of institutionals?

You know, I think a little early to tell, but I'm, I'm really hopeful that they will be able to just increase their aperture of, you know, who's doing some of this work and be able to hopefully in this again new suite of classifications, drill down to really try to understand what is the question that we are asking that we want to pursue and then what are the range of institutions that might be able to meet those sort of demands. And if they pair all of that with this new student access and earnings classification, they can also really understand how well is the institution doing it, actually graduating students and getting them off to good jobs later. And that may be of interest to these funding agencies. One of the things that we've heard over and over when we took this project on is these institutions wanted to increase the number of types of institutions that they were funding. And especially in the humanities and social science, that's a really important thing. I mean, you really get a broader range of perspectives when you are going to different sets of institutions. And so we're, we're excited to, to sort of see where these dollars might end up.

So let's switch gears then to the other big change that you're making. You've alluded to it. Introducing the social and economic mobility classification is pulling a concept that has actually gained steam in higher education. Over the last several years. But you're pulling it into the mainstream, I think now by this action. Whereas policy and regulation have historically focused much more around inputs, less on student outcomes, this puts the spotlight on at least a particular kind of outcome. Right. It has a point of view of that. What are the downstream effects that you see coming from this change of really elevating this into the conversation, and what will cause institutions to make those changes, in your view, that you're hoping to see?

Yeah, I think we're really hoping that this, this new classification, which we had been calling sort of a social and economic mobility classification, we sharpened it a little bit to better describe the very particular things that we are measuring, which are access and earnings. Social and economic mobility can connote a lot of things. Sure.

It can be zero sum, it can be positive. Right, sure.

We're excited by that description because I think it calls into clear focus exactly what we are trying to do. We're hoping that this will be picked up and used by all sorts of third parties for many, many reasons. But let me just highlight three of them. We've talked about one of them. You know, the funding community, especially of research funding, has been asking for this sort of thing, for some ability to be able to really understand who are our institutions in sort of a broader way that we're giving hundreds of millions of dollars to, you know, and are there ways that we can identify the institutions that are really educating the students, you know, from America, you know, from the States, from the communities, and then how well are those students doing afterwards? I think the funding agencies are quite likely to pick this up. Second, there's a set of folks that are thinking about accountability. So think accreditors, for instance. Right. I mean, they really, I think, could use a set of tools to be able to understand where do the institutions sit in the broader landscape and then how well are those institutions doing it at the missions, you know, they had? And there's no question that sort of educating the population and then evaluating how well they're doing at getting jobs and on earnings is incredibly important for those sorts of folks. And so we've had several conversations with the accreditors and I think they're ready to sort of use this in their toolbox, using institutions. And then third, I think there are a whole set of state agencies that we're really excited to go talk to. So, I mean, state after state has been using some version of performance funding in their allocations and, or would like to think about things like roi. Now, this is not exactly an ROI calculation, but it does do some work in trying to understand how well institutions are doing at producing graduates with earnings. So I think that this will hopefully be a tool that we're going to be able to be picked up by several states and we've had a few that have expressed some interest in talking to us and we're out there. As soon as this thing comes out, I think we will spend a lot of time thinking about the states.

And just to be clear to our listeners, you just alluded to it, but I want to sharpen it. How are you going to measure access and outcomes? Because as you know, that's something that higher ed has found lots of ways of resisting over the years. Because frankly, there are many ways to measure both of those things. And the data has been historically difficult to gather, at least in reliable ways across all student populations. Context is different in different parts of the country, and at least I'm guessing you sort of don't want to create the zero sum mentality about, you know, moving some tiers of students up at the expense of others. I suppose so, you know, nor do you want them to cream students, I imagine. So how are you navigating all that as you think about access and outcomes?

Yeah, it's such a. You put your finger on the sort of stream of conversation that we've been having for the last three years. We put together a technical review panel of 20 sort of experts and economists, data scientists and others that have been really thinking about broadly access and earnings. And several of them have put together their own sort of ranking systems of some sort. I think one of the big themes that came out, Michael, is context really matters and geography matters a ton. Right. An institution that is in rural Idaho is different than an institution that is, you know, based in Miami, Florida. And so, you know, I think we learned very early that doing the right amounts of sort of geographical context is going to be incredibly important. So let me just note, I mean, to answer sort of the pointy engine of the question, we're measuring outcomes by earnings and we are measuring earnings eight years after attendance for all federally aided students. So not just students who have completed, but all students. If the student shows up, we'll count them. That'll be true both for first time students, but also students who transferred in or who stopped out and have come back. All students that are federally aided will look at their earnings eight years after attendance. We could have looked at six years, we could have looked at 10 years. I think we've been playing with those sorts of nuances for a little bit. But we were pretty clear that we wanted to measure all students on access. Lots of ways to measure access. The data, as you allude to, is not perfect. There are lots of things that we would love to be able to capture if we could, things like first generation status. But what we are measuring, at least in this first instance, is percent pel relative to the location of where your students are coming from and percent underrepresented minority, again, relative to where your students are coming from. So both those are really the. Relative to where your students are coming from is very important because again, the possible. If you're a community college in Arkansas, you might have access to sort of a different population than a community college that's in Austin, Texas. So we knew that was going to be really important to us. The earnings, by the way, will also end up being adjusted for geography because the earning power in New York City is different than the earning power in rural Virginia. So. So I think we are in the process of obtaining a whole set of data from the Census Bureau. We have most of it. And I think it's going to be really fun to be able to sort of play with some of those geographical adjustments. And I've been a little bit surprised that the existing ranking systems that have looked at this have not done more in terms of geographical adjustments. I think this hopefully will be a major contribution to the field.

Yeah, I like that idea, especially in terms of earnings. Mushtaq so as we wrap up here, I kind of want to get to the, the. So what question? Right? You know, an underlying theme in, in, in our discussion so far has really been, you know, accountability and performance. I think that a lot of that so far has been outsourced to the rankings and the funders. Right. Whether those are, you know, states and the federal government on the funding side, even philanthropy, you know, rankings on the other side in terms of sometimes holding institutions accountable, at least on the measures that the breakers think are important. But, you know, you're not a ranker and you're not a funder. So as you talked about, you know, once these are all out there, you're going to be going out and asking people, I'm assuming in some cases, begging people, cajoling people, strong army people to use them. Right. So why, you know, you seem pretty confident and you know, you. I know you. So, you know, you and other folks at ACE are incredibly persuasive, I guess. But, but what is the strategy, what's the theory of action here for what will cause particularly institutions which for decades have all been aiming towards certain measures, particularly going back to Carnegie in particular, that are one, right?

Like we.

We've seen that year after year, like in strategic plans, in boardrooms, in presidential interviews. We want to become an R1 institution. We all live in. You know, me and you live in the Washington area, you know, go into a national airport. You see all those signs for institutions. We're an R1 institution. I get, you know, every year when the updates have come, I've gotten press releases on this front. Right. So how. How are you going to change that? Is it just the power of persuasion?

I'm not that persuasive. I wish that I were. Look, I think that institutions will change for three, maybe four reasons. The first and most clear is if dollars end up flowing to a different set of institutions because of these classifications, then I think that the incentive structure will line up. And we think that they will both because of the changes to the ways that research agencies, you know, the funding agencies will fund research. But also, again, if we can get into some of these states and have, you know, state funding formulas be driven at least partially by either this new student access and earnings classification or at least informed by it, you know, I think that the dollars will flow. If the dollars flow, I think that the institutions will try to. Will try to chase those dollars. And that's not a bad thing. I mean, I think that that's exactly the way that it is set to sort of work. Second, I mean, if accountability measures are taken based on these classifications, I think institutions know that they need to meet the strictures of accreditors and other sort of folks that are thinking about accountability. And for those folks in particular, I think, I mean, obviously the accreditors have been in the gain. State authorizing agencies have been in the game for decades and decades. And I think that a lot of them have been using the Carnegie classifications as the base for grouping like institutions. And for purposes of comparison, this too, I think will be another neat way for those accreditors who've already been thinking about using the classifications to add another layer of tool to their toolbox when they think about this stuff. And then third, I mean, I think we're leaning a little bit, Jeff, into this idea again of the normativity. I mean, yes, R1 became normative over time. Institutions wanted to chase it. The good thing about being the Carnegie classifications is like, we can build on that a little bit. So we're hoping that that airport banner might not just say that we're states only public R1 institution or whatever they say.

But also you've seen the same one.

Yeah, but also that that institution, it's one that's wonderful. Also an institution that's a high access, high earnings institution and has a Carnegie and we haven't exactly decided on what we will call that sort of branding but will be the highest rank. To the extent that it's ranking in the student Access and earnings classification, I think that's a big deal. And we see institutions on billboards tout their Washington Monthly ranking on social and economic mobility or their US News one and I'm hoping that they'll be interested in that too. Now the good thing about the Carnegie Classification, Student Access and Earnings classification is I think it's much easier to understand exactly what it takes to get there. I think one of my mild criticisms of the existing rankings is that when you've got 10 different measures on access and another three on outcomes, it's very difficult for institutions to know actually how to be able to move the needle

and what lever to pull.

Yeah, I think we very much recognized that there was a way that we could put this together that was like gilding the lily of trying to find exactly the right coefficient that we should put on a different measure and try to get to the mathematically best formula. We decided not to do that. We decided to use fewer measures and have them be relatively simple to understand or at least we hope that they will be. And in so doing I think we might be able to incent institutions be able to change because they'll understand what the measures are actually measuring.

Well Mushtaq, we, we look forward to having you on maybe in five or six years to see because I think you know, it's going to take a while I think to really see the downstream effects of this. But, but you know Michael and I have been talking about this stuff for years on future use so we do wish you luck in, in having institutions and states and the federal government and rankers start to use this in, in better ways to improve higher ed because I think we all have that that goal. Mushtaq, thank you so much for joining us on Future youe and we'll be right back after this.

Thank you.

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Welcome back to Future youe and Jeff, let's get right into it. Fair to say that we both like the changes being made to the classification system and certainly at least the spirit behind them.

Yeah, Michael, no doubt it was overdue. Back in 2021, Michael Crowe, ASU's president and I wrote an op ed in the Chronicle of Higher Education that the classifications have really become a measure of status in an academic world where measures such as profits and stock prices don't exist, for example, and as a result, updates of the classification kind of set off a jockeying for prestige every year.

Yeah, so then here's the big question, Jeff. Will it actually change behavior? We heard the argument for why it might, and there are many actors that, you know, this is trying to change the behavior of. So maybe what we can do is go one by one through the different actors, even even though I acknowledge they are all interdependent. It's part of a system, if you could call it that. But first up is institutions. We know a lot of boards and universities whose strategic plan historically has been essentially become an R1 institution or maintain R1 institution status. I guess question number one for you is will this change that?

Michael I think a lot of this is built on hope. You know, even when the Carnegie classifications were were first created back in the late 1960s, the tool was really never intended to be used outside of a bunch of, you know, pointy headed researchers and policymakers. But it was eventually released to the public and then people used it to create kind of a hierarchy out of the system of the higher education system where one didn't exist. And the best example of this, of course, is the U.S. news World Report rankings, which used Carnegie as the basis of its ranking system. You know, which category a college or university ends up with in the or ends up in with the U.S. news World Report rankings really depends on Carnegie. So how people use this is in some ways really out of the control of Carnegie.

So I think I hear some skepticism there. Jeff from you. And if your skepticism of how it'll change some of that behavior anyway, is the reason for that skepticism because funders will still privilege R1 institutions over, say, the R2s and this new RCU designation. Like, you know, if I'm a funder, why not fund the best institution to do the research? Or is it the case that, as Mushtaq told us, you might say, well, to be an R1, you don't need breath anymore. So you might instead, if you're a funder, say, like, well, where does you know which institution does this particular research the best?

And.

And the answer to that specific question might not be at an R1 institution. So funding might follow.

Yeah, of course, we're talking about this in a vacuum in the first half of 2025, when we really don't know what the state of university research is going to look like given Doge. But let's assume here that not much changes, which I understand for some of our listeners, they'll say, oh, wow, that's a big assumption.

Big, big and scary assumption.

Big and scary assumption, Right. So, okay, so that said, research is often a function of underlying resources and talent. The reason institutions wanted to become R1s is not in all cases because they wanted necessarily that breadth and depth of doctoral programs, for example, but it kind of gave them cachet to attract talent that would then attract money. Because of how we train faculty and researchers in particular, they're attracted to work at places that look like where they were trained, and many of them are trained at R1 institutions. So they would go and teach at institutions that weren't R1. And they said, we want to become R1. Right. They wanted to replicate that experience of graduate education. So my fear is that this becomes a little like rearranging the deck chairs on the Titanic. Right? And everyone continues to behave the way they always have. Now, I hope I'm wrong, of course, but as you know, it's really hard to change human behavior unless. Unless there's a huge, and I mean huge incentive pulling people in a different direction. Now, what could that be in higher ed? Well, let's go back to Jerry Maguire. It's show me the money, right? When the money from the funders, whether that's a state, the feds, foundation, philanthropy, when it really does start to flow to different types of institutions, Michael, that's when I will be convinced. And, and there is a little evidence, and I say a little, that this can work. So I wrote about this about 10 years ago from the state of Tennessee and it was actually a byproduct of a law there that changed how the state paid for its public colleges. Instead of basing appropriations on enrollment, like most states do, Tennessee tied all appropriations, taxpayer dollars to institutional outcomes, things like credit completion and graduation rates, etc. Because the formula changed on the basis of an institution's Carnegie classification. So there was a formula for, you know, this type of Carnegie classification, a formula for that type of Carnegie classification. It really punished colleges that moved too fast up the academic ladder and then they didn't perform well at that level. So indeed, there was a strong financial incentive for universities to focus on improving what they already did rather than try to stretch upward. Right. So there was that financial tie that I'm talking about to this. So the lesson, I think, Michael, is that the money really does need to flow in the direction of the new classifications for them to ultimately, in my opinion, change behavior.

Yeah, I think that's right, Jeff. Incentives matter. I think you're spot on. The reason prestige has been defined as, broadly speaking, looking like Harvard is because, as Deep Throat might have said back in the day, that's where the money is. Right. So nonprofits, it turns out, do respond to those incentives as well. But is it fair on my part to assume that you're excited about, you know, at least these institutions are going to continue to chase R1 status, but at least they no longer have to stand up PhD programs of little value or demand just to get breath. But you know, and frankly, the downstream impact of that is adding to the roster of graduates of PhD programs who might not get cushy faculty jobs or, you know, at least we won't be adding programs at schools that are perpetually under enrolled because there's not demand. Or adding costs to institutions that aren't necessary and might even come at the expense of student success, which, which we'll get to. Or, you know, like, hey, at least if they're chasing R1 status, you know, we're not going to have a program to train physical therapists. That, that is a PhD program. And, you know, we can actually say it's professional and they won't get dinged for that in the future. That was my laundry list. I'll let you actually answer the question now. But like, at least if you're chasing R1, these negative incentives, I think are pulled back.

Yeah, I mean, you still could get research status in many ways, but there still is a R1, R2 research type of university. There still seems to be a hierarchy here. I kind of wish they had Done away with the numbers instead. Right. Because as Mushtaq said, Right. People understand what the number one means. Right. And we still have that number one. So there's still going to be, I think, a hierarchy here in terms of, of R1 status, even though it changed. Right. The, the requirements for it. And there's other ways to become a quote, unquote research university. I'm still, I'm still skeptical, but, but

the R1 status, just to stay on this for one Moment, Jeff, the R1 status, if I chase it, at least it won't have all these negative impacts. Right. I think on a university that just shouldn't be having, you know, dozens and dozens of programs with PhDs that, you know, it can't really support. Does that make sense?

It does make sense. And, and again, I, I think the proof will be in the pudding, as they say. Right. We'll, we'll, we'll see. We'll see.

Okay, so last question here. Do you think the classifications based on access and earnings, do you think that might change institutional behavior? And, and before you answer, sort of one big statement for me here. I think the fact, like it should just be said that ACE and Carnegie are centering the importance of earnings and employment as the measure of student success. Like, it, it is actually pretty singular. I mean, I get it. It's, you know, a couple directions in there, but it's pretty singular. I think that's really significant. I still frankly wonder, is there going to be pushback from faculty who are saying, like, that's not what higher ed is supposed to be about? I still wonder if we'll see that. And frankly, ACE to me is always being super honest. I love them, but they've talked a little bit outside both, you know, both sides of their mouth on this.

Right On.

On one hand, under Ted Mitchell's leadership, they've been very clear, like, we want to focus on outcomes, but they also do represent the current interests of the current institutions at heart. And so when there have been moves that focus on debt repayment or whatnot, it seems to me they're like, I'm not sure I really want that. So I don't know. I wonder where this will land. But it seems to me, at least right now, that the measure of student outcomes being around earnings and by extension, employment and getting a good job is a really big deal. And it's one that I'm happy about, to be clear, but it's a big deal nonetheless. That touches on a lot of conversations you and I have had since the start of future, you and I, you know, I don't know, will institutions push back or will they actually try to be better along this dimension?

Yeah, Michael, just overall, I just want to say I think this is these are great the changes that have been made. I think it's a really good start. And just like the Carnegie classifications have evolved over time, I think these new classifications will evolve over time. So I do want to say that I probably should have said that up front because I've been kind of right. Because I think I've been kind of a little negative probably in my comments here and, and on this one in particular on earnings. You know, I do think it will change behavior of institutions. I hope not in kind of unintended ways or not in negative ways. So let me go back a bit first. Right. Earnings outcomes are kind of a relatively new measure in higher ed, at least at the level of detail that we have now. It's probably been about a decade or so since we first started using them at a national level when the college scorecard was was introduced. But I found when consumers look at them, while boards might be aware of them, they aren't widely used because they haven't really influenced the rankings until recently. Right. As we know, US News a few years back started to use social mobility as one of the measures which started to move the rankings. As we know of some prestigious universities that weren't so good on that front of social mobility. So like you, I'm glad that we're focused on earnings as an outcome because as we know, college is all about the job these days to consumers. Queue up the mail we're going to get from a lot of people saying, oh, higher education is about more than the job. But you know, if you don't have the job. Yeah, baseline, baseline, exactly. And I so I'm really happy also by the way that they're adjusting it on geography because that matters for institutions that might be in right. Rural areas or maybe they send their grads, you know, not to they send them to Memphis instead of Atlanta or New York or you know, San Francisco or something like that. But the other adjustment I wish they make is on kind of program mix. What I hope doesn't happen here is that colleges kind of do away with might what might be considered low earning majors without thinking more about them teaching and other helping disciplines or you know, why is our history major not high on earning? You know, maybe they could do what the University of Texas system is now doing and embedding kind of credentials of value into the degrees in the hopes of improving their incomes. In other words, I hope they do stuff like that to try to improve earnings rather than just say, you know what, we're going to do away with these programs because, you know, at the University of Texas now, if a history major gets a certificate in tableau, and that helps them visualize data, they could earn more. And I hope that's what this encourages colleges to do, to think about how earnings in certain programs are overall impacting their kind of ranking on this or their, their classification on this so that they don't just take the easy way out and eliminate programs. And I think that is the unintended consequence perhaps of this.

It's a fair point, Jeff. Just reflecting on that. I think about the post Secondary Commission, Stig Leshley trying to stand up a new accreditor. The approach they've had, right, is like the ROI can't be negative. We don't care how positive it is, it just can't be negative. And so that's one way to think about it. I guess if you move to an roi, framing over time might be another way for these classifications to evolve, I suppose. And you know, then in that context you would say, okay, so this program that has lower economic returns, it actually should also cost less. Right? So like, let's not charge $125,000 for a master's and social work. I'm looking at you three letter name institution, but I think it starts with

you and ends with C. Yeah, exactly.

But I think implicit in all of what we've discussed to this point, Jeff, is will the other actors that impact higher ed actually change their behavior as well? Right. We've got funders, whether institutions like NIH or states or foundations. We've got accreditors. Will they become a watchdog that occasionally bites now? Or will they just use the student outcome metrics to really help institutions focus on improvement? Will students maybe even change behavior at all as, as rankings perhaps evolve in response to this information? What are your thoughts?

Yeah, so, Michael, let me focus on the rankings. I hope to talk about this, by the way, in the future. But chapter six of my forthcoming book, which comes out in the fall, called Dream School, here's the subtitle of it. How the Information Marketplace Fed Our Obsession with Admissions. Fascinating chapter that I actually didn't even think I would include in the original book proposal because what I found is that student behavior did change over the decade, decades. Right. As consumers got fed more and more data and information, they started to change some of their behavior but what we ended up doing is just building kind of what Naysam Taleb calls kind of a haystack of data. And as it got better, as it got bigger, as that haystack got bigger, the needle we all are looking for just gets buried deeper inside. And, you know, as Taleb wrote, and I quote in the book, you know, we're more fooled by noise than ever. The rise of big data, as he said, has brought cherry picking to an industrial level. We all cherry pick and, and that's what I hear here, right, A little bit. Will the funders, will states, will the nih, will students, will boards just kind of cherry pick what suits them kind of coming out of these changes to the Carnegie classification? Because that's what ends up happening in higher education overall, whether it's, whether it's data around student outcomes, graduation rates, you know, we all kind of pick what suits us.

Yeah, it's a good question, Jeff, and I, I guess it goes back to what you've said a few times now, which is we're gonna have to wait a few years, see where the money actually, you know, money flows actually change. Do more states start pegging, say, you know, funding to outcomes based on this data? We know other states have followed Tennessee's lead and states like Texas have increasingly moved to actually look at earnings, not just graduation rates and things of that nature. Will this provide sort of a more gold standard source of information for that? What will be the downstream impact? What will be the unintended consequences? One thought I will leave you with on this. I know from some folks connected to this effort that one of the things that they want to do is be much more agile in updating these based on the unintended consequences that they see. They don't want to be sort of like a. We put it out there and we leave that basic framework in place. For another, my math's going to be shoddy 50 plus years, right? And then we come back to it later and say, oh, gee, now we should rethink about this. We didn't realize they want to be a little bit more dynamic with the sector. I suppose that also will have its perils because as you point out, some of these things we won't really understand for five, 10 years. And frankly, with all the uncertainty at the federal level right now, who knows where the data is going to come from?

Yeah, I think that's a big question, speaking of the data. And I do like the fact that, again, this is a beginning point. I think it's a very good beginning point. And let's see how institutions react. Let's see how the funders react. So thanks so much to Mushtaq for talking us all through this. I know that sometimes this gets in the weeds of how colleges and universities operate, but kind of an important weed to kind of to pull out here. Incredibly important around the future as we think about the future of higher education. Really going to be curious to see how this impacts actual actions on the, on the ground. So let us know what you're hearing and seeing on this front, and we'll do the same for you right here on Future Year. Thanks for joining us.