Graduation rates are among the most-watched metrics at Minnesota colleges and universities. On those numbers, the Legislature allots funding; governing boards evaluate administrators; rating services rank institutions, and parents and students decide where to enroll.

Yet graduation rates can be misleading markers of a school's performance.

They fail to account for the differences in academic preparation and socioeconomic backgrounds of student bodies. Often, they overlook the selectivity of a school's admissions. They're typically based on full-time, fall-semester freshmen enrollment, omitting part-timers, transfer students and those who begin college in the spring. They don't acknowledge how much money a school spends to guide students to completion, or assess whether those resources are deployed to good effect.

As a result, some schools that work wonders with hard-to-educate students go unnoticed, while weak performers get away with unjustified excuses for low graduation yields. Efforts to hold educators accountable go awry. A better measure of an institution's ability to turn its students into graduates, and at what cost, is much in order.

The Midwestern Higher Education Compact (MHEC) is at work on new measures intended to fill that bill. This summer, the Minneapolis-based, 12-state, nonprofit higher-education alliance rolled out preliminary state-by-state "working papers," relying on four-year-old data and seeking feedback from other higher-education experts.

The reports score public and some private institutions on their ability to produce graduates both effectively — given the student bodies and communities they serve — and efficiently, in light of their spending on instruction and related services. Two scores — one for effectiveness, one for efficiency — were derived for 29 two-year and 31 four-year Minnesota schools.

Minnesota's paper is a data-lover's delight. We waded into the work-in-progress and gleaned these observations:

• Four years ago, only about half of Minnesota's public two-year colleges were producing as many graduates as would be predicted from the academic preparation and socioeconomic characteristics of their student bodies and their communities. It's no wonder that Chancellor Steven Rosenstone of the Minnesota State Colleges and Universities system recently stepped up CEO-level accountability for student retention and graduation rates. Unless things have changed dramatically, there's still considerable room for improvement at the state's community and technical colleges.

• One of the leaders, Anoka-Ramsey Community College, owes its positive results to close ties to area high schools, creating a "college-going culture," said Deidra Peaslee, vice president for academic and student affairs. It serves a larger share of dual-enrolled high school/college students through Minnesota's Post-­Secondary Options program than do most of its institutional peers, she said. An early jump on college improves graduation rates, she said.

• All but two of the public two-year colleges showed middling or worse results in efficiency — that is, in the graduation yield derived from their spending. A recent MnSCU push for more consolidation of campus back-office functions tacitly acknowledges that the system's education-related support services should be made more efficient.

• The University of Minnesota, Morris stands out among the state's public four-year institutions for generating more grads than expected at a good price. UM-Morris Chancellor Jacquie Johnson attributes that result to a tight-knit, supportive campus culture that allows the nearly 1,800 students to build strong relationships with faculty. One of every three students at Morris is either minority or international in origin. The school's success with that diverse student population warrants examination and imitation.

• Effectiveness scores lag at all of the four-year MnSCU state universities, save for Bemidji State University.

• The state's educational flagship, the University of Minnesota-Twin Cities, ranks well in effectiveness and less well in efficiency based on four-year-old stats. It would appear stronger today because of concerted, fruitful effort to increase the share of students who graduate, said Robert McMaster, vice provost and dean of undergraduate education for the Twin Cities campus.

A large research university will always fare more poorly than small colleges on efficiency scales, McMaster said, noting that highly paid research faculty also teach undergraduates. That's a valid point. But that does not mean that MHEC's warning signal about efficiency in serving the 29,000 undergraduates on the Twin Cities campus should be ignored. It underscores other recent evidence that the U can become leaner without pinching quality.

MHEC's new measurement tool is both timely and useful. Two legislators who serve on MHEC's governing commission, Senate Higher Education chair Terri Bonoff and House Ways and Means chair Lyndon Carlson, say it should enhance the Legislature's ability to tie funding to grad results.

This year, 5 percent of state appropriations to MnSCU and the University of Minnesota depend on improving performance in several areas, graduation rates among them. That's up from just 1 percent in previous state budgets. With money on the line and the state's future workforce at stake, both educators and legislators should watch for the better measures MHEC is developing.

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An editorial of the Star Tribune (Minneapolis). Follow the editorial board on Twitter | Facebook | Pinterest | Google+