Yes, graduation rate is the 2nd highest weighted factor in USNWR, after the “distinguished”/“marginal” survey. Graduation rate can be meaningful when closely analyzed, but when 6-year graduation rate is just captured in isolation like USNWR does, it’s primarily a measure of admitting students who are likely to graduate rather than a function of something special that happens while attending the college. If a college admits top academic students from wealthy families, they are likely to have a very high 6-year graduation rate. If a college admits average academic students from average wealth families, they are likely to have a far lower 6-year graduation rate. Using some real numbers:
Harvard – 6-year graduation rate = 98% (<5% admit rate, 25th ACT = 33)
Alabama – 6-year graduation rate = 72% (60% admit rate, 25th ACT = 23)
Suppose a particular kid chooses a full ride scholarship to Alabama over paying $320k for 4-years at Harvard. His chance of graduating doesn’t suddenly drop from Harvard’s average of 98% to Alabama’s average of 72%. Instead I expect he has approximately the same chance of graduating, which is near 100% since he’s a top academic student who will not need to leave the college for financial reasons.
When colleges of similar selectivity have different graduation rates, in many cases there a positive reason for the relatively lower graduation rate, rather than a negative one. For example, Stanford lags well behind peers in graduation rate, which I expect is the primary reason why Stanford is usually ranked last among HYPSM in USNWR. Some specific numbers are below:
Princeton – 4-year = 90%, 5-year = 97%, 6-year = 98%, 7-year = 98%
Stanford – 4-year = 73%, 5-year = 89%, 6-year = 94%, 7-year = 96%
Looking at these numbers, a student might think if they choose Stanford over Princeton, then they have a high 1 in 4 chance of not graduating in 4 years. The numbers in isolation don’t explain that Stanford gives many students an opportunity to simultaneously pursue a bachelor’s and masters as part of their co-term program. ~1/3 of students choose to do this on paper 5-year co-terminal masters program. I expect that if you remove the kids on a 5-year or 6-year program, the 4-year graduation rate would shoot up, and the 5 and 6 year would also increase. Having this co-terminal masters opportunity is certainly not a bad thing, but it hurts Stanford in many ranking lists.
Colleges at which a large portion of the student body choose to do co-ops also do quite poorly in graduation rates . Some numbers for GeorgiaTech are below. I expect few would consider having many easy opportunities to do co-ops while attending GeorgiaTech a bad thing, especially considering that they often lead to quality work experience and job offers. However, if a college makes it easy students to do co-terms, co-ops, or anything else besides a simple 4-year plan, it can hurt their ranking on various website lists.
GeorgiaTech – 4-year = 46%, 5-year = 85%, 6-year = 90%
Perhaps the most influential positive thing the college can do to improve graduation rate is offering quality grant-based financial aid such that few students need to leave school for financial reasons. Being affordable is certainly a positive factor, and it is correlated with graduation rate. However, there are far better ways to check whether the college is affordable for a particular student than looking at the average graduation rate or USNWR ranking.