Nailing down one definition of a Tier 1 university is difficult. Though commonalities exist, it is hard to get the many different ranking organizations to justify the differing methodologies that lead to their determinations of which school qualifies as Tier 1.
As of September, 2009, a concise statutory definition of a Tier 1 University does not exist. There are many organizations that rank institutions of higher education and all have slightly differing definitions. Two of the most prominent of these organizations are the Center for Measuring University Performance (the Center) and the U.S. News and World Report (U.S. News). While these two organizations have differing methodologies of evaluation, they are the two most widely respected institutions within this field.
According to research done by the Texas Senate Research Center (see reference 1), each year the Center publishes a report identifying the top research institutions of higher learning in the U.S. Criteria consists of:
Total research expenditures,
Federal research expenditures,
National Academy members,
Post-doctoral appointees, and
Median students' SAT and ACT test scores
U.S. News also issues an annual ranking using a weighted scale incorporating the following criteria:
Retention (graduation rate and freshman retention rate),
Graduation rate performances (predicted versus actual graduation rate), and
Alumni giving rate
Universities with Tier 1 status receive higher amounts of research funding, consequently attracting a larger number of students pursuing careers in research and development fields. Major corporations see these institutions as resources, providing highly skilled staff that can establish a competitive edge in the marketplace. These corporations are often willing to relocate to geographic areas with a higher concentration of Tier 1 universities like New York and California. The net effect is greater economic growth within these geographic regions.
Tier 1 universities generally spend $100 to $150 million dollars in research each year. These funds are generated through donations and state and federal matching funds grants. This translates to a sizable inflow of cash for communities surrounding Tier 1 institutions. The relocation of research oriented corporations also spurs job growth in these areas. Therefore, many states will energetically pursue Tier 1 status for their universities to obtain the associated benefits.
Because of the lack of consensus regarding the definition of and methodology in identifying a Tier 1 university, many complexities exist regarding the issue. For example, U.S. News actually ranks schools through the fourth tier level. The one commonality across all ranking systems is the idea that the term "Tier 1" suggests annual research spending at or above $100 million.