Question: Graduation rates. One of the factors used to evaluate undergraduate programs is the proportion of incoming students who graduate. This quantity, called the graduation rate, can be predicted by variables such as the SAT or ACT scores and the high school records of the incoming students. One of the components that U.S. News & World Report uses when evaluating colleges is the difference between the actual graduation rate and the rate predicted by a regression equation.31 In this chapter, we call this quantity the residual. Explain why the residual is a better measure to evaluate college graduation rates than the raw graduation rate.