The idea that fancy colleges bend their standards to admit the kids of wealthy alumni hardly seems like news. But that practice is in fact a violation of an antitrust exemption that had allowed schools to engage in what would otherwise amount to collusion on aid packages. The carve-out which had required that they not consider the applicant’s financial status when making admission decisions, which effectively required them to deal with assistance at a later step.
A new Wall Street Journal story highlights damaging admissions in ongoing antitrust litigation against MIT, Notre Dame, University of Pennsylvania, Georgetown and Cornell University. Twelve other schools have already settled. The snippets in the stories show that yes, indeed, these schools are creating different tracks and standards for kids of rich alum donors.
But for some key background, an earlier Journal account explains how these institutions got into litigation crosshairs:
The colleges were allowed under a federal antitrust exemption to collaborate on aid calculations, but only if they didn’t take financial need into consideration when reviewing applicants. They also couldn’t discuss aid offers for individual students. The suit alleged that the schools did consider finances in some circumstances, for instance giving an edge to children of wealthy donors or when selecting candidates from their wait lists.
The colleges worked together under what was called the 568 Presidents Group, a reference to the section of the 1994 legislation that provided the antitrust exemption. The arrangement allowed schools to avoid bidding wars for low-income applicants but also limited how much they could favor wealthy applicants to keep scholarship spending to a minimum. The exemption expired in fall 2022, and the group dissolved that November.
I don’t see how those who designed this arrangement thought it was anything other than eyewash. Even in the days of my youth, when students were in somewhat worn but perfectly servicable dorms and no one would even dream that glamorous gyms were a reasonable amenity, there were a very few standout legacy admits, as in kids with names of old families (in one case, on a building!) who had beautiful manners, wore shabby old WASP clothes, and were not exceedingly sharp. But on the whole, the preppies, which would include legacy types, came to college much better trained than public school kids. And the public school cohort soon found out that Harvard chose to limit admissions from schools like Andover and Exeter to about 40 each a year, when on raw merit, they could have taken a majority of their entire graduating classes. More on the topic of what strikes me as another antitrust violation, the coordination of elite high schools with elite colleges on college admissions, later in this post.
So the elite schools engage in social engineering a plenty, including in my era, a cap on the percentage of the class that was Jewish, not unlike the confirmation in more recent years of caps on the number of Asian-Americans. So ironically, complete abandonment of the consideration of money might lead to an on-average even more students from moneyed backgrounds.1
A second reason to regard this deal as untenable is it would in theory be possible for a school to over-admit from the needier cohorts, so the total they would need in aid would exceed the budgeted amount. That would result in some kids declining by not getting generous enough packages. The schools would then have to turn heavily to their standby lists, where the students were arguably less strong than the first round admits.
The perceived need to give more preference to wealth donors results from most if not all of these schools becoming hedge funds with educational subsidiaries. The adminisphere has become a self-licking ice cream cone. Alumni relations departments are now larded up with well-paid fundraisers, with a significant part of the operation being dreaming up naming opportunities for the super rich. That often means new buildings that add to the glam factor (also justifying higher admissions) without improving educational content. As Journal subscriber James Foster pointed out in comments on the new story:
The number of non academic/faculty staff at US universities increased by 452% from the 1970s to the 2018. Ivy league schools now employ 1 faculty member to every 11 students (good) but 1 non faculty staff for every 4 students (bad). Some top colleges like CIT, UC San Diego and Duke actually employ more non faculty staff than have enrolled students (terrible).
As we have pointed out, Harvard had Larry Summers blow a big hole in the endowment via an absolutely stoopid interest rate swaps bet that predictably went bad, where he even threw funds from the operating budget into the wager. Harvard had to cancel many expenditures, from a planned expansion across the river in Allston to hot breakfasts. Other schools no doubt faced what they perceived to be legitimate pressures, such as a reduction in students from China who paid full freight as a result of Trump saber-rattling.2
Now to some of the dirty underwear in the current Journal story:
At Georgetown University, a former president selected students for a special admission list by consulting their parents’ donation history, not their transcript, according to the suit. At Massachusetts Institute of Technology, a board member got the school to admit two applicants who were children of a wealthy former business colleague, the suit alleges. And at Notre Dame, an enrollment official in charge of a special applicant list wrote to others, “Sure hope the wealthy next year raise a few more smart kids!”, according to the suit….
At Notre Dame, the university’s Institutional Risk and Compliance Committee said the admission of so many children of major donors represented a major risk to the institution’s brand should it become public, according to the motion. In 2020, the school admitted 86 applicants who were connected to large donors, or about 4% of the incoming class. Within that group, 76% of those donor admissions needed special consideration to get in, the motion said…
The lawsuit also includes testimony from Sara Harberson, Penn’s associate dean of admission from 1999 to 2008, who was deposed for the case in October 2023. She said that the school had a “bona fide special interest” tag for students from families who were big donors or knew someone on the board of trustees.
Those students were assured of admission.
If the school was over-enrolled, they were protected, regardless of their academic record. “You had absolutely no power as an admissions officer,” Harberson said in her deposition.
A spokesman for Penn said it sees no merit in the lawsuit….
At Georgetown, a former president selected students for an annual president’s list after reviewing information about the parents’ donation history and capacity, but without reviewing the applicant’s transcript, teacher recommendations or personal essays. Atop the list he often wrote “Please Admit,” according to the motion.
The plaintiffs are seeking class certification and $685 million in damages, which under antitrust law, would be increased threefold to over $2 billion.
What rankles many is that these institutions hold themselves forth as bastions of meritocracy, and that status in turn serves to justify the notion that credentialed members of our ruling classes deserve their outside pay and power. We explained long-form in a 2007 Conference Board Review article why meritocracy is unattainable in practice. But if the members in a hierarchical or status-driven system do not believe that the authority of their betters is legitimate, the alternative for maintaining order is coercion. So defending the practices of these societal validators is more foundational than it might seem.
I wish I could do more justice to a second topic, the way top-tier private schools collude with prestigious colleges on admissions. I had a colleague whose kids went to one of these schools explain the workings in great detail a while back, but did not record the details. Apparently these schools have access to data services which allows them to see on an anonymized basis the admissions practices of top colleges, and I believe it is much more granular than SAT scores and GPAs (as in it may include things like varsity sports and awards). So these secondary schools have a very good idea of how their current crop of seniors maps into the admissions criteria of these sought-after colleges.
At each of these schools, there is a cohort of students who are assured of getting in pretty much everywhere they apply (think math competition winners or a high GPA/SAT student who is also a pole vaulter). I am told the high school guidance staff restricts where they apply since they could crowd out admissions of very good but not super standout applicants from the same school. Remember, the school’s incentives are to get as many of their students as possible into highly regarded colleges, and not maximize outcomes for particular students. There is apparently a lot of information trading between these top high schools and sought-after colleges, but I cannot recall what the details were. My source, who is legally savvy, thought this would amount to an antitrust violation if anyone had the gumption to go after it.
Given the fact that it’s not possible to have a true meritocracy, some arbitrariness is inevitable. But with yawning inequality, virtually no income mobility for the bottom 40%, and the deterioration of schools like the old City College of New York, which trained many poor students and got the best of them into elite careers, the stench of money is becoming too apparent all across American society.
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1 The admission staffs know high schools across America very well, so one way they create diversity that is politically acceptable is geographic diversity, as in making sure not all the kids grew up in rich suburbs. That means they can also identify applicants with strong board scores from so-so secondary schools to mix things up. That can sometimes have very specific effects. When I moved in my junior year from Escanaba, Michigan, to a Dayton, Ohio suburb, that made it possible for a different girl in my class in my high school in Escanaba to be admitted to Harvard (it seem vanishingly unlikely that Harvard would have admitted both of us).
2 It seems to be outside the scope of these suits, but these students were widely perceived to be given undue preference in admissions.
A few random reactions to the article …
1) Sadly, none of this is exactly news. In the early 2000s, the Wall Street Journal’s own Daniel Golden won a Pulitzer Prize for a series of articles on the admission practices used by selective universities to favor wealth candidates. The articles were turned into a book called “The Price of Admission.”
2) In reality, the problems likely have become much worse over the ensuing 15-20 years. A more updated book-length take on the topic can be found in the book “Poison Ivy” by Evan Mandry.
3) As someone who teaches at one of the schools mentioned in the article as now having more administrators than students, the problem is real. The administrators add little value to the educational enterprise, spend most of their time looking for things to do, & improperly interfere in the classroom. Since the pandemic, most efforts have been ideological ones to protect student “wellness,” police speech & behavior, & otherwise enforce “correct” thinking — all of which are defined as enforcing administrators’ preferences & ensuring that students aren’t exposed to any ideas or views that may challenge their preconceptions or expand their thinking.
4) Less noticed in recent years has been the extent to which many of these same school’s have engineered an explosion in master’s degree programs that are designed to be cash cows that subsidize other institutional activities. These programs admit most all applicants, at least domestic ones who can access federal loans, and often work with shady third-party vendors. In effect these schools are operating more selective undergraduate programs & doctoral programs with a diploma mill in the middle.
Yes, I agree and pointed out at the top that this story has a dog bites man quality to it. But it still got a large number of comments at the Journal, confirming that this is a sore subject. Thanks for informing us that the admissions favoritism is getting worse, and describing how education is being further degraded by expending undue energy on norms enforcement.
As for grad schools being cash cows, that was long the case at Harvard B and Law School. Despite having an official “each tub on its own bottom” pretense, those programs have long provided funds to the University, even with having extra overheads allocated to them.
One thing that has made second and third rate programs possible has been a weird explosion in perceived necessity of these degrees. When I went to B-school, only a very few programs carried a lot of weight with employers: Harvard, Stanford, Chicago, Wharton, and for finance, NYU and Columbia. For reasons I cannot explain, over the 1980s, programs at Amherst (Amos Tuck), MIT, Yale, Duke and others moved up in standing. I can’t tell if those schools got better or if more demand for MBAs wound up driving pretty good candidates to these programs.
Duke opened up its business school in ’69, so I think it’s more on the demand side and keeping in mind the actual point of degree conferring, making sure people are reasonably competent in a field. As long as the minimums are okay, the Duke business classes aren’t going to have anything much different than the Harvard ones, and the graduates might come cheaper and be willing to work in places much worse than the Northeast as they already have been living in Raleigh Durham.
A school that opened up before the Pentagon really started to delve into workforce management after World War II might have wonky stuff, but after a certain period, the business cases will all be the same. Then there is the diminishing returns side. The Harvard grad might finish five minutes earlier, but the boss won’t be in until the next day.
Re: visa mills
As someone who recently exited one of the Ivies as a dual PhD/master’s student, this is absolutely correct. The master’s programs are undergoing continuous expansion and the student body is generally 75-80% international, filled with rich kids from China and India, mostly. And unlike the PhD students, these are generally all rather academically unremarkable folks whose most noteworthy attribute is generally being born to rich parents.
My former uni has found a way to generate even more money by turning some master’s programs into a one-year rather than a two-year curriculum: charge a $120/yr price tag for one year rather than a $80-90k price tag for two years and double the number of H1-B hopefuls being shoveled into the already-saturated white collar job market. And somehow they’ve even gamed the system such that nearly every master’s grad gets a 3 year grace period on visa sponsorship due to the STEM exemption that has been even been successfully applied to (you guessed it) MBA programs. There’s an endless line of internationals in search of an H1-B and they know it. The entire slate of master’s programs outside of some elite MBAs would collapse if not for them supporting it financially, and in turn greatly hollowing out the ability to increase administrative bloat.
Thank you. Administrative bloat is a theme discussed often here. Executive administrators are the bagmen of the legacy elite.
My work requires everyone to take ethics, conflict of interest, anti-bribery, and anti-corruption training. We’re then tested on it, yearly, which involves choosing the correct answer in all sorts of tricky scenarios, and we must pass with a grade of 80% or higher. The example you give above of the MIT board member bypassing the normal admission process is something everyone in my workplace would from training and policy known not to do. We also have a whistleblower hotline and an office dedicated to resolving any kind of ethics questions, either clarifying course of action or taking ownership of the sticky situations (it’s not always clear what is the right thing to do).
I’m not saying this solves the problems, but it seems higher education could use something like this training if they don’t have it already. School administrations seem to be failing in ethics in so many other regards than this tuition situation and training/education is how I would go about trying to solve it.
Sadly, from my own observations over the years, executive administrators seem to see this kind of strategy as a box ticking exercise, guidelines for faculty to follow, useful for optical presentation, and not applicable to themselves.
In simpler times, it was only the love of money that was the root of all evil. Then came lust for power and its also-ran, the participation ribbon or trophy. That latter covers the lower tier, diploma mill and marketed degree programs, all subsidized, hah, by that generous Federal lending debt peonage. Only those with the right credentials get a chance at debt waivers.
Hunger Games, down the road from Learner Games.
The Ivies have run afoul of the feds before, but more about screwing people needing financial aid than helping legacies and kids of donors. In the early 90s, the Ivies plus MIT entered into a consent decree to end the practice of the “overlap group” which entailed having financial aid officers from the schools meet to divvy up the most sought after applicants rather engaging in a bidding war for them, thus suppressing financial aid rewards.
Back when I first read about this 30 years ago, it explained a lot about my financial aid offers in the early 70s when the “overlap group” was in full operation. During spring break, well before what was the D-day of April 15 when all the letters went out, I received a letter telling me I’d been named a Yale National Scholar, of which there were 50, one from each state. My prep school classmates were all convinced I’d get a full ride, “including bubble gum,” one predicted. When April 15 arrived, Yale’s official aid letter was quite a disappointment, barely $200 higher than Harvard’s, scarcely reason enough for even a poor boy to spend four years of his youth in New Haven rather than Boston.
BTW, the consent decree included colluding on faculty salaries and tuition increases because they were violating on those as well.