Why elite colleges favor rich kids

Welcome to The Tassel, FREOPP’s newsletter on higher education policy, written by senior fellow Preston Cooper. Each month, The Tassel dives into our latest work on higher education, along with a handpicked selection of research and articles from around the web that we think are worth your time. To manage your subscription preferences, visit your Substack settings.

As millions of college students begin classes, a small sliver of them are set up for success better than most. The twelve most prestigious private schools—the Ivy League plus Duke, Stanford, Chicago, and MIT—account for just 0.8 percent of college graduates. But these schools’ alumni are wildly overrepresented in positions of wealth (Fortune 500 CEOs), power (US Senators), and influence (New York Times journalists).

The admissions policies of the twelve “Ivy-Plus” colleges therefore have ramifications far beyond their own campuses. Unfortunately, new research from economists Raj Chetty, David Deming, and John Friedman shows that elite-college admissions is biased in favor of applicants from wealthy families.

Among middle-class high school students who score at the 99th percentile on a standardized test (a 1510 on the SAT or a 34 on the ACT), roughly 10 percent attend an Ivy-Plus college. But among students from ultrarich families with identical test scores, nearly half attend one of the twelve most elite schools.

While some contend that standardized tests are the reason wealthy students enjoy an advantage in the admissions process, the Chetty research shows the opposite: even after controlling for academic preparation, rich kids have a big leg up. So what does explain their advantage?

The impact of legacy admissions

The authors decompose rich students’ nonacademic advantage in elite-college attendance rates into three stages: application, admission, and matriculation. Application rates (rich students are more likely to apply to elite colleges) explain about one-fifth of the attendance gap. Matriculation rates (rich students, once admitted, are more likely to accept) explain another tenth or so.

The bulk of rich students’ advantage, however, comes down to differences in admissions rates not explained by academic factors. In other words, elite-college admissions offices consider several nonacademic factors that decidedly favor students from wealthier families. Most important are preferences for athletes and students whose parents attended the college.

Holding other applicant characteristics constant, the children of alumni are three times as likely to receive admission as nonlegacy applicants. Legacy applicants from the top of the income distribution are even likelier to receive an acceptance letter, suggesting the policy may be a tool to extract donations from well-heeled alumni. Legacy preferences are the largest single factor behind rich students’ advantage in the elite-college admissions game.

Elite colleges unlock elite jobs

All this matters because elite colleges are gateways to positions of wealth and influence in society. Students who attend an Ivy-Plus college are 44 percent more likely to reach the top of the income distribution, compared to similar students who attended a flagship public university. Ivy-Plus alumni are twice as likely to work at a prestigious firm or attend a top graduate school.

Ivy-Plus colleges could democratize access to such positions if their admissions processes placed more, not less, emphasis on standardized test scores. At the extreme, low- and middle-income students would enjoy more representation at top colleges if they randomly selected their entering classes from all applicants with an SAT score above 1500. It’s no coincidence that the Ivy-Plus school most friendly to standardized tests—MIT—also performs best on measures of socioeconomic diversity.

The rest of us, however, should also reconsider the value we attach to degrees from Ivy-Plus colleges. Ivy-Plus alumni are overrepresented in prestige jobs because hiring decisionmakers across society prefer them over people with degrees from less-prestigious schools, or no degrees at all. But the schools’ emphasis on nonacademic factors such as parental wealth and legacy status suggests that an Ivy-Plus degree may not be the reliable indicator of academic excellence we assume. Elite colleges serve the elite, and that will be difficult to change. But the rest of us don’t have to play along.

Read my full writeup of the new research on elite college admissions in Forbes.

What I’m writing

• The return to student loan repayment will be rocky, and the Biden administration isn’t helping. Turning student loan payments back on after three and a half years will be a monumental challenge. In National Review, I argue that the Biden administration’s own actions have undermined the return to repayment. Its false promises of student loan cancellation have given borrowers a disincentive to repay their loans. Moreover, politicizing the student loan program through myriad cancellation schemes has poisoned the relationship between the administration and appropriators on Capitol Hill. Extra funding to smooth the transition back into repayment did not pass Congress because Republicans feared—rightly—that the money would be used for loan forgiveness.

What I’m reading

• Is credentialism driving lower fertility rates? The higher education arms race (documented here at FREOPP) means young people are staying in school for longer. At the Washington Examiner, Jay Greene and Lindsey Burke argue this is delaying family formation and leading Millennials to have fewer children.

• The Education Department is making mergers between colleges more difficult, reports Katherine Knott at Inside Higher Ed. The regulation could have unintended consequences, if it leads troubled colleges to close rather than find partners to stay open.

• A survey of tenured faculty asks about declining academic standards in higher education. Among the findings: 49 percent of faculty think the “college for all” mentality has contributed to declining standards, and 38 percent think many students admitted to college today are not academically prepared.

• Lots of employers claim they’re not requiring college degrees anymore, but most aren’t following through, writes Greg Lewis of LinkedIn. While the share of LinkedIn job postings without college degree requirements jumped 36 percent between 2019 and 2022, the share of new hires without degrees increased only modestly.

• The college earnings premium is now falling, say researchers at the San Francisco Fed. Once consistently rising, the wage premium enjoyed by college graduates has been stagnant since the Great Recession, and has been dropping since the Covid-19 pandemic.

What I’m doing

While descending the Mount Massive trail in Colorado, I stepped off to let a mountain goat pass. This gorgeous female then stopped to see if I would offer her snacks (I didn’t – don’t feed the wildlife, people!), which allowed me to snap this photo. I still don’t think I’ve used the iPhone’s Portrait Mode feature on a human, but my portrait library is full of dogs, sea lions, penguins, bison, marmots, and now mountain goats.

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