Expanding Enrollment at Selective Colleges: What Is the Point?

When we wrote our recent blog post about easing the admissions rat race by expanding enrollment at top colleges, our aim was to illustrate concretely that getting serious about deescalating the competitive scramble for slots at high end places would require doing some things that were unconventional and even painful for schools that are at the top of the heap. That post has provoked a lot of discussion about whether there is a problem here at all and, if there is, whether enrollment expansion on the scale we suggested (50 percent) is at all plausible. We are inclined to think that expansion would be more feasible and less traumatic than many of our commentators seem to, but we certainly agree that a searching discussion of how much expansion is feasible for particular institutions and over what time frame would be a valuable exercise. Rather than entering at this point into an analysis of the logistical questions, we want to make sure that we don’t lose sight of the underlying questions of fairness and efficiency here.

Think of this fairly realistic example. Imagine an undergraduate college with 2,000 students and a $1-billion endowment. (Call it Willhurst.) Costs at this college are basically financed by student tuition (net of student aid) and earnings from the endowment, with some additional help from current giving. The endowment supporting each student’s education is half a million dollars, which generates about $25,000 of spending every year toward that student’s education. Nice work if you can get it.

Now suppose the college receives an unrestricted gift to the endowment of $100 million. The college considers two options for spending it. Option 1 is to spread it over all the students, enriching the student experience by creating more faculty positions. So $100 million for faculty expansion generates $5-million per year, enough to hire and support 25 added faculty at an average cost of $200,000 per year, including salary, benefits, added office and classroom space, and other support. If Willhurst formerly had 250 faculty, for an 8 to 1 student-faculty ratio, the 10 percent increase in faculty size would reduce that ratio to a US News-pleasing 7.27 to 1. The college’s alternative choice would be to use the $100-million gift to expand the student body by 10 percent without reducing the endowment per student. The new endowment money again goes to added faculty, to preserve the old faculty-student ratio. But now the college also has additional tuition and room and board revenue from 100 extra students, which can be used to support the classrooms, housing needs, and other support services required by a larger student body.

(Amherst College recently undertook an expansion of roughly this kind, for the admirable purpose of facilitating enrollment of more highly disadvantaged students without having to reduce the number of places available for other applicants. But we don’t think our basic argument here depends on the newly admitted students being any different from the students in the regular admissions pool.)

It is very hard for us to see why it’s a better use of philanthropic dollars to further enrich the educational experiences of a small group of highly selected students who are already receiving a fabulously expensive education, rather than extending that very valuable experience to more people. The education offered at Willhurst and its real-life kin truly is extraordinary, and we agree that exceptional education for exceptional students is a worthy part of American higher education. Our aim is not to undermine that experience but to share it with a broader group of students with similar qualifications.

Reflecting on the fact that the donor of that $100-million will receive a rebate amounting to $30-million or more from American taxpayers in recognition of the gift reminds us that we all have a stake in how Wellhurst spends its money.

Right now, the endowments of the wealthy colleges and universities have not fully recovered from their drop in the financial crisis, but they are rising and they will almost certainly in the future surpass their old highs and continue to grow. At that time, the choice we have described here becomes a very real one: Should they devote added resources to further improving the educational services and the amenities provided to the limited numbers of students they currently enroll, or devote some or all of their future gains to expanding opportunities?

Just as important, if one agrees that the best use of the next $100-million is to broaden opportunities, it becomes natural to step back and wonder whether the last $100-million might have been better spent. This raises the question of whether these places should consider reallocating some of their existing endowment resources toward enrollment expansion.

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