How Selective Colleges Heighten Inequality

Not long ago, the president of a prestigious university (not the one in which I now teach) was explaining his strategy to me. “We’re very selective, but we need to become even more selective,” he said. “Our SAT’s are rising, but not as fast

as I’d like. We should be on par with ...,” and he named several institutions even more selective than the one he led. “We’re going to market ourselves more intensively to high-school stars,” he told me.

I asked him about his new capital campaign, and how much of the money raised would go to awarding scholarships to needy students or expanding the size of the entering class. Apparently, none. “We’re going to build a new student center, upgrade the dorms, and use the rest to attract some faculty and student stars,” he answered. “That’s what our competitors are doing. We can’t afford not to.”

I nodded sympathetically. Still, it struck me that, if most college presidents were thinking the same way, the competition for the best and brightest (measured in conventional ways) was going to become more heated than it already is, and a lot of children from lower-income families weren’t going to stand a chance.

Meanwhile, children from middle-income families continue to apply to four-year colleges in ever greater numbers, and competition for admission to the most selective and prestigious institutions is rising steeply. Acceptance rates at the most selective institutions are dropping, even though high-school guidance counselors have been trying to make students more realistic about their chances. For example, according to data published in a popular guide to colleges, in 1980 Harvard accepted 16 percent of its applicants; the most recent data, from 1998, show Harvard accepting 12 percent. Parents and students are similarly finding out that Stanford accepts only 13 percent of its applicants these days; 20 years ago, it accepted 19 percent. The pattern has been much the same at prestigious state universities like the University of Michigan at Ann Arbor, where the rate of acceptance dropped from 72 percent to 59 percent over the same interval, or at the University of California at Berkeley, where acceptances plummeted from 70 to 28 percent.

With colleges seeking to be more selective, and more students seeking admission to the most selective, it’s no surprise that the pressure on students and their families is rising. Even sixth graders are feeling it, according to a front-page story in The New York Times this summer. The father of one 11-year-old introduced the boy to a university admissions officer, who advised him to take Spanish rather than Latin and to sign up for calculus as soon as possible. Other sixth graders are surfing college home pages on the Web, eyeing future majors and financial-aid opportunities.

That such competitive pressures are building, among both colleges and their prospective students, seems an accepted aspect of contemporary American life. Yet, in my view, inadequate attention is being paid to the larger social consequences of the trend -- especially to how higher-education resources are being allocated in this era of widening inequality.

Two broad forces are behind the headlong rush toward greater selectivity. The most basic is that the economic stakes of getting a degree from a reputable four-year college or university have become much higher, as disparities in income and wealth have widened nationwide. By the end of the 1990’s, according to data contained in the Census Bureau’s annual Current Population Survey, the income gap between the top and bottom 10 percent of earners was wider than at any time since the 1920’s. During the prosperous 90’s, the incomes of people at or near the top grew twice as fast as those in the middle, while the wealthiest 10 percent of families got about 85 percent of the value of all the gains in the booming stock market, and the wealthiest 1 percent got over 40 percent of the gains. Such changes have large consequences: At the end of the 20th century, the richest 1 percent of American families, comprising 2.7 million people, had just about as many dollars to spend, after they had paid all taxes, as the bottom 100 million. And they owned most of America’s marketable assets. That represents the largest concentration of both income and wealth in more than a century.

The purpose of college shouldn’t be solely about earning a good income after graduation, of course, but the growing correlation between the amount of education and the level of earnings is striking. In 1998, according to the Census Bureau, the average income of families headed by someone with no more than a high-school diploma was $48,434, which was 8 percent higher than it had been in 1990 (adjusted for inflation). But family income was $63,524 when the household head had a two-year-college degree, 10 percent higher than in 1990. A B.A. lifted family income to $85,423, marking a 13-percent increase; an M.A. raised earnings to $101,670, a 17-percent jump. With a professional degree, family income was $147,170, a whopping 24-percent increase from 1990.

It should not be surprising, then, that more high-school seniors are seeking to attend college -- and more are graduating. But that’s not all: Parents and their offspring also assume that future earnings will be higher with a degree from a more selective institution. They figure that future employers will use institutional selectivity as a proxy for the quality of a prospective employee, and that prestigious institutions will offer an abundance of valuable connections to the job market. While the assumption of a direct correlation between selectivity and future earnings is not borne out by research, the tenacity with which it’s held says much about how parents view the opportunities and risks faced by young people today. Middle-class and upper-middle-class boomers are determined to do whatever is necessary to increase the chances that their youngsters will do well in the new economy.

The second reason for the lurch toward selectivity has to do with technologies that are knitting together the nation -- and the globe. More students than ever are competing nationally (and some internationally) for admission to the same limited set of colleges and universities. Two decades ago, bright high-school seniors with good records typically aimed for the best university in their state or region. But rapidly improving technologies of information, transportation, and communication are on their way to creating a single national, and eventually global, market for higher education.

Today, high-school students and their parents have an abundance of comparative data about colleges -- including standardized ratings such as the annual listings compiled by U.S. News & World Report -- as well as a flood of information available on the Internet. As a result, bright high-school seniors with good grades and test scores are more likely to apply to the big national brands, competing for admission with other students from around the country. Even the sixth graders in the Times’s sample worried about attending a local or regional university. One child intoned, “C is community college, B is state college, A is Ivy League school.”

At the same time, and for much the same reason, every major college and university wants a reputation for being among the places that attract the nation’s best and brightest. And colleges and universities have access to much more information than they used to about who and where those students are, and they are able to communicate with prospects with ever greater ease.

What does all this mean for us as a society? The danger is that the increasing competition -- to be selected and to be selective -- will exacerbate the widening inequalities that are raising the stakes in the first place.

There is no single, simple cause of the growing inequality in the United States, but a large part of it relates to supply and demand. In the old economy that dominated the 20th century, profits and productivity gains depended on making more and more of the same thing. Large numbers of production workers were needed to undertake relatively routine tasks. Those workers did not, in general, require much education. In the new economy of the 21st century, by contrast, businesses depend largely on innovation. To stay competitive, they have to generate products and services that are better or cheaper than those of their rivals, and they must innovate faster than their rivals. Thus, demand is growing for people who can spur innovation by identifying and solving new problems or figuring out what clients and customers might need or want.

Even though more young people than ever are attending postsecondary institutions, the demand for workers with the education and skills needed to innovate is rising faster than the supply. By contrast, demand for people with relatively few skills and little education is static or shrinking. And such people are in abundant supply; in fact, many of them can be readily replaced with overseas labor or smart machines. Those trends help explain why the incomes of people with more education have been increasing faster than the incomes of people with less education. As long as the economy remains reasonably healthy, less-educated people will continue to have jobs -- but their jobs will pay comparatively little.

A society concerned about widening inequality -- and its corrosive effects on democracy, social solidarity, and the moral authority of a nation -- would logically turn its attention to increasing the supply of people capable of doing the work that the new economy rewards. It would, in particular, do so by broadening access to postsecondary education for children from lower-income families.

Yet almost all the increase in the proportion of 18- to 24-year-olds in postsecondary institutions in recent years is attributable to children from middleand upper-income families. As the economist Thomas Kane has noted, from 1977 to 1993, about 70 percent of 18- and 19-year-olds from families with incomes in the top quarter attended postsecondary institutions, and that percentage has been rising since then. Slightly more than 50 percent of children from families in the second-highest quartile attended, and 50 percent of children from families in the quartile below that did so. But less than 30 percent of children from families in the bottom quarter enrolled in postsecondary education -- a percentage that has been dropping since 1993, even as college enrollments among more affluent students have been rising.

There is a danger that the current competitive rush toward selectivity will make it even less likely that lower-income children will gain access to higher education. That’s because college and university administrators have incentives to spend more resources to attract those whom they consider the best students, rather than accommodating more lower-income students whose credentials and test scores do not add to an institution’s luster.

Too many colleges and universities are using scarce scholarship resources to lure student stars, who often come from advantaged families and good secondary schools -- and who already have every chance of succeeding in life. In fact, an increasing number of institutions are engaging in quiet bidding wars for such students. The New York Times reported last year that Pittsburgh’s Carnegie Mellon University, for example, explicitly reassures star applicants that it will match or surpass any offers they receive from other colleges. “We believe competition among schools is healthy,” Carnegie Mellon’s admissions director was quoted as saying. “We are trying to encourage dialogue, and we have set aside enough dough to do it.” Harvard’s admissions materials hint at a similar policy: “We expect that some of our students will have particularly attractive offers from the institutions with new aid programs,” it writes to newly admitted students, “and those students should not assume that we will not respond.”

Harvard’s almost-bottomless endowment allows it to match any bid without skimping on aid to needier students, but that’s not the case for most colleges. What’s doled out to the stars is almost certainly given at the expense of some needier students who qualify academically, but cannot afford the costs. Across the country, “need-blind” admissions policies are vanishing. “It used to be, providing aid was a charitable operation,” Michael S. McPherson, the president of Macalester College, told the Times. “Now, it’s an investment, like brand management.”

A second way that colleges and universities have been pumping up the applicant pool of good students, ratcheting up average SAT scores, and enhancing selectivity is through direct marketing to high schools and families in the middle-class and upper-middle-class communities where high achievers can easily be found. An increasing slice of university budgets is now dedicated to mailings, brochures, visits by recruiters to suburban high schools, telephoners, elaborately staged visiting days on campuses, Web pages, and videos. Similarly, money for recruiting minority candidates is often aimed at middle-class African-American and Asian-American families already intent on sending their children to college. Such marketing invites similar responses from competing institutions, in what has become an escalating round of promotion.

Here, too, the result is often less money to finance the much harder job of recruiting high-school students from outside the mainstream -- diamonds in the rough who could benefit enormously from college but who don’t know it because they and their families are too poor, or their high-school teachers and administrators too overwhelmed, to become aware of the possibility; or because their performance on standardized tests may not reveal their real promise.

The same competition for the best students is driving many colleges and universities to expand and upgrade student centers, improve campus landscaping, make current dormitories more comfortable, and add other amenities. Administrators argue that they must do so in order to keep up with other colleges in attracting star students and improving institutional rankings. But when such expenditures are passed on to students in the form of higher costs, the consequence is reduced accessibility for needy students who cannot afford the tab.

Alternatively, those expenditures are financed from the proceeds of capital campaigns, which might otherwise be used to expand enrollments and provide more scholarship assistance to the needy. One administrator (again, I should note, not at the institution in which I now teach) explained the logic to me in commendably candid terms: “Our goal is to add more students but to reject more students. If anything, we want a smaller entering class. That way, we look more selective.”

Public resources are not being allocated to counter such trends. From 1988 to 1998, according to the Digest of Education Statistics, the average price of attending a public college or university rose 22 percent, after adjusting for inflation (it rose 28 percent at private colleges and universities).

The new fashion among states to provide merit awards to high-school students who score well on standardized examinations is not helping, because children from lower-income families are less likely to succeed on such tests than are students from higher-income families. Last spring, for example, 63 percent of white high-school students who took the Michigan Educational Assessment Program test qualified for a $2,500 Michigan merit scholarship, while only 2.2 percent of African-American students who took the test qualified. Most of the white students were from families with higher incomes than the families of the African-American students.

If we are serious about reversing the larger trend toward widening inequality of income and wealth in the United States -- or, at the very least, about slowing it -- we need to make it easier, not harder, for children from relatively poor families to gain access to postsecondary education. As institutions of higher education, as well as state legislatures, debate issues like how to allocate student aid, recruit students, prioritize capital construction, and even create a presence on the Internet, they need to keep in mind the importance of making higher education available across the economic spectrum.

In light of the nation’s widening inequalities of income and wealth, it seems to me that scarce scholarship resources should be reserved for students who need them, rather than for student stars who do not. Colleges should refrain from informally bidding against one another for stars, and from spending significant resources marketing themselves to middle-class families who already are being marketed to death. Resources should be used, instead, to recruit potential students from lower-income families, for whom a college education would be beneficial, but who do not show that by conventional measures. And rather than spending funds on amenities that make campuses more attractive to middle-class children whose families can bear the added costs, colleges should keep a lid on tuition, room, and board so that more lower-income kids could afford to attend. Colleges and universities might also consider how to efficiently expand their enrollments to provide better access to more students at lower cost. That could include using the Internet to extend the reach of instructional programs to people who now have little or no access to higher education.

Some people will say that the competitive pressures forcing colleges and universities toward more selectivity cannot be reversed. I accept that some institutional competition is inevitable, even desirable. But I see no inherent reason why the terms of competition must converge on standardized test scores, numerical rankings in such publications as U.S. News & World Report, or any such uniform calculus. Institutional success could as well be measured in ways that better respond to the nation’s problem of widening inequality -- for example, by reference to the proportion of promising new admits from lower-income families.

If the challenge is framed more broadly -- as how to help more young people from lower-income families gain the skills they need to succeed in the new economy -- other directions may suggest themselves. For example, colleges and universities might offer associate degrees in various technical fields; or they might “adopt” high schools in some of the poorer communities in their regions. They could encourage undergraduates to tutor students in those communities and professors to give refresher courses to the high-school faculties, and they could aim scholarships and admissions slots at promising students from those schools.

By the same token, state legislatures could expand resources and provide more scholarships for students at community colleges and technical institutes that offer skills that are in demand. More states could also adopt variations of plans, already in effect in some areas, to grant automatic admission to the top public universities to all state students graduating at the tops of their high-school classes. Because lower-income students increasingly tend to be concentrated in lower-income communities, such policies would enhance the access of those students to college.

The rush toward selectivity and exclusivity in higher education is exactly the wrong direction to take for a society that is already becoming less equal, and in which higher education is the fault line separating winners from losers. We should -- and can -- reverse course.

Robert B. Reich is a professor of social and economic policy at Brandeis University, cofounder and national editor of The American Prospect, and former secretary of labor under President Clinton. His next book, The Future of Success, will be published in January by Knopf.

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