Posted on September 13, 2019

What College Admissions Offices Really Want

Paul Tough, New York Times Magazine, September 10, 2019

In the fall of 2014, Angel Pérez was hired to oversee enrollment at Trinity College, a small liberal-arts school that occupies a picturesque 100-acre hillside campus overlooking Hartford. {snip}

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Pérez was two years into the job when we spoke. {snip} “Everybody wants to have more selectivity and better academic quality and more socioeconomic diversity, and they want more revenue every single year,” he explained. “Part of my job since arriving at Trinity College has been educating this community about the fact that you can’t have it all at the same time. You’ve got to pick which goals you’re going to pursue.”

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By the end of the Obama administration, the emerging consensus was that these efforts had paid off, that things had changed. The inequities that had plagued elite higher education, as an article in Smithsonian magazine on Hoxby’s work put it, “may be one problem on the way to being solved.” A recent Atlantic article distilled this new conventional wisdom into a single sentence: “The more elite the institution, the more likely it is to be racially and socioeconomically diverse.”

But in 2017, a group of economists led by Raj Chetty, who was then at Stanford and is now at Harvard, undercut that consensus, showing that, in fact, the opposite was true: The most selective colleges in America were the least socioeconomically diverse. Chetty and his team issued what they called mobility report cards for each institution of higher education in the United States. At “Ivy plus” colleges (Chetty’s term for the Ivy League plus Stanford, M.I.T., Duke and the University of Chicago), more than two-thirds of undergraduates, on average, came from families in the top income quintile, and fewer than 4 percent of students grew up in the bottom income quintile. At the very most selective colleges, low-income students were even more of an endangered species; at Yale, for example, Chetty found that just 2.1 percent of the student body came from the bottom fifth of the income distribution.

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Over the last decade, two distinct conversations about college admissions and class have been taking place in the United States. The first one has been conducted in public, at College Board summits and White House conferences and meetings of philanthropists and nonprofit leaders. The premise of this conversation is that inequity in higher education is mostly a demand-side problem: Poor kids are making regrettable miscalculations as they apply to college. Selective colleges would love to admit more low-income students — if only they could find enough highly qualified ones who could meet their academic standards.

The second conversation is the one that has been going on among the professionals who labor behind the scenes in admissions offices — or “enrollment management” offices, as they are now more commonly known. This conversation, held more often in private, starts from the premise that the biggest barriers to opportunity for low-income students in higher education are on the supply side — in the universities themselves, and specifically in the admissions office. Enrollment managers know there is no shortage of deserving low-income students applying to good colleges. They know this because they regularly reject them — not because they don’t want to admit these students, but because they can’t afford to.

There is a tiny minority of American colleges where tuition revenue doesn’t matter much to the institution’s financial health. Harvard and Princeton and Stanford have such enormous endowments and such dependable alumni donors that they are able to spend lavishly to educate their students, with only a small percentage of those funds coming from the students themselves. But most private colleges, including Trinity, operate on a model that depends heavily on tuition for their financial survival. And for many colleges, that survival no longer seems at all certain: According to Moody’s Investors Service, about a quarter of private American colleges are now operating at a deficit, spending more than they are taking in.

In public, university leaders like to advertise the diversity of their freshman classes and their institutions’ generosity with financial aid. In private, they feel immense pressure to maintain tuition revenue and protect their school’s elite status. The public and private are inevitably in conflict, and the place on each campus where that conflict plays out is the admissions office.

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Hidden away among the wealthy masses on the Trinity campus was a small cohort of low-income students. When Pérez arrived, about 10 percent of the student body was eligible for a Pell grant, the federal subsidy for college students from low-income families, and many of those were students of color. Academically, Trinity’s low-income students were significantly outperforming the rich kids on campus; the six-year graduation rate for Pell-eligible students at Trinity was 92 percent, compared with 76 percent for the rest of the student body. But Trinity’s low-income students — at least the ones I spoke to during my visits to campus in 2017 — were often miserable, struggling to find their place on a campus where the dominant student culture was overwhelmingly privileged and white.

But perhaps the most startling fact about the pre-Pérez admissions strategy at Trinity was that it was not doing much to help the college stay afloat financially. As Pérez saw it, this was mostly a question of demographics. The pool of affluent 18-year-old Americans was shrinking, especially in the Northeast, and the ones who remained had come to understand that they had significant bargaining power when it came to negotiating tuition discounts with the colleges that wanted to admit them. As a result, paradoxically, Trinity was going broke educating an unusually wealthy student body.

{snip} If the school put more emphasis on recruiting and enrolling excellent low-income and first-generation students, Pérez argued, it might require an additional short-term investment in financial aid — not an easy step, he acknowledged, for an institution losing millions of dollars a year. But it would improve Trinity’s flagging reputation by making the school not only more socioeconomically diverse but also more academically elite. That transformation, Pérez believed, would attract more applicants and bring in more alumni donations as well.

{snip} Which students you accept and which ones you reject this year will help determine who will apply to your college next year.

That phenomenon was due, in large part, to the power of the “America’s Best Colleges” list published each year by U.S. News & World Report. The list rewards colleges for admitting students with high SAT scores; the more high-scoring students you admit, the better U.S. News likes you.

The U.S. News list is openly loathed by people who work in admissions; {snip}. If you rise even one place on the U.S. News list, you will receive more and better applications from next year’s crop of high school seniors. And if you fall even one place on the list … well, God help you.

Jon Boeckenstedt, who spent 17 years helping run the enrollment department at DePaul University in Chicago before moving west this summer to take a similar position at Oregon State, has traced this effect from inside the profession. {snip}

“Few enrollment-management people will admit this publicly, but we’re all sort of in the same boat,” Boeckenstedt told me when I visited him in his office at DePaul in 2017. “Admissions for us is not a matter of turning down students we’d like to admit. It’s a matter of admitting students we’d like to turn down.”

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{snip} [T]he iron law of college admissions: The colleges with high average SAT scores — which are also the highest-ranked colleges and the ones with the lowest acceptance rates and the largest endowments — admit very few low-income students and very few black and Latino students. {snip} With only a few exceptions, every American college follows the same pattern.

There is a popular and persistent image of college admissions in which diversity-obsessed universities are using affirmative action to deny spaces to academically talented affluent students while admitting low-income students with lower ability in their place. Boeckenstedt says the opposite is closer to the truth. If you’re an enrollment manager, he explains, the easiest category of students for you to admit are below-average students from high-income families. Because their parents can afford tutoring, they are very likely to have decent test scores, which means they won’t hurt your U.S. News ranking. They probably won’t distinguish themselves academically at your college, but they can pay full tuition. And they don’t have a lot of other options, so they’re likely to say yes to your admission offer. {snip}

Boeckenstedt says that there are two structural factors that make life difficult for enrollment managers who want to admit more low-income students. The first factor is the simple need for tuition revenue. Unless colleges can reduce their costs, it is going to be difficult for them to resist the lure of wealthy students who can pay full price. And there are several perverse incentives in the marketplace that make it hard for colleges to cut costs. The most basic one is that the U.S. News algorithm rewards them for spending a lot of money: Higher faculty salaries and more spending on student services lead directly to better rankings. If you reduce your expenses, your ranking will fall, which means that next year your applicant pool will probably shrink. So instead you keep your spending high, which means you need a lot of tuition revenue, which means you need to keep admitting lots of rich kids.

Things are different among the wealthiest colleges. {snip} Some of the most selective colleges have so much money that they could easily admit freshman classes made up entirely of academically excellent Pell-eligible students and charge them nothing at all. The cost in lost tuition would amount to a rounding error in their annual budgets. But not only do those and other selective colleges not take that step; they generally do the opposite, year after year. As a group, they admit fewer Pell-eligible students than almost any other institutions. {snip}

Why don’t the most selective colleges do more? The answer, in Boeckenstedt’s opinion, is that staying “elite” depends not just on admitting a lot of high-scoring students. It also depends on admitting a lot of rich ones. And he has a point: The researchers Nicholas A. Bowman and Michael N. Bastedo showed in a 2008 paper that when colleges take steps to become more racially or socioeconomically diverse, applications tend to go down in future years. “Maybe — just maybe — the term ‘elite’ means ‘uncluttered by poor people,’ ” Boeckenstedt wrote. “And maybe that’s the problem?”

There is a second big structural problem standing in the way of colleges that want to admit a more socioeconomically balanced freshman class: the extraordinary power of standardized admission tests and the apparently unbreakable relationship between family income and SAT or ACT scores. {snip} “Thus, when we ask universities to be ‘excellent,’ and we define ‘excellence’ by input variables like SAT or ACT scores and selectivity, this is what we’re left with: Colleges who want to do the right thing have to act counter to their own interests.”

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Here are the data: Among the roughly two million students who take the SAT each year, about two-thirds, according to the College Board’s categorization, receive scores that are “nondiscrepant,” or in line with their high school grades.

For those students, the SAT doesn’t really affect their college prospects at all—their test scores send the same signal to college-admissions offices that their high school grades do. The students for whom test scores make a difference in admissions are the two groups who have “discrepant” scores—meaning either that their SAT score is much higher than their high school grades would predict (let’s call them the inflated-SAT group) or their SAT score is much lower than their high school grades would predict (let’s call them the deflated-SAT group). Those two categories each make up about a sixth of each cohort of high school seniors.

In 2010 three College Board researchers analyzed data from more than 150,000 students who took the SAT, and they found that the demographics of the two “discrepant” groups differed substantially. The students with the inflated SAT scores were more likely to be white or Asian than the students in the deflated-SAT group, and they were much more likely to be male. Their families were also much better off. Compared with the students with the deflated SAT scores, the inflated-SAT students were more than twice as likely to have parents who earned more than $100,000 a year and more than twice as likely to have parents with graduate degrees. These were the students—the only students—who were getting an advantage in admissions from the SAT. And they were exactly the kind of students that Trinity was admitting in such large numbers in the years before Pérez arrived.

By contrast, according to the College Board’s demographic analysis, students in the deflated-SAT group, the ones whose SAT scores were significantly lower than their high school grades would have predicted, were twice as likely to be black as students in the inflated-SAT group, nearly twice as likely to be female and almost three times as likely to be Hispanic. They were three times as likely as students in the inflated-SAT group to have parents who earned less than $30,000 a year, and they were almost three times as likely to have parents who hadn’t attended college. They were the students — the only students — whose college chances suffered when admissions offices considered the SAT in addition to high school grades.

The significance of the College Board’s discrepant-score research comes into clearer focus when you consider data from a second College Board study, the National SAT Validity Study, which every year or two analyzes the records of students who take the SAT and then enroll in college. The 2018 validity study (which used data from 2013, before the SAT was redesigned) showed that working- and middle-class high school students, students whose parents earned between $40,000 and $80,000, had an average grade-point average in high school of 3.63. Wealthy students, whose parents earned more than $200,000, had an average high school G.P.A. of 3.66, almost exactly the same as the working-class ones.

But students in the $40,000-to-$80,000 family-income cohort had average SAT scores of 1,624 (out of 2,400, as the SAT was scored before the redesign), while students in the over-$200,000 cohort had average scores of 1,793. That’s a 169-point advantage for the well-off ones. High school grades, considered alone, made for a fairly level playing field for students from different economic backgrounds. But SAT scores tilted that playing field in favor of the rich.

So what do you do if you’re an enrollment manager interested in “doing the right thing,” as Boeckenstedt puts it, and admitting more low-income students? For Boeckenstedt, one answer is to quit paying so much attention to the SAT and the ACT. {snip}

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Pérez helped introduce test-optional admissions at Pitzer College during his tenure there, and he became a believer. So when he proposed to overhaul the enrollment-management strategy at Trinity, he recommended that Trinity go test-optional as well. {snip}

When the U.S. News & World Report list came out in September 2017, though, Trinity had fallen six spots on the ranking of the nation’s top liberal arts colleges, from No. 38 to No. 44. The U.S. News algorithm penalizes colleges if more than one-quarter of their admitted students don’t submit scores, and at the time it didn’t give them points for increasing their percentage of low-income or first-generation students. (It now does.) {snip}

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Researchers have found that the early admissions process tends to benefit affluent students, in part because nonrich students generally can’t afford to commit to an early offer without knowing how much financial aid will come with it. Those students need, instead, to be able to compare tuition costs and aid packages from multiple colleges before deciding where to enroll — which means they need to apply in the regular-decision round.

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American colleges collectively now give more aid to each student with a family income over $100,000, on average, than they do to each student with a family income under $20,000.

Trinity’s overall yield in recent years has been about 30 percent, but that includes its 300 early admits. Among its regular-decision students, it has less than a 20 percent yield rate, meaning that Pérez needed to offer admission to about 1,700 regular-decision students in March in order to yield 300 freshmen the following fall. Which meant that once Pérez and his team were finished reading their consciences and had whittled the list of prospective admits down to 3,200 students, they still needed to cut that list almost in half.

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There were two numbers that Pérez knew he needed to hit on May 1, the last day that admitted students could accept or reject Trinity’s offer of admission. The first number was the size of the class, which had to be as close as possible to 600 students. The second number, even more pressing, was the combined tuition revenue those 600 students needed to bring in. And back in February, Trinity’s board of trustees decided on the tuition target for the class of 2021: $19 million.

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Over the last 30 years, as list-price tuitions have climbed rapidly, this strategy has spread to almost every private college in the nation, and many public ones, as well. And as merit aid has expanded, it has created two big problems. The first, and most obvious, is that if you give more aid to rich kids, you have less to offer to poor kids. American colleges collectively now give more institutional aid to each student with a family income over $100,000, on average, than they do to each student with a family income under $20,000.

Equity aside, many enrollment managers have come to see the spread of merit aid as a dire threat to their institutions’ financial health. {snip} At private, nonprofit four-year colleges — a category that includes most of the nation’s highly selective institutions — 89 percent of students receive some form of financial aid, meaning that almost no one is paying full price.

Colleges still publish official tuition rates, just as they used to, and those published rates are often astoundingly high. But the official numbers have become almost entirely divorced from reality. Each year, colleges offer larger and larger “tuition discounts” — another term for merit aid — in order to attract the students they want. {snip} Rising tuition rates may still dominate the headlines, but the truth is that discount rates are rising just as quickly, and at some colleges, more quickly. {snip}

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{snip} In fact, if you pick any two freshmen at the same college, they are very likely to be paying completely different tuition rates. Those rates are based not on the true value of the service the college is offering or even on the ability of the student’s family to pay. Instead, they are based on a complex calculation, using sophisticated predictive algorithms, of what the student is worth to the college and what the college is worth to the student.

The consultants many colleges hire to perform those calculations — known in the trade as “financial-aid optimization” — are the hidden geniuses of enrollment management, the quants with advanced math degrees who spend hours behind closed doors, parsing student decision-making patterns, carefully adjusting their econometric models, calculating for admissions directors precisely how many dollars they would need to cut from their list price to persuade each specific Chloe or Josh to choose their college. Outside the ranks of enrollment management, the work done by the companies that employ these back-room prodigies is almost entirely unknown. But collectively, they play as big a role as anyone in shaping American college admissions today.

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The rise of predictive analytics in admissions and financial aid has had the effect of automating and turbocharging the pressures that enrollment managers have always felt. Colleges’ predictive models and the specific nature of their inputs may differ somewhat from one institution to another, but the output is always the same: Admit more rich kids. That’s the message that almost every enrollment manager hears each spring, either obliquely or explicitly, {snip}.

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