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Buying Your Way into College – Affirmative Action for the Rich

We've written before about why schools continue the practice of favoring legacy admissions - accepting the sons and daughters of wealthy alumni. Now there is some empirical evidence of the economics that drive this practice. Slate Magazine recently ran an article about the puzzle of charitable giving in economics - if markets are driven by individuals rationally pursuing their own best interest, where does charity come from? A new study by Jonathan Meer of Stanford and Harvey S. Rosen of Princeton shows that when it comes to donations to one's alma mater, charity isn't altruism. Alumni with kids are 13 percent more likely to donate, and they are more and more likely to donate as their kid reaches age 14. At that point there's a big split - for those parents who's kids go on to apply to the school, donations continue to increase. The parents whose kids do not apply to the alma mater drop off giving. It seems pretty clear that many parents give to their schools because they think it will influence their kids' chances of getting in. Colleges an universities benefit from this, but the study did not examine whether or not the donations worked. This whole process strikes most people as unfair, mostly because the focus on GPAs, SAT scores, and admissions essays makes it look like it's supposed to be a meritocracy. Americans love democracy (where everyone gets an equal say and an equal chance) and stories about unlikely success stories and self-made men. Allowing external factors to secretly skew admissions is so unpopular that affirmative action has been continuously attacked. Legacy admissions are affirmative action for rich people. So my advice to schools is to either do away with the practice (not very likely), or make it public. Why not set aside a certain number of admissions, and just let parents bid on them in an auction? The regular admissions will be more of a meritocracy, and auctions are pure capitalism, something Americans love. Heck, put the admissions up on eBay, that way you don't have to build your own infrastructure.

Rich Kid Admits: Yesterday, Now, Forever

Inside Higher Ed recently ran an article reviewing Daniel Golden's new book, The Price of Admission: How America's Ruling Class Buys Its Way into Elite Colleges - and Who Gets Left Outside the Gates. Golden exposes the secret world of rich kid admits and the "sinister" pecuniary motives that drive such admissions. It is no secret that the parents of rich applicants have the capacity to donate a lot of money to a university. It is also no surprise that this process offends the sensibilities of most people, overturning the notions of meritocracy and diversity that supposedly drive the admissions process. It strikes one as manifestly unfair that a high school graduate can be accepted to an Ivy League university based not on their grade point average or test scores, but on the amount of money sitting in their parent's coffers. But, while this is unfair, it is also desirable. Universities are concerned with providing things like a quality education, a diverse and safe learning environment, and inculcating good values in future citizens. But what they are concerned about most of all, and what makes all those other desirable goals possible, is the size of their endowment. A primary source of funding for universities is fundraising from alumni, which is carried out all year. As many poor work study students can attest, the phones are manned every day in search of more alumni funding. Universities don't raise this money to enrich themselves at the expense of students, they raise this money to fund their academic and non-academic programs, to disburse funds to student groups, to pay salaries, and, most importantly, to off-set the money they lose when they provide merit- or need-based scholarships. If you doubt this, consider that most universities, and almost all the elite universities, are incorporated as non-profits, so they are constrained by state and federal law to not distribute any profit to their members, but to reinvest it in the organization. Ultimately, it is those need-based scholarships that allow the poor to attend elite colleges, thereby providing them an opportunity they deserve, but would otherwise not be able to afford. Setting aside a small percentage of total admissions to rich kids helps subsidize the scholarships that colleges would perhaps otherwise be unable to offer. We place a higher tax burden on high income taxpayers to help subsidize governmental programs. This is similar, except that it results in a benefit to the rich, rather than a burden. So I say, bring on the Richie Riches of this world, the undeserving sons of Croesus, the plutocratic heirs of Big Oil. They are probably pampered dolts and will perform terribly once they arrive, but I sure as hell am not giving any money to my undergrad. And anyway, someone needs to chair the Pan-Hellenic Council.