A little admission would help admissions

Fair warning: This is an intellectual exercise in which you may have to throw out some of your most long-held beliefs.  Be careful!  Stop now if you’re unwilling to consider this modest proposal.

I’m a novice when it comes to the study of game theory.  It’s always been very interesting to me, although even in its moderately advanced forms, it goes over my head in a hurry.  Shakespeare said that all the world’s a stage; but the more I think about it, the more I believe that all the world is a game: An interaction between players attempting to get to the best outcome for themselves.  Game theory studies these game interactions.

A most simple definition of game theory is “a study of mathematical models of conflict and cooperation between intelligent and rational decision makers.”  Every interaction that can be studied like this is a game. It can be football, or chess, or parcheesi, or dating, or trying to figure out whom you should ask to the prom.  You have to decide what moves to make to get to your desired outcome, and you have to weigh the tradeoffs of each choice you make.

When I call college admissions a game, lots of people get upset, because they think it borders on the sacrilegious to compare something so important to something so trivial, like Monopoly or Clue. But it’s clear we have at least two, and maybe three or more, sides engaged in attempting to either win the game, or since admissions is really millions of games in one system, maximize the outcome of the games.

So, a simple admission that admissions is a game could go a long way toward fixing it, at least where it needs fixing, namely at our most selective institutions, where admissions rates are in the single digits and each admissions year leaves egos of previously perfect students fractured. It would also help at most other colleges and universities, too, however, even where the game is already pretty fair: The overwhelming majority of colleges admit well over half of their applicants, and yield about the right number to come close to making their class every year. Let me explain why an admission could fix admissions almost everywhere.

Two things happened this week that caused me to think about this.  The first is the announcement by the Common Application that they would allow members to ask applicants to list the other schools to which they are applying.  This set off an explosion of discussion on the NACAC e-list (from which I’ve now unsubscribed…I just can’t take the drama any more) and even in a Facebook group for college admissions people.

Those opposed to asking the question think it should be none of the college’s business, and that answering the question poses undue stress on students about “how to answer it.”  (The answer to that last question would be, “truthfully,” in my humble opinion.)  The overwrought reaction to one question on an application that some colleges ask seemed out of proportion, especially in light of some of the other things going on in the admissions process.  But essentially, people are saying, “The rules of the game are unfair, and since I don’t understand them, I would like them changed.”  And that’s understandable, albeit a tacit admission that admissions is, in fact, a game.

The second is an article posted on a Facebook group in which it was revealed that seniors at a Camden, New Jersey charter school averaged 45 applications each. One student applied to 70.  Everyone thinks that’s way too many, but if kids believe their chances are slim, I don’t blame them one bit. They’re just playing the game, and attempting to get to the best outcome for them.  Of course, now that the school has revealed their strategy, one has to wonder how the other players will react next year.  I think they’ve made a mistake in this particular game by revealing this publicly.

So, I thought, how could understanding this game allow us to change the rules to benefit both sides.  What if each side gave something up to get something it wanted more: Could the game be made better?

Consider: What if the question, “To which other schools are you applying?” was mandatory, or what if the information was available to colleges?  At first, some people might think this is travesty, but play the game forward:  If everyone provided, and all colleges collected this information, the ones who become advantaged are the ones are making more serious applications to fewer places; the ones who become disadvantaged are the ones who are applying all over the place, or those who are “trophy hunting,”  theoretically taking slots away from those who want and perhaps deserve it more. Most colleges would be able to admit many more of the students who are serious about their college, while denying greater numbers of those who are not. (Harvard could probably not take any more, because their yield rate is already extraordinarily high.  Others, even Stanford, perhaps could).

Maybe, just maybe, the annoying-to-everyone-who-doesn’t-use-them Fast Apps might go away, as they are no longer advantageous for colleges.  And what if, a few years in, we do the research and determine that students optimize their chances for admission to a top choice when they apply to five or fewer colleges when cross application information is shared?  Admit rates go up, which makes students happy.  Yield rates go up, which makes colleges happy.  It’s a better game.

In a game, both sides have the opportunity to play better with better information.  Admissions is a special game, in which we try to get to the best outcome for all parties involved, while individual agents attempt to produce a maximum outcome.  It can’t always work for every single student, or every single college, of course.  But I think it could be better.

What do you think?

The Death of “Merit Aid?”

No, don’t worry.  Merit aid is probably not going away.

But perhaps–maybe–the term “merit aid” could go away.

For years, journalists and other self-proclaimed higher ed wonks have bemoaned the growth in non-need based aid, somehow thinking that financial aid was a pot of money from which dollars were extracted. These types have become fond of leaping to the conclusion that a dollar spent on aid to “someone who doesn’t need it” represented a dollar less to give to someone who “needed it” and have concluded that this is why poor kids don’t go to college. And thus, all non-need based aid was labeled merit aid.

If you don’t work in higher education, you could be forgiven for thinking this.

In fact, with a few exceptions for the endowed scholarship funds that represent a tiny fraction of total institutional aid awarded, financial aid is a contra revenue.  You can’t “spend” it unless it’s backed up by a revenue transaction coming in. When your tuition is $40,000 and you offer a $10,000 scholarship, it just means you’ve agreed to educate that student for $30,000, usually because you have reason to believe she won’t enroll at $40,000.  In other words, 75% of something is better than 100% of nothing, assuming you have capacity, and enrollment on the margin doesn’t kick off additional expenditures greater than the incremental revenue.

Before tuition started increasing rapidly at the same time family incomes started falling (be sure to set the year filter on this visualization to about 2000), a lot more families could afford college.  Those who couldn’t had to fill out a fairly simple form to determine EFC, or Expected Family Contribution.  The gap between the cost of college and your EFC was how much financial aid you “needed.”  Only one problem, though: The thing right in the middle of the equation, that EFC figure, is pretty meaningless, or perhaps just not very precise. Like the “Peacekeeper Missile,” EFC was a label slapped on to deceive. In fact, it never really meant “Expected Family Contribution;” it was always simply a government index number designed to predict and control federal expenditures.

For years, this was perpetuated by the Overlap Group, a collection of colleges that shared information about applicants in an attempt to determine a common EFC for need calculations. This noble effort, they claimed, was intended to level the playing field and allow students to choose based on the “right fit” rather than costs.  Many people, including me and attorneys in the Justice Department thought it was price fixing, designed to eliminate competition. It no longer exists in its old form.

But if the group has had any lingering effects (other than the 568 Group) it’s that people believe “need” is intelligently and fairly codified. It’s not.  As I’ve written about on my data blog, the federal formula seems logical in its overall pattern, but is nothing short of bizarre in the details.  On average, if you make $185,000 per year and have one student in college, you have no “need,” and the first dollar of financial aid is often characterized as “merit aid.”  To most families who have incomes in this range, the idea is absurd, and they often believe the “merit aid” is what they “need” to make a private college affordable.

Thus, Stanford’s new policy of no tuition for families who make under $125,000 per year is interesting, as are the similar policies at Harvard and other super-selective institutions.  I want to be clear that I applaud these initiatives, and while students from these families may not get the same breaks in the admissions process as wealthier students, it’s hard to argue that this doesn’t make sense, even though someone has tried.

But if you scratch the surface just a bit, you see something interesting: In acknowledging that families cannot afford Stanford or Harvard despite what the EFC (or the Profile) formula says, these two institutions, always leading the charge of institutions who proudly proclaimed they only awarded aid based on “need” have done us all a favor.  (You could, of course, be cynical and argue that these policies are simply designed to grow applications from the bottom 80% of family incomes, in order to get even more selective, and that the arms race hurts us all, but for once, I’m going non-cynical here.)

Two institutions that matter, two institutions who get attention, have, by the classic definition, started awarding aid based on something other than need.  Historically, that’s been called “merit aid.”

In an upcoming Journal of College Admission, I write about Terms of Endearment, and include references to both need- and merit aid. I hope they go away.  And perhaps this is what we need to make it happen.  Keep your fingers crossed.

Let’s Play a Game

Remember this scene? (Sorry for the ad before the video.  Hang with it.)

A while ago, a piece in the Huffington Post kicked off an interesting discussion about the use of data in college admissions.  One part in particular seemed to be the focus of much of the attention:

A new focus for predicting a student’s level of interest in a particular college is related to the position the student has listed that college within the grouping he or she has identified on the FAFSA. Because students who place a college in position number one on the FAFSA are perceived as those most likely to enroll, they might be the first to receive financial aid awards, or might receive a personal phone call to discuss the award letter. Why? Because big data, which provides us that information, also tells us those “conversion” rates are high.

Well, duh. First of all, this is really not “new.”  People have been looking at FAFSA position long before there was a FAFSA. When I started in admissions in the early 1980’s, we knew it was a powerful predictor; in fact, the FAF (College Board form) competed with the FFA (ACT form), and many admissions officers preferred the former because you got a photocopy of the actual form, showing the colleges listed and the order; while the FFA only supplied the codes of the colleges (you had to look them up manually if you didn’t know them) and they were not in order.

Now, our National Admissions Association, NACAC, has taken the comments of a few concerned members, and told the membership this, via a list-serv post:

The US Department of Education recently announced that it is accepting comments from the public about how to improve the Free Application for Federal Student Aid (FAFSA) process.  Some NACAC members have been concerned that some colleges use the list of colleges that students supply on their FAFSA forms in an attempt to ascertain the students’ likelihood of attending the institution if accepted.

 NACAC is planning on submitting comments, which are  below, with the Department encouraging them to modify the FAFSA in one of the following ways:

  1. Refrain from sending students’ college lists to the colleges; or 2.  Inform students that their  lists can be sent to colleges (preferably in alphabetical or random  order), and allow students to either opt-in or opt-out of such a  transmission.

 

To give you an idea of how powerful FAFSA position is as a predictor of enrollment, take a look at this:  These data are at least five years old (sorry competitors), and show our freshman class broken down by need and ability, into 32 groups.  The pies are colored by FAFSA position: Dark orange is first, light orange is second.  What you see is that the non-enrolling student group is all over the place: Lots of orange, of course, but just as much green, and a lot of red, pink and purple, too (7, 8, or 9.)

Non-enrolling students by FAFSA Position (data is at least five years old)

FAFSA non enrolling

 

 

Now, take a look at enrolling students.  As a reminder, and an important caveat, we at DePaul have never, ever, ever used FAFSA position for any reason other than to project enrollment patterns of the group.  We have never used it to award more or less aid; we have never used it to decide whether or not to admit anyone.

Enrolling students by FAFSA Position (data is at least five years old)

FAFSA enrolling

See the difference? Of those who enrolled, the vast majority had us listed 1 or 2 as early as January.  But from a mathematical perspective, there’s something just as interesting going on.  Because the number of students who did not enroll is larger than the number who did, the predictive capacity of the first position is less important than it might seem.  See this graphic, which has three selected, sequential years in columns, and shows the enrollment outcome by FAFSA position.

ScreenHunter_

What you see is that the predictive power of #1 is less important than it used to be; yield rate for those who list us first (the percentage of the pie that is gold) is falling.  You also see that they’ve been pretty stable for the other groups. (And yes, I have considered the possibility that our competitors have been looking at the students who list us first and have been awarding them more aid.  I’ve not convinced myself that it’s true, after looking deeper at the data.  For one thing, students–both those who enroll and those who don’t–are listing more colleges on the FAFSA, because they’re applying to more colleges, and applying for aid at more colleges):

ScreenHunter_

Why does this matter?

Before I answer, there is an important distinction you need to be aware of:

One the one hand, we have in America College Group A: A small set of colleges and universities who are concerned about over-enrolling a freshman class.  These are places you can identify easily: High profile, extremely selective institutions who often require campus housing for all freshmen, and may generate as little as 5% of all core revenues from tuition and fees that students pay, due to rather large endowments.  They are, by and large, the places that get measured by very small changes in the admit rate, test scores, and even USNWR rankings, because the whole world has gone crazy.

Then, there is College Group B: Those colleges and universities who are concerned about under-enrolling the freshman class. They are lower-profile, less selective, more dependent on tuition, with smaller endowments, and they rely on tuition revenue to pay the bills.  Most institutions, in other words, by a long shot, although there is great range within Group B.

The institutions in Group A pretty much universally claim to be “need-blind” in admissions, although I’ve said many times they are not.  Still, let’s assume that they mean–and are completely honest about–admissions people not looking at the FAFSA prior to making an admissions decision. For them, this is not an issue, right?  This story from last year would seem to suggest they’re not looking at FAFSA position when making admissions decisions; and since they mostly claim to meet need, it doesn’t really matter. So, for once, let’s ignore them, if you think that’s even possible.

Suppose you’re working at one of the colleges in Group B.  And let’s play a nice game of chess (far less dangerous than Global Thermal Nuclear War, fortunately): You’re in charge of admissions and financial aid.  How would you react in each of these circumstances?

  • You have a marginal admit who lists you first on the FAFSA.  Actually, you have a lot of them, because for your marginal admits, you’re the dream school.  How do you approach awarding them?  Do you give them a lot of aid to reward their interest and lock them up?  If so, you risk overspending on students who were likely to enroll anyway.  Or do you cut back on aid, thinking they’re coming anyway, and you could use the cash to build a lazy river?  If you do so, you risk losing large numbers of them to someone else.
  • You have a top admit who lists you fourth.  Actually, you probably have a lot of these, too, because for your top admit, you’re probably more of a safety (this is the way the world works everywhere in Group B.)  Do you bump up money knowing that these students won’t come if you’re the same cost as their dream school?

If you were going to do this, of course, you’d say you need look at other indicators: Things we already refer to as demonstrated interest, another thing we at DePaul do use to project yield, but not to make financial aid decisions.  At a considerable number of schools in the top third of Group B, the importance of demonstrated interest is real (so much so that we now have consultants who coach students on how to demonstrate interest. See Goodhart’s Law.)

Some counselors have attempted to game the system in their own way to take this information away from colleges, by advising their students to list colleges alphabetically.  The result may be that a student who really wants to go to Yale but also applied to Amherst unintentionally signals both institutions incorrectly.

So, take FAFSA position away or don’t; it really won’t matter much in the end from my perspective, but it will kick off a series of actions by colleges that will introduce greater uncertainty in admissions or aid decisions; colleges have shown time and time again that when the game gets tilted, they respond, often in ways out of proportion to the problem.  You think admissions and financial aid decisions appear irrational now? Just wait.

In this movie, the computer will never play Tic-Tac-Toe against itself until it melts down.  It’s smarter than that.

Your move.

Writing About What’s Wrong and What’s Right in Admission

First, some interesting news this morning: Goucher College in Baltimore, a fine liberal-arts college, has announced it will no longer require a transcript for admission purposes.  Instead, students have the option of submitting some writing samples along with a short application and a self-made video of up to two minutes in length.

Predictably, comments on Higher Ed websites have equated this decision with all sorts of societal ills, some suggesting this is a sign of the downfall of civilization. More predictably, many people appear not to have read the news release or watched the video that explained it all, preferring instead to react to a headline suggesting a video was all it took to get admitted, or that you couldn’t still apply the old-fashioned way.  Of course, there is the usual selection of cynical comments (hey, I’m cynical, and these people have nothing on me…): Goucher is desperate, this is a publicity stunt, they’re open admissions anyway (because their admit rate is over 25%, apparently).  And of course, the famous, “This is to game the USNWR ratings,” a favorite of non-thinking people everywhere.

I’ve written before, both here and here and here  (and many other places) that there is a lot wrong with the way we do college admissions.  The system needs a good shakeup, at least in process, and perhaps, ala Goucher, in concept.

It’s no secret that, although we can tell with some degree of certainty who’s going to be able to pass academic muster in our universities based on an admissions file, we have very little capacity to predict which student is going to be the superstar and who’s going to just scrape by. The transcript is the best we have, but it’s far from perfect and it’s far from complete. It’s like minor league batting average and major league performance; yes, there is some connection, but it’s far from predictable. Or Heisman Trophy winners and NFL careers.  Or NBA draft picks. Despite all the science and numbers that go evaluation of future professional athletes, there are human elements that defy description, measure, and interpretation.  We should try, whenever possible, to get at that information, and try new approaches.

It’s curious how vested some people seem to be in what happens at colleges they don’t know much about.  As one commenter on one of the sites said, the only one with real skin in the game is Goucher; they’re taking all the risk, and this makes outside criticism very strange indeed.

Having gone through the crap of uninformed critics when we went test-optional at DePaul, I wish Goucher the best.  And I encourage others to take bold steps in this direction.  Higher Education is cursed with incremental change that lags behind society’s pace.  Something like this is exciting.

Onto the bad stuff: Flagler College recently released a report detailing the investigation and findings of the mis-reporting of admissions data over several years, and puts the blame solely at the foot of the former VP for Enrollment Management.  A hat tip to Jim Jump, former NACAC President, for posting this on the NACAC list today.

It points out all that is bad about admissions, and, to a lesser extent, the society in which admissions operates.  Extreme pressure in EM is not rare, and it often comes from boards or presidents or provosts who are driven by those input measures of prestige the industry is so focused on.  As is often the case, no one seemed to be able to tell that the numbers had been inflated for several years: No one said, “You know, this class doesn’t seem like a class with an average ACT of 24…I’d say it’s more like a 22.9.”  One professor did notice at the student-level that some of his students had in-class performance inconsistent with reported test scores, and the smoking gun was an audit trail in which the former VP actually edited student records to get the numbers, rather than just changing the averages, as seems to have been the case at most places.

Jim Jump discounts the conclusion of the lone gunman, and I do too, as I did in the Claremont-McKenna case.  But regardless, it’s clear that cheating happens because it gets rewarded.  And it gets rewarded because people who have a lot to say frequently don’t understand our business.  None of which excuses it, of course.

If you think about it, these responses are two sides of the same coin: In both instances, someone is responding to an admissions process that just doesn’t serve anyone except the ones it’s always served very well. And it’s a great lesson in how you respond to problems: Do you curse the darkness, or light a candle?

Thinking–All Wrong–About Low-income Students

Maybe, I thought to myself, the problem is that we allow people who really have no concept of how higher education works to have too much say in the discussion.  Higher education is a fairly esoteric little world; even accountants find it hard to move to a job in a university because the way we do things is so different compared to the rest of civilization.  And before I begin, I admit: This might be the problem.

Warning: There are a lot of links here, and if you want to understand my points, you’re going to have to do a lot of reading and synthesizing. If the unexamined life is not worth living, then the unexamined newspaper article might not be worth reading.

This article in the New York Times, titled Generation Later, Poor Are Still Rare at Elite Colleges is a great example. I suppose most people could read it and think, “Yeah, that makes sense.”  And yet, at almost every turn, there’s something that’s just flat out wrong, or, at least a conclusion not supported by the data or my experience (for what the latter is worth.)

Let’s start with the headline, and that word: Elite, a word that appears ten times in the article.  What, exactly, does it mean?  It probably means “selective” although it’s not clear.  Harvard is elite, of course, but not as elite as it used to be, if you believe the numbers.  As I’ve written before, our collective fascination with the term “selective” (an input measure) as a indicator of something important continues to baffle me.  Regardless, this tiny little sliver of the higher education world still fascinates us, and, I believe distracts us from the colleges where we do most of the working and paying and living and dying.  (That link is just for fun.)

We’re told that “This is partly because students are more likely to graduate and become leaders in their fields if they attend competitive colleges.”  Read this, about Malcolm Gladwell’s discussion of the difference between selection effects and treatment effects.  He says it very well: Social scientists distinguish between what are known as treatment effects and selection effects. The Marine Corps, for instance, is largely a treatment-effect institution. It doesn’t have an enormous admissions office grading applicants along four separate dimensions of toughness and intelligence. It’s confident that the experience of undergoing Marine Corps basic training will turn you into a formidable soldier. A modelling agency, by contrast, is a selection-effect institution. You don’t become beautiful by signing up with an agency. You get signed up by an agency because you’re beautiful. Sound familiar?  Change beauty to wealth.  Read again.

Second, the continual sense of surprise that somehow–against all odds–kids from low-income families appear to be, actually, not dumb.  From the article: “there are many high school seniors from low-income homes with top grades and scores: twice the percentage in the general population as at elite colleges.”  Mercy, who’d ever have thunk that? You think I’m exaggerating, of course, but consider these two snippets of wisdom, one I heard in a room of 200 or so people, and one from the Chronicle of Higher Education.  

First, a dean of admission at one of the Ivy League Institutions said this (from my memory, so not verbatim, but I’ve asked enough people who were there, and they all agree): “We spend all our time at <Ivy League Institution> trying to recruit low-income students, which we define as coming from family incomes of under $60,000.  (As an aside, the median family income in the US is about $55,000. But I digress.) But you have to remember, at <Ivy League Institution> you have to be able to write.  You have to be able to work on your own.  And you have to do an independent project.  And there just aren’t enough low-income students who can do that work.” (Emphasis mine, although it was of course, the punchline of the story.)  Second, Harry Lewis, former Dean of Harvard College, writes in the Chronicle of Higher Education, “What’s appalling is that so few low-income students can do college-level work anywhere. For example, in my home state, where people supposedly care about education, only 115 of 343 high schools had average total SAT scores above the “college and career ready” threshold of 1580. The lower-performing schools are, of course, disproportionately those in low-income districts. You would have to do more than redistribute admissions slots the way you want to redistribute wealth—”As far as I’m concerned, that money [the trillions accumulated by the 1 percent] belongs to the rest of us”—before you’ll have English professors at Harvard and Yale teaching Middlemarch to kids with 400 verbals.”  Of course, the equation of SAT scores–which really predict wealth a lot better than they predict freshman grade point–and academic ability is another matter altogether. 

Maybe–just maybe–the term “elite” means “uncluttered by poor people.”  And maybe that’s the problem?

There are also statements in the article that show a lack of understanding about how higher education finance is done: “Colleges generally spend 4 percent to 5 percent of their endowments per year on financial aid, prompting some administrators to cite this rough math: Sustaining one poor student who needs $45,000 a year in aid requires $1 million in endowment devoted to that purpose; 100 of them require $100 million. Only the wealthiest schools can do that, and build new laboratories, renovate dining halls, provide small classes and bid for top professors.”

Ugh.  So. Much. Wrong.  First, colleges may spend 4%-5% of the endowment value every year, but it’s likely very little of that is actually spent on financial aid.  There are several reasons for this, the first being that much of endowment income is restricted to certain types of expenditures.  The second is that most financial aid is not an expense like salaries or utilities; it’s a contra-revenue, or a discount.  The third is that the actual net cost of an average student is far less than the sticker price; and the fourth is the assumption, debated elsewhere, and too much for this blog post, that “top professors”–many of whom almost never see an undergraduate–should be a priority in the first place. (And no, I’m not saying universities don’t need high quality faculty.)

Of course, no article on the state of low-income kids would be complete without explicit or tacit swipes at enrollment management, and there are at least two here.  The first is subtle, suggesting that “merit aid” is the problem, despite the fact that universities that give “merit aid” (which is a meaningless term anyway on its face) enroll, on average more poor students, probably precisely because they give merit aid.  Additionally, we apparently don’t enroll poor kids because of enrollment management, if you ask Michael Bastedo of the University of Michigan: “But enrollment management is so sophisticated that they know pretty clearly how much each student would cost.”

And finally, we have reference to my old arch-nemesis, “Need-blind admission,” which I’ve written several times before, does not exist. “You can make big statements about being accessible, and have need-blind admissions and really low net prices for low-income kids, but still enroll very few of those low-income kids, by doing minimal outreach,” said Catharine Bond Hill, president of Vassar College. “There has to be a commitment to go out and find them.”

And yet, it’s so hard to find them. Apparently.  If you’re looking mostly in New England prep schools, for sure.

Some hints about what the problem might be:

I believe many of the factors that exclude low-income students have a lot to do with things other than money, and they start with unseen and unquestioned assumptions people make.  As Morton Schapiro states accurately and with a bit of delicious irony: 

“I think we were a little naïve,” said Morton O. Schapiro, president of Northwestern University, a former president of Williams College and, like Dr. Hill at Vassar, an economist specializing in the economics of higher education. “Cost remains a barrier, but so does perception”, he said, adding, “It’s a psychology and sociology thing, as well as a pricing thing.”

Whether he means on the part of the students or on the part of the university is, I suspect, subject to interpretation.  But if I had to bet, I know where I’d put my money.

Disruption may be coming (at last)

A while ago, I wrote a guest blog post on the Washington Post, about using Google to manage the American college and university application process.  I got some good response to it: A lot of people thought there was some merit to the idea; some thought I was crazy, and many suggested that this was an example of the “McDonald’s Syndrome.”  That is, when you get into one of those situations at work where everyone wants to go to lunch, but no one can offer an idea, you simply say, “Let’s go to McDonald’s.” People are suddenly inspired to come up with something better.

I still believe the whole college selection process is–at least from my standpoint–backwards: Price is often the last consideration for many families, because it’s the most mysterious part of the process, on purpose. This hit home with me earlier this spring, when I sat down with a neighbor and her extraordinarily high-achieving daughter, who had six admissions but wasn’t sure they could afford any of them. Something seems wrong.

As I was thinking about this on my long train ride into the city this week, I recalled a conversation in the late-1990’s with Tedd Kelly, who was the founder of CERR, the Consultants for Educational Research and Resources. Tedd recognized that the way we do college admissions was backwards, because cost is the last thing that gets decided. (In fact, we purposely tell most students we can’t tell them the cost until April, after they’ve completed a FAFSA.)  Tedd set up a website and a business called “ECollegeBid.”  Students could indicate their profile, and how much they were willing and able to pay, and colleges could accept their offer to get them to enroll. Cost was right up front; the details flowed from it.

It was a disruptive idea that is like almost all disruptive ideas in Higher Education: It never seems to work when it comes from the inside, because the disruptors have too much to lose.

But as we go through another year of angst and agony about admissions, and now about financial aid and affordability, true disruption may be coming from another source: The Federal Government.  I’m not sure anyone I’ve talked to has considered how truly disruptive the prior-prior year (PPY) proposals could be.

The current financial aid process requires parents to complete the FAFSA in the spring of the senior year of their child’s high school education, after applications have been filed. It’s always a mad rush, and often must be completed before the parents have their taxes completed, which makes the results tentative.  If you’re applying for Fall 2014, you use 2013 income data.

With PPY, you’d fill out that form in the student’s junior year, any time you can, and almost always after taxes are filed.  You could get the FAFSA (or Profile) results before senior year begins.  You could talk to colleges about costs very early, even before applications are filed.

This could be very good for students, of course:

  • It could erase most of the uncertainty for parents.
  • Students might be surprised by the range of options available to them in the end; many students end up paying about the same at private colleges as publics, but never find out because of sticker shock.
  • It could radically revise the way in which merit aid is used.

But it could scare the daylights out of colleges. Consider what might happen:

  • Students wouldn’t have to apply to as many colleges to ensure they have an affordable option because they’d know costs up front.
  • Applications would fall, and colleges who define themselves by a low admit rate might struggle to make sense of the new reality.
  • Cost becomes an important part of the consideration process in ways it never has before, as most rational people think it should be.
  • Yield projections would be difficult if not impossible in the first couple years. Colleges would not know how many students to admit to make their class.
  • It would be difficult to work with parents who have income that varies wildly from one year to the next.
  • But most important, one of the most sacred of all the sacred cows–the May 1 Candidate’s Reply Date–might be a thing of the past.

Imagine that: If you no longer have to wait until May 1 to know final costs, colleges could institute several application cycles, and insist on earlier deposits: A sort of multiple Early Decisions on steroids.  As spots become filled in each cycle, fewer are available in the next.

Is this frightening?  Suppose we had always done it this way, and I suggested we switch things around, and make cost a total mystery until a month before you have to decide?

Tell me what you think. What else might be the unintended consequences of PPY?

Free Tuition: A Great Idea, right? Right?

There has been a lot of discussion recently about several free tuition programs that are under consideration. Because I frequently point out that we’re not sending enough poor kids to college in this country, you’d think I’d be all gaga about the possibility.  You would be wrong.

This is because of one simple reason: Free tuition would almost certainly limit poor students’ access to bachelor’s degree attainment.

In addition, most students from very-low income families can already go to college for free, or close to it.  In Illinois, by way of example, families with incomes under $50,000 who qualify for both Pell and MAP can cover direct costs (tuition, fees and books) with cash back for personal expenses at the community college in my home district. (This cash, of course, does not cover foregone earnings and the opportunity cost of it.)  It would also cover a considerable percentage of the bill at the state flagship here.  And I’d agree that those two sources should cover more.

The problem is not the idea: The problem is how it plays out.

First, lots of these programs are “last dollar” awards; that is, they’re offered only after all sources of state and federal government money are exhausted by the student.  This can actually make “free” a bad deal for students compared to the current method.

But more important, lots of economists have researched and written about “Free.”  It causes humans to react irrationally, at least based on an economist’s definition of rational.  It creates want in addition to demand (which is want backed up by the ability to pay.)  It creates want among people who otherwise wouldn’t purchase it: Even those who light their cigars with $100 bills (I’ve never really seen anyone do this, of course, but it’s still a nice metaphor.)  At Union Station in Chicago, I’ve seen lawyers in  $2000 suits line up for a “free” sample they wouldn’t pay one penny for.

If you want to see how “Free” has played out in Georgia, you can find lots of evidence to suggest that wealthy students benefit from free way more than poor students do.  Here. Here. And here. Since wealthy people vote more often, free tuition for the wealthy seems like a good idea to remain in office.

If the colleges offer “Free” to everyone who wants it, we have no problem.  But, of course, supply of anything is not unlimited; it’s constrained by lots of things at universities: Campus capacity, faculty teaching loads, and the government’s lack of willingness to give away too much of anything.

So what happens if lots of people line up for “Free?”  The thing being offered gets rationed, of course.  In a university, this is often viewed as a good thing: We just call it “increasingly selectivity.”  And when colleges and universities go into rationing mode, they start looking for rational ways to ration it.  From my previous post about why there is no such thing as need-blind admissions, look at the things that go into admissions decisions at institutions that consider themselves at least moderately selective:

Admissions Factor Wealthier Students and/or from Wealthier Schools Poorer Students and/or from Poorer Schools Advantage
Test Scores Wealthier students come from schools with access to expensive test-prep and can take the tests multiple time May not know how tests work, what the differences  Wealthy students
Advanced Courses/Rigor Wealthier students come from private schools or higher-income public schools with greater access to AP, Honors, IB and other courses  Likely to come from schools with fewer options for advanced courses; especially if prerequisites require planning from freshman year Wealthy students
Essays Essays may be written, edited, groomed, and polished, sometimes over a year’s time Unless the importance of the essay is clearly understood, there may be little or no editing or reviewing by adults Wealthy students
Letters of Recommendation Counselors and teachers are expected to write letters designed to give the student every advantage in the process Letters may be written by counselors or teachers who do not understand the game, or may not even know the student well Wealthy students
Activities Resumes are carefully designed to highlight leadership, volunteer activities, and activities tied to school and campus culture More likely to include jobs that detract from school activity options, but may be financially necessary  Wealthy students
Legacy Status More likely to have college-educated parents Less likely to have college educated parents Wealthy students
Diversity Less likely to be from an underrepresented group More likely to be from an underrepresented group Poorer students

And, as I’ve written before, when a public or private university raises the threshold on something like SAT Scores for admission (whether consciously or unconsciously,) poor kids get screwed.  They get screwed because when you’re selecting students, you choose the ones who have the educational benefits of wealth.

So, here’s the deal: If public universities won’t use “Free” as a mechanism to keep out the very students whom “Free” should help, I’m all for it.  I just don’t see that it’s very likely to play out that way.