All posts by Peter Sacks

Peter Sacks is an author, economist, essayist and social critic.


The conventional meritocratic recipe for success is simple enough: study hard in school, get good grades, be involved in one’s community, find an appropriate college, apply for jobs in your field of study, and everything else falls in place. But that’s not how it really works says Lauren A. Rivera, author of Pedigree: How Elite Students Get Elite Jobs.

The path to success she sees is this:  Be born to upper-middle-class or wealthy parents. Know what academic tracks to be on by the end of middle school — knowledge that one acquires from well-educated parents and school counselors with low caseloads. Get involved early in the competitive sports favored by elites, such as lacrosse, tennis, sailing, skiing, golf, cycling, climbing, soccer, and running. Test well enough to get into an elite university.

Apply for a first job in an Elite Professional Services Firm (EPS), the “finishing school” for American elites. They include Wall Street, top management consulting, and exclusive law firms. After you’ve demonstrated that you’re “one of us” in the interview get on the EPS launching pad, which eventually leads to a high-status career in corporate America, politics, or the nonprofit world. Eventually, have children with a spouse of a similar class background, raise them in fine neighborhoods with top schools, sent them to elite universities, and the “virtuous” cycle of elite reproduction continues.

The book offers a rare glimpse into the hiring practices of EPS firms and how they differ from “the dominant theory of hiring” in the United States. The dominant model holds that employers hiring decisions are based largely on “estimates of human capital, social capital, gender and race. But that model is inadequate, she argues, because it fails to account for the increasingly powerful role that one’s class background plays in the recruiting and hiring practices firms that prepare one for leadership roles in society.

Rivera, a management professor at Northwestern University, acknowledges these trends with alarm. Her book goes further than most in that she looks beyond elite college admissions to how elite students find high-status jobs. As a direct observer and participant in the hiring process at an unnamed EPS firm, Rivera shows that elite education is a virtual prerequisite for entry into high-status jobs — jobs that according to the commonly viewed ideal of meritocracy should be available to any competitor on the basis of ability and experience. She demonstrates, convincingly, that’s not the case.

Raised working class in Los Angeles by an immigrant single mom while her father was in prison, Rivera says she was able to penetrate this rarified atmosphere due to her own experiences attending elite prep schools, colleges and graduate school.  She describes being “checked out” by the insiders of the firm in which she carried out her case study, who determined that she was “one of us,” before agreeing to be interviewed for her study.

The author says she did not set out to prove any particular theory, but allowed the data to drive her interpretations.  She concludes that the hiring practices of certain employers — ones that are pivotal in shaping the nation’s future leaders — are driven by considerations of class status. Class, she argues — and the social capital associated with class, is more important than virtually any other factor in whether certain high-statues employers will even consider an applicant for a job.

The key word is pedigree: the array of background traits, including the cultural, social, and educational capital passed from one generation to the next, which EPS candidates bring to the competition for elite jobs. But it’s a closed competition.  One must get through the gates first.  A candidate’s pedigree determines whether his or her application to an EPS firm is legitimately considered in the competition, or tossed in a slush pile of candidates who have no realistic chance to even compete for such jobs.

Of course, pedigree has always been influential in hiring decisions for first jobs at elite professional service firms.  While Rivera acknowledges this, she contends that the rules surrounding pedigree have changed over the generations.  Although elite employers have always hired on the basis of pedigree, the mechanism is now far more indirect. Finding young talent to fill society’s most important and highly paid jobs once was based on descent, the handing over of familial economic power from one generation to the next.

Today, elites have modernized the rules of entry. Rather than explicit bloodlines being the determining factor, the outcome biased toward elites is interpreted as just the rational outcome of the “meritocracy” at work.  Now, just as elite colleges contend that they admit students on the basis of cognitive talent, elite employers claim their highly competitive hiring practices lead to finding the best and brightest young employees.

But the way elites choose talent is hardly an open competition, Rivera argues. Rather, EPS hiring is a “sponsored contest.” While any college graduate is free to apply for a position, only those who are pre-qualified are actually permitted to compete.  The most important pre-qualification is earning a degree from one of two types of schools.  Generally, EPS firms maintain two lists of colleges from which they draw the applicant pool.  First is small list of so-called “core” schools that have fed firms’ talent requirements for decades.  The relationships are historic, steadfast, and habitual. Think Ivy League, especially colleges that are within a few hours drive from power centers of finance, banking and law.

Next is a list of “target” schools that firms have relied on for talent, but to a far lesser extent than core schools.  The pivotal difference between a sponsored and an open competition is the behavior of gatekeepers in seeking talent.  EPS firms go to great efforts to seek out the kinds of college graduates that fit the firm’s culture.  The firms go to the students, spending valuable time and money traveling to the listed campuses and recruiting for their applicant pool.

There is one noteworthy exception, Rivera says.  If a highly regarded EPS firm happens to occupy a booth at a “diversity” job fair, that’s likely no more than a show and tell, serving the firms’ needs to convey itself as an equal opportunity employer, which enables them to compete for federal contracts.  An open competition for jobs is far different: in almost no instance does a gatekeeper for an open contest seek out applicants. In this sense, then, a competition for jobs at the post office is far more competitive than hiring the chosen candidates for any EPS firm.

Then comes the sorting of resumes and the interview process.  At these stages, evaluators at EPS firms, often busy staffers and analysts who work with high workloads, are pretty much left to their own preferences without any firm guidelines from lowly valued human resource departments.  A typical evaluator will spend no more than 60 seconds per resume. In that brief moment, the evaluator scans resumes for positive signals of fit with the firm or red flags that suggest a bad fit.  These decisions are often based on personal biases, reflecting the evaluators’ own background.  Rivera calls this “looking glass” merit: evaluators choose candidates like themselves, with similar family backgrounds and cultural habits, down to the sorts of recreational activities and sports they might share in common.

For example, in the off-chance that a candidate at this stage had graduated with high honors at, say, the University of North Carolina, that would be considered a red flag.  “State schools,” as public universities are called in this competition, would be considered a sign of “intellectual failure.”   Candidates who’ve graduated form a core school are presumed to have the cognitive ability to do the job — although no actual evidence of this presumption exists, Rivera says.

One example stands out.  Rivera interviewed a hiring consultant named Natalie, who examined an application from Sarah, a graduate of New York University’s Stern School of Business.  Natalie noted that Stern was a top ten business school, but not a top three school. “She’s there either because her husband is in New York or she applied to business schools and she didn’t get into Harvard or Stanford.”  For Natalie, Sarah’s graduating from NYU’s Stern School of Business was a red flag, indicating some kind of intellectual failure.

Another red flag is whether the candidate happened to participate in the wrong types of sports in school. Evaluators often looked for similarities in recreational activities as a signal for shared interests and comfort level. One evaluator told Rivera he always asked a job candidate what he or she did for “fun.” The answer wasn’t acceptable if the activity were not something that was fun to him.  One candidate told the evaluator that he liked reading the Wall Street Journal for fun. An EPS evaluator told Rivera, “Nobody reads the Wall Street Journal for fun. And if they are unable to come up with something they do for fun, they are done.”

The classed-based hiring practices of EPS firms might not be so unsettling if such firms had not achieved the level of status, economic power, and influence that they currently enjoy in American life, Rivera contends.  Owing to the high pay and high status that EPS firms use to tantalize graduates, significant numbers of elite college graduates have turned to EPS firms for their first jobs out of college, ignoring opportunities at other types of employers such as manufacturing and educational institutions.  At Harvard alone, more than 70 percent “of each senior class typically applies to investment banks or consulting firms,” Rivera says.  In addition to the highly skewed demand for EPS jobs, this “holy trinity,” has become a well-traveled springboard to leadership positions in all aspects the United States.

Rivera cites research that America is unique among other advanced nations in the extent that people care about the reputation and prestige of one’s alma mater. In few other countries has one’s potential for leadership been so closely tied to where one attended college. As Rivera demonstrates, that has become a self-fulfilling prophesy of the new meritocracy. Exceedingly influential firms have uniquely positioned themselves as “finishing schools” for America’s elites, and yet there is virtually no evidence to suggest whether the system selects for the best, or simply the more well-positioned and well-polished.

For the most part, Rivera’s analysis is believable and compelling. We’ve always known such discrimination along class lines exists at elite professional firms, but she may be the first to inspect the detailed mechanisms that perpetuate the practice.  She fails, however, to address other types of superficially open, but actually closed competitions in which insiders are known to have unfair access to certain jobs in the United States.  The practice is not uncommon. These jobs would include children of police officers, firefighters, union tradesman and similar careers.  Remember?  “It’s who you know, not what you know.”

What’s more, one could argue that EPS firms are selecting candidates most equipped — intellectually, socially and behaviorally — to succeed in jobs that require an unusual ability to communicate and be comfortable with high-status clients in the corporate world.  Evaluators would naturally doubt, for example, whether a first generation college or professional school graduate attending a modestly selective university would have the polish to succeed.

Still, the classed-based hiring practices of EPS firms is unsettling, compared to the semi-open competitions for, say, police or union jobs.  EPS firms are unique in that they occupy far greater status, economic power, and influence than many careers. Owing to the high pay and high status that EPS firms use to tantalize graduates, significant numbers of elite college graduates have turned to EPS firms for their first jobs out of college, ignoring opportunities at other types of employers such as manufacturing and educational institutions.  At Harvard alone, more than 70 percent of each senior class typically applies to investment banks or consulting firms, says Rivera, quoting Nicholas Lemann in the New Yorker.

In addition Americans love a competition that’s open to all comers, like the “Open Championship” in Great Britain and the U.S. Open here. The purpose of these tournaments is to identify the best golfer on the planet during a week’s competition, based strictly on performance.   The opportunity is open to any golfer, not just to those from private country clubs. Indeed, a competition rigged to pick the privileged few is abhorrent to our collective sensibilities. Exclusion based on the conceit that graduates of certain American colleges and universities are intellectually deficient is reminiscent of the days when the U.S. Army rated recruits on the basis of IQ tests.  Those tests purportedly demonstrated the intellectual superiority of immigrants from Arian nations over cognitively deficient immigrants like Jews and Italians.

“Because of the way they hire,” Rivera writes, “these employers end up systematically excluding smart, driven, and socially skilled students from less privileged socioeconomic backgrounds from the highest-paying entry-level jobs in the United States, positions that serve as gateways to the country’s economic elite.”

‘Testocracy’ Is Here to Stay–Alas

In her new book, Harvard Law Professor Lani Guinier attacks “testocracy,” the over-reliance on standardized tests in deciding who gets into college, who has the chance to attend America’s premier institutions, and who is relegated to the cheap seats of community colleges and for-profit schooling.

Unfortunately, Guinier’s “Tyranny of the Meritocracy: Democratizing Higher Education in America,”” contains a number of unexamined assumptions or logical flaws that critics of the prevailing meritocracy (myself included) have been making for years.  For example, Guinier claims that colleges ought to select students on the basis of democratic merit because doing so would be good for the society — as opposed to over-relying on academic merit that can detract from social and economic welfare.

By what authority can Guinier make such a claim?  Who determines that colleges and universities are responsible for deciding what educational policies or admissions systems are in the public interest? State legislatures? Boards of Trustees?  If so, then we can agree that policymakers are free to assign colleges and universities with the mission of selecting students on the basis of “democratic merit” or any type of merit they choose.

Why Reform Pleas Fail

The bigger question: Why have institutions largely ignored pleas to reform the “meritocracy” as we know it? Like some other critics, Guinier asserts that colleges and universities “ought” to be reforming admissions to include democratic merit for the sake of the “public interest.” But perhaps she ought to ask why the testocracy remains so intractable, and why efforts to upend it have largely failed to fundamentally change the way Americans look at merit.

To appreciate how entrenched is the “testocracy,” consider some history.  The story basically starts in France at the turn of the 20th century, when Alfred Binet invented the first intelligence scale for school children.  His intention was to create a modest tool for placing French school children in their proper grade. American psychologists got hold of Binet’s scale and commercialized it for widespread use. Thus was born an IQ test known as the Stanford-Binet.  Certain American psychologists convinced the United States Army to use the test on Army recruits during World War I.  That fiasco produced the dubious notion that certain recruits whose families had immigrated to the United States decades prior — Germans, Norwegians and other Nordic immigrants — were deemed to have superior intelligence. By contrast, more recent immigrants, such as Italians, Poles and Jews, were often labeled as mentally defective due to poor performance on the Stanford-Binet.

Nevertheless, “visionaries” at Harvard University believed that such intelligence testing could identify students who would find their natural place as future leaders in society. From that vision, the Educational Testing Service was created, and the ETS adapted the Stanford-Binet to produce the first Scholastic Aptitude Test.

Binet himself had observed that doctors’ and professors’ sons outperformed the children of carpenters and bricklayers on his school placement scale.  Decades later, SAT scores largely demonstrated that America’s future leaders would also come from the very established, well-educated families who already dominated the ranks of Harvard, Princeton and Yale. If, before the SAT, the privilege to attend Harvard was passed down on the basis of blood heritage, after the SAT such privilege was reproduced by means of the “scientific” veracity of an objective test.  The test proved that the established order was also the properly deserved order.

And so the much-maligned “testocracy” ship sailed long ago, and it has never wavered from its course. This, despite its psychometric flaws, which can lead to wrong or incomplete assessments of human ability.  We know that the SAT and tests like it have a limited ability to predict future performance in school or other real-world endeavors.  We know that such tests tend to select for people who excel in logical-mathematical ability, as opposed to creative ability and deeper thinking styles. We know that such tests correlate to parental income and education–the “Volvo Effect,” as it were–to a far greater degree than other measures of academic performance, such as grades or portfolio assessments. We know all these things. And, yet they do not matter.

A Permanent Fixture?

Instead of arguing ad infinitum that colleges and universities “ought” to revolutionize the way we understand and measure merit, perhaps it’s time to concede that, realistically, that debate is settled, and that continuing to recycle the same arguments decade after decade is, at last, a completely useless exercise.

Admissions committees at selective colleges and universities — the theatre in which these issues actually matter — don’t care about the SAT’s predictive validity or lack thereof.  Parents do not care how well the SAT predicts academic success.  Students don’t care either.

The SAT’s capacity as both a fair and accurate tool does not matter.  And few people beyond the usual critics care because it’s in nobody’s interest to care — except perhaps to those disenfranchised students and families who might, by some democratic measures of achievement, deserve to be chosen, but aren’t.

Forget about predictive validity and forget that some children from economically and culturally well-endowed families start the meritocracy game far ahead of other children born with fewer economic and cultural advantages.  Higher education authorities largely give lip service to these inequities. Even affirmative action policies tinker with the prevailing merit system on the margins, affecting a relatively small number of students at selective colleges and universities.   And, as Guinier herself concedes, the racial or ethnic minorities who benefit from affirmative action, are people of color who often come from relatively well- educated and affluent families.

The SAT as a Market Signal

From an economist’s perspective, the real reason the “testocracy” will not disappear is that the SAT and tests like it serve an important market signaling device in the higher education marketplace.  While most markets depend on price and value as the primary market signals for consumers and producers, higher education is a special case. Like it or not, higher education in the United States does operate under the glare of the “public interest.”  But the parameters the public interest are often vague and undefined, leaving colleges and universities free to enact business models they believe will maximize their own private interests while taking heed of some vague social contract.

Because of this vaguely defined public interest, educational authorities don’t allow price and value alone to determine who attends their institutions.  Were colleges to rely on strictly on price and value, the real prices that consumers would pay for elite higher education would most likely climb to unaffordable levels for all but the top 10 percent of households.

To be sure, elite education is already approaching this level of exclusivity, but it’s moderated by institutional aid, allocated on the basis of financial need.  Rich schools — like Harvard, Princeton, Stanford, or Yale — can subsidize capable students to such a degree that families need only pay a fraction of the true price, as determined by supply and demand.

Insanely Intense Competition

The role of the SAT is peculiar indeed.  Because institutions can’t rely strictly on a true market price, their allocation of subsidies is easily determined by a second-best solution: SAT scores.   It goes without saying that, in recent years, the competition for obtaining high SAT scores — sufficient to obtain access to richly endowed colleges and universities — has become insanely intense.

An SAT score is a simple market signal that correlates almost perfectly with the degree of selectivity of a given college or university.  Without the SAT or an equivalent clear market signal to partially substitute for price, the market would become insanely complex, involving transactions costs that would push up the price of higher education even higher, begging the question of who or what would bear the burden of these extra costs.

But the SAT avoids all that.  Owned by the College Board, a not-for-profit organization, the SAT serves some vague “public interest” in that it purports to measure merit of some sort, however flawed.  At the same time, the SAT easily sorts students into classes of student consumers who are most likely to “fit” the business model of a particular institution.  An SAT score in the 95th to 99th percentile easily identifies a pool of students from which a highly selective college or university choses which individuals to subsidize to one degree or another.  With highly sophisticated market segmentation techniques, risk-averse institutions know that for a given geographic location, a certain SAT score range will yield low-risk students who are “worth” subsidizing.

Low-risk students typically come from certain geographic locations and demographic markers, including income, wealth, home prices, education levels, and so on.   Low-risk students eventually graduate, find lucrative careers and join alumni organizations.   Alumni are called upon to donate back to institutions to build and maintain the very endowments that helped subsidize their education in the first place.  Alumni have children and grandchildren who become legacies who are provided generous admissions advantages. Thus the virtually self-perpetuating cycle goes on.

 Excluded from the Pool

To be sure, this highly competitive environment results in the exclusion of untold numbers of students.  This includes those who are essentially not allowed to even enter the competition because their unacceptable SAT scores exclude them from the viable application pool in the first place; and this competition also excludes the vast majority of students who, despite impressive credentials, are not selected from the viable applicant pool.

Yes, this competition yields results that might justifiably be called “unfair.” But the market seems to work with a fair degree of clarity and predictability.  That surely is worth a ton of value for both institutions and the larger society, and needs to be factored in any equation for reforming the meritocracy as we know it.

In order to compensate for these inequalities, Guinier argues that colleges and universities ought to employ selection methods that take into account “democratic” merit, including the many sorts of non-cognitive intelligences that help individuals function in groups and maximize the effectiveness of groups.  She believes that replacing “testocratic” merit with “democratic” merit would ultimately, be in the best interest of democratic society.

But I believe she discounts the degree to which existing admissions systems already take into account talents and skills that are not necessarily captured by classroom grades and test scores.  For the relatively high-scoring students who do make the pool of viable candidates, colleges do look carefully at non-cognitive factors and experiences that might tip the scales.

What’s more, a number of colleges and universities have in recent years become “SAT optional,” meaning that students can chose to submit test scores or not.  Obviously, those who choose not to submit scores must demonstrate merit in a variety of other ways that include Guinier’s “democratic” merit.  At some major universities, such as the University of California, academic measures still predominate, but lower-scoring students do have the opportunity to demonstrate how they have overcome barriers of poverty and disadvantage, providing a larger context in which to interpret their modest SAT score.

In the end, there is good news and bad for Guinier.  The bad news is that history, habit, and the nature of the higher education marketplace have made her book largely irrelevant.  Testocracy is here to stay and will continue to play a decisive role in American higher education. But, the good news for Guinier is that the enterprise is flexible.  Exactly what the public interest really is remains sufficiently vague. That means that colleges and universities are free to modify testocracy on their campuses as they choose. There will be ample opportunity for experimentation and discovering new and interesting ways to tap into the nation’s vast pool of undiscovered talent.  There’s no doubt the country cannot afford to waste human talent.  But, unless and until the courts or legislatures or boards of trustees settle once and for good exactly what “merit” should mean — a certainty never likely to be achieved — we would do well to stop pushing this particular boulder. For better or worse, it has become unmovable.


As a former journalist who joined academe, I was often struck by the obscurity of administration-faculty communication. Murkiness prevailed, along with the absence of clear subjects and verbs, and worse: the absence of clear meaning and intention. “Say what you mean and mean what you say” was more like “say it sort of like you mean and maybe mean what you say more or less without really saying anything.”

Why the need for obfuscation in running American colleges and universities? That higher education in a democratic society isn’t an isolated priesthood should be obvious, but it’s apparently not obvious to the academic culture that perpetuates these language crimes. The rest of us have too much at stake to permit higher education to get away with murkiness.

In a business as complicated as higher education, with several layers of authority often competing for power and control, communicative incompetence leads inexorably to a breakdown of the system itself — hence the need for books such as “Locus of Authority,” by William G. Bowen, former president of Princeton, and Eugene M.Tobin, former president of Hamilton College.

Vagueness and Doubt

Higher education’s problems with “shared governance,” particularly the appropriate roles and responsibilities of faculty, is the subject of Bowen and Tobin’s book. The phrase itself is emblematic of higher education’s language problem. The authors themselves question whether the phrase is even helpful in public discussion — its vagueness the very reason for their doubts. The authors are leading figures in higher education and are clearly aware that, ultimately, the public must understand why this seemingly obscure subject is important. Indeed, it’s evident that the authors struggle to convey their argument with the forceful clarity required for public understanding.

“At one point in our research were were inclined to drop references to shared governance altogether and to argue for avoiding use of the phrase,” the authors write. “We were troubled by the vagueness of the concept, the lack of even rough agreement as to what it meant, and the inclinations to use the phrase in sloganeering efforts of various kinds.”

Although the authors chose, in the end, to accept the term shared governance as “here to stay,” in the same breath they add that the phrase “cannot, however, be expected to settle most issues of consequence having to do with the precise definition of faculty roles (the subject of their book!) — it remains too amorphous, and subject to too many interpretations, to serve that purpose.”

Hence, Bowen and Tobin reluctantly chose obscurity over clarity, apparently for the sake of habit in the higher education priesthood. It’s no wonder, then, that American higher education is often viewed as undecipherable and out of touch with the American mainstream.

Hard and Soft Power

Whether a symptom or cause of its ongoing language problem, modern higher education is in the throes of a power struggle. The conflict is between longstanding, legally designated authority — what I would call the “hard” power of trustees and their appointed administrators — and the “soft power” of the faculty. Undeniably, faculty are the heart of the academic enterprise. If higher education’s central public purpose is the discovery, creation and dissemination of knowledge, that purpose alone bestows the faculty with an undeniable claim to power — despite the absence of explicit ownership rights provided under state laws.

Historically, Bowen and Tobin point out, faculty power within higher education has ebbed and flowed, largely depending on their market power at the time. In Colonial times, for example, the earliest American colleges struggled merely to find capable teachers. Course offerings were minimal and faculty were treated as lowly tutors and hired hands.

Eventually higher education grew up, fueled by population, demography and national wealth. By the early 20th Century, the fundamental power structure of colleges and universities, which would last for the next 100 years, solidified. The so-called “Golden Age” of American higher education emerged after World War II, characterized by phenomenal surge in high school graduates (the Baby Boom) and the revolutionary shift in national education policy, holding that equal opportunity to higher education should be available to all U.S. citizens, regardless of economic or social background. That policy shift produced the GI Bill and unprecedented percentages of high school graduates seeking higher education.

‘Absolutely Blunt’

Bowen and Tobin argue that those halcyon days of the Golden Age are over, a result of diminished market power of the Ph.D. class, the rise in adjunct and non-tenured academic labor and last, but not least, the Digital Age itself.

And that brings us to the title that actually describes this book: “Rethinking Faculty Power in the Age of Online Learning.” Of course, Bowen and Tobin, could never get away with such a blunt description of their work, however more apt than the politically correct, milquetoast language of their peerage. To their credit, recognizing that a moment of clarity was necessary for their argument to be actually heard, the authors become admittedly more direct 173 pages into the book, in the penultimate chapter.

“To be absolutely blunt, it is time for individual faculty to give up, cheerfully and not grudgingly, any claim to sole authority over teaching methods of all kinds,” they write.

Through the Golden Age, academic standards, content, teaching methods and so on became the uncontested terrain of the professoriate and their academic departments. But “Locus of Authority” argues that the digital age has altered this landscape to such a profound degree that universities can no longer cede to faculty the ultimate authority on the methods used to convey knowledge.

They cite numerous examples of institutions in which long-held assumptions and habits of faculty control over teaching methods thwarted systemwide efforts to create online programs of a sufficient scale. This list includes the University of California’s failed effort at adding a virtual eleventh “Global Campus” to the existing brick and mortar ten campus system. On the other hand, the authors praise CUNY’s “Pathways Initiative,” which overcame “paralyzing” local campus rules to establish system-wide reforms that increased completion rates and lessened the amount of time students took to earn their degrees.

With the tools of digital technology at hand, it’s no longer feasible to separate teaching methods from such vexing issues as college costs, productivity, efficiency, student access, equity, stratification and even graduation rates, Bowen and Tobin argue.

“Our purpose right now is simply to emphasize that the technological advances underpinning online learning argue against compartmentalized decision-making and lead inexorably to the need for collaborative approaches,” they write. “In short, these technological advances compel us to argue for a form of ‘shared governance’ that blends multiple perspectives and takes full advantage of faculty expertise — but that leaves final authority for most of these complex matters with administration and trustees.” (my emphasis.)

Administrative Hordes

“Locus of Authority” falls short in offering some realistic scenarios and mechanisms for just how their vision of a more “horizontal” decision-making structure would work, claiming that specific ingredients of this modernized view of shared governance need working out on a case by case basis. But the devil is in the details, isn’t it? Indeed, some critics would argue that the authors’ modernized vision of faculties’ rights and responsibilities amounts to just one more shot across the bow in a battle to diminish the faculty’s value in the whole enterprise.

In his recent book, “The Fall of the Faculty,” Benjamin Ginsberg argues, for instance, that administrative hordes are overrunning universities with useless layers of bureaucracy that have scant bearing on the higher education’s main job of teaching and learning. In an interview with Inside Higher Education, Ginsberg said this “administrative blight” was the result of “ambitious presidents and provosts” seeking ways of “enhancing their own power.”

I doubt that personal ambition and power grabbing account for even a small share of the large growth in administrative personnel in recent years. Other more fundamental factors are at play, including institutional ambitions to enhance prestige in the academic arms race, resulting in excessive spending on all the (non-instructional) elements that are perceived to be prestigious, including star faculty and big-budget capital programs. I should note that governing bodies themselves, not administrators per se, often endorse and encourage these costly efforts at prestige building.

Nevertheless, faculty’s fear of administrative excess is real, and unfortunately, “Locus of Authority” does not adequately address these fears — except to broadly suggest that faculty should always have a place at the table. The “proverbial bottom line,” the authors contend, is that faculty shouldn’t have the authority to veto system-wide efforts that might infringe on professors’ traditional roles as experts in the production and dissemination of knowledge.

And yet, they suggest, higher education’s teaching and knowledge experts should be present and accounted for while trustees and administrators devalue faculty expertise before the faculty’s very eyes. Faculty do have reason to fear that their fundamental role in higher education, as experts in teaching and learning, is being devalued. And talk of encroaching even further on the faculty’s role, such as what we find in “Locus of Authority,” is likely to inflame their distrust in governing boards and administrators.

Although “Locus of Authority” addresses the difficult issues of power and control within the university, I wonder if their perspective is skewed by an overemphasis on online teaching. The authors have a special stake in this topic. Bowen is author of the recent book, “Higher Education in the Digital Age,” which, like “Locus of Authority,” was sponsored in part by ITHAKA, a non-profit organization devoted to exploring how digital technologies can be blended into higher education to address such larger problems as access, equity and educational outcomes.

A Third Way

I would suggest that “Locus of Authority” is emblematic a technocratic mindset that begins with a technological solution — online learning — and then tries to find ways to employ the technological solution to reform higher education, with or without faculty support. That’s exactly the kind of mindset that leads to mistrust, messy communication and to, ultimately, systems that seem incapable of true reform.

But perhaps there is a third way. I’m referring to a way that starts with real leadership at the top of the food chain, in this case, the duly appointed governing boards.

In a 2013 essay in Trusteeship, a magazine published the Association of Governing Boards of Universities and Colleges, former Harvard president Derek Bok argues for exactly this approach. Bok, who collaborated with Bowen on “The Shape of the River,” one of the most noteworthy books on higher education in recent years, suggests that higher education institutions must first accept responsibility for making little or no progress in addressing the two most pressing problems of higher education in the larger society: persistently low rates of college completion and disturbing inconsistencies in the quality of undergraduate education.

While these failures are well known and understood, the behavior of both faculty and administrators suggest that they are either blissfully ignorant of these problems or that they function in a broken system that seems inherently incapable of addressing them. The crux of the problem, Bok suggests, is an absence of leadership at the top, resulting in an ineffectual system of shared neglect, not in a purposeful system of “shared governance.”

“The persistent failure of so many institutions to do more to address the major problems facing higher education today seems to suggest a weakness in the governance of many colleges and universities,” Bok writes. “While responsibility for this neglect rests primarily with academic leaders and their faculties, boards must surely accept some of the blame.”

Too often, he suggests, trustees have relinquished their authority and responsibility to ambitious presidents and administrators who define their jobs as maximizing institutional reputation and prestige.

“Few boards have been notably successful in helping to shape the goals and priorities of their institution,” he writes. “All too often, board members have acquiesced in a vision of the future that concentrates on expansion, on tangible objectives such as new buildings and new degree programs. Above all, they have focused on a conventional view of progress that attaches more importance to raising the SAT scores of entering students than to increasing what they learn after they enroll—a view that pays less attention to improving the quality of what their institution already does than it does to climbing the ladder of conventional prestige.”

Thus, the real problem of “shared governance” isn’t that colleges and universities have a cornucopia of fantastic new teaching technology going to waste because of faculty naysayers. The failure of governance starts with boards of trustees, not with intransigent professors.

If colleges and universities were to seriously focus on the most pressing problems of higher education that would actually serve some public interest, then active, better informed boards of trustees must convey that message to administrators and faculty. Trustees must hire and fire presidents according to how well they execute their jobs in solving the problems that they’ve been appointed to solve.

Bok suggests than when publicly accountable trustees clearly convey the university’s mission to solving problems that matter to their communities, then administrators and faculty are likely to overcome turf battles and institutional inertia. It’s not the trustees’ job to solve the problems of higher education, but to employ the right people who can and will do so.

Administrators and faculty might find, for example, that online learning is not a panacea, but one of several important elements in addressing the problems of deteriorating academic quality, grade inflation, and low graduation rates. As another example, trustees of a regional research university might find that solving the most pressing problems would mean to stop trying to compete with large national universities for research funding, and devote more resources to teaching and learning.

“Once board members decide that genuine shortcomings exist,” Bok writes, “there is much that they can and should do, consistent with their limited role, to ensure that the administration and the faculty devote careful attention to the issues.”

When viewed through the lens of leadership, of real people communicating clearly and sincerely in an attempt solve real problems, higher education’s language problem will go away. And with that, silly academic speak and terms like “shared governance” will be seen for what they are–a useless annoyance to the job at hand.


How Colleges Fail Their Students—and Society

American higher education has seriously misguided priorities. Across the country, schools are lowering their academic standards while increasing amenities. Indeed, given the proliferation of luxurious dorms, world-class student exercise facilities, and gourmet dining halls, one might say that American colleges and universities emphasize recreation over education.

Unsurprisingly, students are losing out. In their new book, Aspiring Adults Adrift: Tentative Transitions of College Graduates, Richard Arum and Josipa Roksa show that college graduates pay for the decline in academic rigor in low labor market success and unsatisfied employers. Also, poorly trained graduates are delaying their transition into productive adulthood.

Continue reading How Colleges Fail Their Students—and Society

What STEM Crisis? There Isn’t One

Hardly a day goes by that policymakers, educational leaders and corporate executives don’t lament the “STEM crisis,” the alleged shortage of American workers trained in science, technology, engineering and math.

These warnings come so often that the “crisis” is now perceived as an uncontested fact. Tapping America’s Potential (TAP), for instance, a group of some fifteen leading business associations from the Business Roundtable to the U.S. Chamber of Commerce, wants to increase the supply of STEM graduates by 400,000 each year.

Continue reading What STEM Crisis? There Isn’t One

Can Philology Save the Humanities?

In his new book, Philology: The Forgotten Origins of the Modern Humanities, James Turner has written a rich intellectual history of what many American scholars would describe as the long lost art and science of philology.  A rebirth of philology is also long overdue, says Turner, who is the Cavanaugh Professor of Humanities at the University of Notre Dame. The book offers a compelling solution to the splintered, increasingly irrelevant state of the humanities at modern universities.  A return to philological thinking, Turner agues, would be an antidote to the loss of erudition, depth, breadth, and other maladies that plague the humanities in higher learning.

“The humanities today face a crisis of relevance,” the book’s jacket states. “Understanding their common origins — and what they still share — has never been more urgent.”

Continue reading Can Philology Save the Humanities?

The Liberal Arts Are Good For Your Career

Is majoring in the liberal arts a bad economic decision? Debra Humphreys and Patrick Kelly don’t think so. In their recent study for the Association for American College and Universities (AACU), they show that liberal arts majors enjoy comparable long-term career prospects as students who obtain degrees in more “useful” fields. Students who study the liberal arts do about as well as most college graduates in terms of annual salaries and employment rates. Furthermore, more than 21 percent of liberal arts and humanities graduates work in the top five professions in terms of annual salaries.

The authors also point to recent surveys showing that employers place a high value on the critical thinking and learning skills that the liberal arts cultivates. Eight in ten employers agreed that “all students should acquire broad knowledge in liberal arts and sciences.” In fact, almost 30 percent of employers surveyed said they wanted employees to have a range of knowledge and skills applicable to a wide range of jobs.

Recently, however, liberal arts graduates pay for their brain candy when it comes time to look for a job. Even those who value the liberal arts would have to agree that these are not the best of times for advocating a liberal arts education to the parents and students having to make big decisions investing in college and what to study.  The Great Recession exposed the vulnerability of a liberal arts education to a remarkable degree.

The “worthless” image of the liberal arts is not entirely without foundation. Fully 9.4 percent of recent graduates in the liberal arts and humanities (22 to 26 years old) were unemployed during the recession, according to a Georgetown University study last May. The average salary of recent liberal arts graduates was just $31,000.  Faring not much better were recent graduates in Biology, nearly 8 percent of whom were unemployed. Like liberal arts majors, the employed biology grads also earned an average of just $31,000.

Another important reason that liberal arts degrees might be considered worthless is that you need a graduate degree to make them less worthless.  In fact, graduate degrees make all majors far more useful in the job market. Turns out that if one plans on going to graduate school, studying the liberal arts and sciences as an undergraduate is actually useful. Compared to a 9.4 percent unemployment rate for recent liberal arts graduates, just 3.9 percent of those with graduate degrees in the liberal arts are unemployed, which compares favorably to most other graduate degree majors, including accounting, mathematics, and engineering, according to the Georgetown University study.

Still, the annual earnings for those with advanced degrees in the liberal arts are a comparatively low $65,000. By contrast, an advanced degree in engineering yields an average salary of $106,000, accounting MBA’s earn an average of $90,000, and an advanced degree in math will earn someone about $20,000 a graduate degree in the liberal arts.

Clearly, the Association of American Colleges and Universities and other advocates of a broad liberal education are putting the best face on such economic realities. If one is willing look beyond immediate employment prospects and considerable salary differences, and consider the lifetime value to individuals, employers and communities, then even the most ardent critics would probably concede that the liberal arts aren’t completely worthless.

How to Make MOOCs Work

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The ongoing hype over MOOCs (Massive Open Online Courses) parallels the cold fusion debacle of 1989. The technology sounded like a panacea, a cheap and endless source of energy.  Then it flopped. Another great notion down the drain.

Similarly, educational entrepreneurs once believed that massive online courses would revolutionize higher education. MOOC providers, partnering with some of the nation’s best universities, such as Stanford, Harvard and MIT, would offer free or cheap online lectures and courses taught by the nation’s most talented college professors.  Subsequently, virtually anybody with a computer and an internet connection could receive a first-rate education.

A widely discussed University of Pennsylvania study of MOOCs, however, dampened those hopes. Analyzing some 1 million users of 16 courses Penn offered via the MOOC provider Coursera, researchers found that an average of just 4 percent of MOOC users actually completed the courses. The completion rate ranged from 2 percent to 14 percent, depending on the type of course, the intended audience, and so on.  “Emerging data…. show that massive open online courses (MOOCs) have relatively few active users, that user “engagement” falls off dramatically–especially after the first 1-2 weeks of a course–and that few users persist to the course end,” the study said.

This is not good news for the great MOOC hope.  Indeed, the innovation offered by MOOCs is meaningless if their providers cannot concretely how they will address the biggest problems higher education faces today, including ever-growing institutional costs, administrative inefficiency, rising student debt, and limited access for students from lower socio-economic backgrounds.

The last problem is of particular concern. The gaps between wealthy, elite universities and lower-tiered institutions has led to even greater stratification. One consequence of this trend is a growing concentration of knowledge and innovation among the “cognitive elite” trained at top-tiered institutions.  Meanwhile, low-ranked institutions have been designated as the gates of opportunity for lower-income and first generation students, without benefiting from sufficient resources to actually do that job well. The result has been a growing concentration of poor quality and mediocrity at the bottom.

Misunderstanding MOOCs

Unfortunately, much of the hype over MOOCs as a seductive, come-hither innovation was fueled by the media’s fascination with, and overemphasis on, elite universities and star professors.  But most of the online learning world has nothing to do with MOOCs. With or without MOOCs, online learning has become an essential part of higher education instruction over the past 15 years, either as complete courses or supplements to existing face-to-face courses.

In contrast to the Penn study’s grim findings, hundreds of “micro” level online offerings at all types of institutions have actually enhanced students’ engagement and persistence.  For example, the National Survey of Student Engagement — the annual go-to source for trends in student engagement and institutional effectiveness in higher education — has identified several key “learning strategies” that lead to more engaged students.  These include the seemingly simple and obvious, such as taking notes when reading, summarizing and organizing new information, and creating a study friendly environment.  In other words, students who are taught to use these methods become active learners, who also teach themselves to learn. As opposed to passive learning, in which students expect professors to hand feed them information only to be regurgitated later, active learning leads to better-prepared students and more satisfying educational experiences.

Contrary to popular belief, online learning appears to enhance active learning even more than in most traditional settings. Scores of yeoman-like online courses, geared toward matriculating students at colleges and universities of all shapes and sizes, have proven to be surprisingly effective.

For first-year students whose entire workload is online, fully 80 percent said they had ongoing opportunities to summarize what they’ve learned while taking the course. Just 63 percent of first-years taking no online classes were encouraged to summarize their learning milestones along the way.

What’s more, compared to taking traditional courses, online learning promotes greater engagement in learning by college seniors. Compared to 62 percent of seniors taking all traditional courses who summarized their notes after class, fully 73 percent of seniors enrolled only in online classes did so.  Another key outcome in college work is the ability to identify the most important aspects of a given reading assignment.  Some 92 percent of seniors taking all courses online had learned this skill — almost 10 percentage points higher than students having no online courses.

So it’s not the technology of online learning via MOOCs that’s the problem. The technology appears to be sound — and in some aspects even superior. The issue is how MOOCs have been deployed in higher education. Without being rationally integrated into the existing higher education system, MOOCs will continue to founder.

As matters stand, MOOCs come in all shapes, sizes and types geared to a huge variety of users.  In the Penn study, for instance, researchers classified MOOCs in terms of their apparent target audience.  The largest number of MOOCs was “enrichment” courses that anyone might take for the pure pleasure of learning.  These had titles such as “Growing Old Around the Globe,” “Listening to World Music,” and “Greek and Roman Mythology.”  MOOC’s aimed at learners in specific occupations were the next largest category, with offerings such as “Introduction to Operations Management” and “Fundamentals of Pharmacology.”  At the bottom of the list in terms of the number of courses were those geared toward college students, such as Principles of Microeconomics and Calculus.

In other words, the MOOC landscape is a hodgepodge. MOOC providers have built it, and “they” are showing up, intrigued by the novelty and the unusual opportunity to learn from prominent professors at top schools. But, students aren’t hanging around long enough to get any lasting benefit from the courses.  And the reason they aren’t hanging around is that the lion’s share of MOOC students doesn’t have enough skin in the game.  For example, according to the Penn study, the most common demographic group enrolled in MOOCs were well-educated “wealthy” males from the United States, whose participation in a given course declined rapidly after just a few weeks.

Making MOOCs Work

For MOOCs to work, a couple of things need to happen. First, MOOC providers must figure out how they can package their products for credential-granting institutions. In turn, a given institution must determine how, where — and if — MOOCs fit into an institution’s general competitive advantage.  That will depend on the nature of the institution.  A top-tiered research institution employing renowned faculty of its own would probably have no place for MOOCs. In fact, such institutions are the very ones exporting their products to institutions on lower tiers of the higher education hierarchy.

On the other hand, a public community college system, confronted with limited capacity and resources to meet student demand for key courses, might determine that a few strategically placed MOOCs would make economic sense if the price is right.  In the future, educational offerings at colleges and universities are going to look like a wheel, with MOOCs being only one spoke.  The instructional wheel will look very different from institution to institution.

The notion that MOOC providers must “package” their products for specific types of institutions was surely not the initial inspiration for MOOCs. Their founders envisioned MOOCs as a high-quality, low-cost alternative to formal degree programs, available globally to any learner with a computer and Internet connection.

But for MOOCs to be more than entertainment for mostly affluent, well-educated hobbyists, they will also require a more direct and trustworthy connection to the employment market. For that to happen, the job market would need to change in ways analogous to how military strategy has been revolutionized in recent years, shedding the vestiges of slow and massive deployments, replaced by smaller, faster and highly targeted ones.

Instead of burdensome and time-consuming recruitment of individuals with degrees and credentials obtained through institutions, some employers might find that, in some instances, they can quickly hire MOOC-trained individuals as short-term experts for specific high-level tasks and projects. This would require a dependable credentialing system that employers have designed individually or perhaps collectively.

The matching system between employers and workers needs to allow for less costly production of new, highly skilled workers. This suggests a hiring system less focused on degrees and credentials and more focused on individual knowledge, talents and creativity.  In other words, MOOCs might have an important role in a true meritocracy, in which motivated individuals can learn to become experts for particular tasks and be recognized for their excellence in the employment market.

The market will eventually sort out these things out. Despite mediocre results so far, it’s highly likely that MOOCs will succeed on some level and will claim an important piece of territory in higher education.  But MOOCs will never be the be-and-end all of higher education, or a panacea that will solve its many problems, despite the waxing and waning media hype. Realizing this is the first step to making MOOCs work.

Derek Bok’s Magnum Opus


Americans expect the impossible of their higher education system. We demand that it serve dozens of different constituencies; the political and public agendas of left and right; national economic imperatives; and contribute to the world’s scientific progress. Moreover, we require that the system perform these tasks equitably, maximizing the welfare of well-off and poor alike.

It’s no wonder, then, that criticisms of higher education have mounted in recent years. From the right, critics have charged that American higher education, fueled by excessive government subsidies, is bloated by wasteful overspending and overreaching. Critics on the left allege that higher education has lost sight of the American ideal of equal educational opportunity, promoting agendas that systematically enrich the wealthy and punish the disadvantaged.

 Now comes former Harvard president Derek Bok, weighing in on these controversies with a middle-of-the-road analysis of higher education’s present condition and prognosis for its future.  As its weighty title suggests, Higher Education in America is an exhaustive treatise on the subject, what the book’s promoters call the Bok’s “magnum opus.”

 An Encyclopedic Approach

At almost 500 pages, the book covers a great deal of ground, including the state of undergraduate education; professional education, including medicine and law; and, finally, the scientific research efforts of higher education system. At times, the book feels like a mis-titled Encyclopedia of America Higher Education, with prose as uninspired as an encyclopedia entry. Nonetheless, Bok has given patient readers a thought-provoking book that defies political stereotypes.  Because of its nuances, the book is a refreshing change from the openly hostile diatribes attacking higher education in recent years.

One might expect a former president of Harvard to be a staunch defender of, an apologist for, the status quo, but that is not the case. Bok does have an argument here, and he builds his critique slowly and without undue alarm.  He suggests that the higher education system as we know it, given the larger context and constraints that we place on it, is perhaps unsustainable. Indeed, he argues that the very nature of the higher education enterprise may be the root of its own demise.

Similar to other knowledge-intensive enterprises, the value of higher education’s output is tough to measure — even if we were to agree on what exactly its output is.  As an enterprise that intensively employs knowledge workers, who produce knowledge and train others how to work with knowledge, the paucity of performance measures leads to outcomes that threaten the whole enterprise, Bok argues.

Consider this scenario. Policymakers want to hold public colleges and universities accountable for any state subsidies they are provided. Legislatures want answers to their questions about productivity of colleges and universities.

What Legislators Say

“Tell us what you are doing to deserve all this spending,” legislators demand.

“Well, we are doing ground-breaking research and training the next generation of lawyers, accountants and engineers,” the university shouts back.

“But what are taxpayers getting for their money? You should be operating like any business,” says the Legislature.

To which the university answers, “Sorry, you can’t apply standard business measurements to higher education.”

And around this dance goes until legislators start withdrawing from the higher-education business by reducing state subsidies. “Since you can’t show us what good you’re doing this state, you’ll have to find your own money.”

Hence, the university starts jacking up tuition and fees it charges students.  In fact, state subsidies as a percent of public college and university revenues declined from 32 percent in 1980 to just 18 percent in 2009 — resulting in large tuition hikes to make up the losses. As a result, students borrow far more to meet higher costs. Other students decide the price is too high to even pursue a degree.

The inherent financial vulnerabilities of higher education lead to more unintended consequences. The scarcity of state resources intensifies the competition among colleges for private donations and funding. Overzealous alumni groups and boosterism threaten to weaken academic standards, as university backers lobby for relaxed standards and admissions policies for recruited athletes and other students favored by donors and alumni.

Activities Unrelated to Learning

Indeed, greater competition among colleges for funding leads to activities that have little or no bearing on teaching, learning and other core aspects of higher education.  The increasingly intense race for prestige and reputation in higher education is but one example. The prestige race has led colleges and universities to place undue emphasis on SAT scores of entering freshman and other pseudo-indicators of quality that have virtually no relationship to what students actually learn and achieve on campus.  These measures, do, however, enhance reputation, as measured U.S. News & World Report.

The prestige race also leads to empire building, as universities get caught up in building bigger and better facilities, launching multitudes of various enterprises in health care, entertainment, etc., while striving to move the college or university to bigger and “better” place in the higher education hierarchy.  Although greater prestige produces more private donations and bigger campuses, it also raises costs and effort to keep the largess going.  But for all this, the prestige race creates little value in terms of serving the public good.

To all this, Bok says American colleges and universities need to refocus on their core missions, asking themselves what is in the public’s interest, not necessarily in the interests of politically motivated university presidents and wealthy donors. “The public will often benefit more if four-year colleges concentrate on finding ways to lower dropout rates and improve the quality of the education they provide, instead of devoting their energies and resources to creating new master’s and professional doctorate programs in an attempt to become comprehensive universities,” Bok writes. “A metropolitan university that excels in teaching students is likely to add more value than it would by becoming medium-quality research institution.”

He continues, “Even so, because the contributions from first-rate teaching are hard to evaluate and seldom win public acclaim or achieve much prestige, they tend to be overshadowed by more tangible, measurable gains, such as higher SAT scores, new programs, and successful fund drives.”

The Good, Bad and Ugly

In the end, Bok’s effort amounts to a catalog of pluses and minuses, costs and benefits, and a rather complete list of the good, bad and ugly in American higher education. But despite all the problems, he invokes that often heard refrain about our system, that, all things considered, Americans still have the best system of higher education in the world.

But, he cautions, two of the many problems with higher education deserve immediate attention. As has been repeated by many experts and observers, Bok says that dwindling college completion rates must be dealt with sooner rather than later. Failing to make headway on this problem will not only lead to diminished economic growth for all Americans, but will make inequality even worse between the nation’s haves and have-nots.

The second most pressing issue is related to the first: higher education’s evolution over the last 50 years from a privilege of elites to what is now effectively a system of universal post-secondary education has been accompanied by a hazardous decline in academic standards and excellence.

Disturbingly larger numbers of high-school graduates now pursuing college degrees are not well prepared for college-level work. Add to that the dubious efforts of many colleges, striving to climb the higher education hierarchy,  creating more doctoral programs to create “research” that few scholars cite or care about. As a result, the quality of undergraduate education has suffered.  In fact, the combination of empire building at comprehensive universities and ill-prepared students being admitted to these schools has been a poisonous mixture for academic quality.

What is to be done? The answers might be found by examining higher education’s intrinsic flaw — the paucity of guideposts, standards and measures that allow consumers and policymakers to evaluate whether colleges and universities are serving the public well or not well.  Unless higher education can find ways to monitor progress in teaching and learning, institutions will continue to compete in non-productive ways, leading to overspending on efforts that matter little for teaching, learning and research that actually matters for the scientific community at large.

The ‘Calculator’ That Gets You Into College


Sophisticated consumers of higher education always understood that unless they were very wealthy they would rarely have to pay the full sticker price of college. By contrast, information-poor students, often from lower income families, were often unaware that a college’s stated price was not really the price. Believing that high-priced schools were clearly unaffordable, many high-achieving students from lower-income families would rule out even applying to such colleges, unaware of the relationship — peculiar to American colleges and universities — between sticker price and net price. 

An amendment to the Higher Education Act that went into effect on Oct. 29, 2011 was supposed to alleviate these uncertainties. It required every institution participating in federal financial aid programs to install and display “net price calculators” that would allow families to estimate the net price unique to their circumstances. Congress intended this requirement to increase transparency, and hoped the calculator would be easy to find and relatively simple for students and parents to use. Many experts thought the calculator would be a game-changer.  Continue reading The ‘Calculator’ That Gets You Into College

Average Tuition Discount for Freshman: 45%


The higher-education story of the week is about cost: colleges and universities are cutting prices. At least that’s the impression one gets from media coverage of the annual report from the National Association of College and University Business Officers (NACUBO). “Colleges Cut Prices by Providing More Financial Aid,” states the Wall Street Journal. “Private U.S. colleges, worried they could be pricing themselves out of the market after years of relentless tuition increases, are offering record financial assistance to keep classrooms full.”

Many colleges are “lowering” prices, but not because they’re messing with their hefty sticker prices. In fact, American colleges and universities engage in a massive system of price discrimination, offering students varying discounts from the sticker price depending on family income and assets, number of children in college, and other family financial factors. While the amount of the discount largely depends on a family’s ability to pay for college, many colleges also offer price breaks to students based on “merit,” as measured by SAT scores and high school GPA. 

Continue reading Average Tuition Discount for Freshman: 45%

Is Online Learning for Steerage?


In my 1996 book Generation X Goes to College, I predicted that virtually anyone
with a computer and a modem would have access to the storehouse of human
knowledge. As a result, higher education as we know would become an
anachronism, if not obsolete. The university’s status would diminish because it
would lose its competitive advantage in disseminating information. 

The recent emergence of MOOCs (Massive Open
Online Courses), however, raises obvious questions.  Are these new teaching methods as effective,
in terms of student performance, as real-life classrooms? Can these new
technologies bring down higher education costs? Former Princeton president
William G. Bowen takes on these questions and others in his new book Higher-Ed in the Digital Age. Once a
skeptic, Bowen now concludes that online learning programs will reduce the cost
of higher education without harming student learning outcomes.  

Continue reading Is Online Learning for Steerage?

Consumer Deals Coming to College Pricing

The end of higher education as we know it is no myth. Say you have three children and they’ll come of college age about two years apart. That’s a lot of money. But what if the college were to make you a deal? Buy one college education at full price, get the next college education for half off; and finally get the third four-year degree free. Or purchase two full-pay college degrees for the kids and, if they stay and graduate, you get a cash-back reward of $2,500.

This and similar deals are not farfetched. As The the Wall Street Journal recently reported, some private liberal arts colleges are experimenting with just such arrangements. The Journal cited Alma College in Alma, Mich., for its innovative pricing.  “We’re 127 years old, but doing business the same way as we always have isn’t going to work for the next 127 years,” Alma President Jeff Abernathy said.

Traditionally, colleges package a tuition/financial aid offer, which includes the sticker price less institutional aid, grants and loans.  Colleges engage in a system of price discrimination by extracting the greatest revenue possible from each student, priced individually. Some students pay relatively low net prices and others pay much higher net prices, depending on the student’s academic attractiveness, family income, and so on.  It’s a highly complex pricing system that would make the intricate market for wholesale electrical power seem like child’s play.  Complex, but also quaint, weird, and highly localized. Compared to most industries, the tradition-bound higher education market is antiquated in terms of providing consumers with easily understood information on pricing versus value.

But the higher education industry is starting to mirror other industries. Take ski resorts, which traditionally charged customers hundreds if not thousands of dollars for a season pass. Then, about 10 years ago, a local ski area called Bogus Basin near Boise, Idaho, struggling with unpredictable snow and an unsteady customer base, decided to slash season passes to $199. But customers had to act quickly, because the sale price was limited to just a few weeks prior to the start of the ski season. Thousands of locals responded to the price cut, and Bogus solved its cash flow problem in one bold powder dump. The seemingly radical notion — that consumers do in fact respond vigorously to prices — caught fire and spread to other resorts.

Similarly, the higher education industry could borrow from an impending revolution in golf course pricing. Ryan Moore, the PGA touring pro, recently launched a new golf club management company in Washington state, consisting of a handful of older Tacoma area courses that were struggling to stay afloat due to inflexible prices, weak demand, and stiff competition.

Sound familiar? Moore’s big idea was to offer customers three monthly pricing packages, ranging from around $49 per month to $99 per month.  Moore found a way for the pricing to better match customer demand.  Now resembling the business model of a health club, golfers agree to pay the monthly fee for a year or two. As a result, rounds have picked up, course restaurants and bars are busy, and steadier cash flow has replaced periods of slack demand and fair weather golfers.

Like golf courses and ski resorts, higher education pricing is steeped in tradition — tradition that will inevitably lead to extinction unless colleges and universities find more economical ways to meet customer needs.  Higher education is ripe for innovations in pricing, facing familiar conditions of under-used capacity and inconsistent cash flow. What’s more, these problems are is likely to worsen as the growth of high school graduates is expected to slow over the next several years.

Without a pricing revolution, many higher education institutions will fail sooner rather than later. When colleges are willing to shed vestiges of the past and adopt pricing schemes that better meet the needs of families and students, the happy result will be steadier business, more predictable enrollments, higher graduation rates, and more satisfied customers.

Stop Dumping on Student Loans

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Some critics have called for a near-total rollback of the government’s involvement with higher education, including the end of subsidies to low-income students.  Last month, for instance, Jarrett Skorup of Michigan Capitol suggested that state and federal governments should  quit subsidizing higher education altogether because the aid fails to improve individual economic prospects or the nation’s economic vitality. 

Similarly, Richard Vedder argued here that even liberals should support eliminating public financial aid for low-income students because “on balance (it) has increased income inequality in the United States.”  And, of course, there is Ron Paul, who once told NBC News that federal financial aid for needy students should eventually be terminated “because there’s no authority to do this…they’re a trillion dollars in debt, we don’t have any jobs for them, the quality of education has gone down. So, it’s a failed program.” Continue reading Stop Dumping on Student Loans

Let’s Expand Pell Grants Now

Twenty three billion more. That’s what it would cost taxpayers over the next 10 years to restore the federal Pell Grant to its purchasing power 40 years ago.  

The early 1970’s were the heyday of the Pell Grant, the federal program targeted to low-income students.  But now the maximum Pell Grant of $5,500 is woefully insufficient in today’s higher education market, having risen just $1,400 in the last 10 years. Even while the total program appropriation in FY 2012 was more than $41 billion, a relatively small 8 million undergraduates from low-income families received Federal Pell Grants with an average award of just $3,706.  Fully 76 percent of the grant awards go to students whose families earn less than $30,000 a year. 

To remedy this bleak situation, the Institute for College Access and Success advocates doubling the maximum Pell Grant award to $11,000. Their proposal will require the government to raise an additional $23 billion; accordingly, they have come up with a list of new revenue sources, such as levying a small tax on financial securities trades, increasing alcohol taxes, and eliminating certain tax deductions for college. Taking these steps would generate around $462 billion in additional revenue.

The ICAS’s calculations indicate that the United States has more than sufficient resources to make college affordable to millions of students who cannot obtain degrees because college costs are out of reach. As such, it’s conceivable that the Obama administration and Congress will trade middle-class tax breaks for more resources dedicated  to low-income students.  What the report fails to address, however, is that our politicians are slavishly devoted to the middle-class while low-income students and families have no political power. Unfortunately, well-meaning reports won’t change that. 

A Response on Cutting College Funding

Richard Vedder made the breathtaking assertion here yesterday that “public support of American higher education, on balance, has increased income inequality in the United States.” He claims we must “drastically” reduce government subsidies for education in order to attack income inequality.

He calls his view “non-orthodox.” I would just call it wrong.

Vedder states, for example, that income inequality between 1970 and today has increased “in tandem” with the growth in the percentage of adults with Bachelor’s Degrees. He suggests the relationship is causal: Because more adults have college degrees, the income gaps between everybody else and the rich are getting worse.

This is his proof that a more highly educated workforce leads to more economic inequality, not less. Similarly, we might also say that “in tandem” with the growth of income inequality in America has seen a steep rise in the number of double-car garages in American households. Therefore more double-car garages have caused more income inequality.

To follow Vedder’s logic further down the rabbit hole, in order to make income inequality not worse, it follows that the nation must reduce the numbers of double-car garages, i.e. the numbers of college-educated adults. That means government must tighten up on educational spending, financial aid, and other subsidies.

In short, government must drastically reduce or eliminate demand-side tools that effectively increase consumers’ wealth — and their ability to invest in education – or anything else, for that matter. And, while he singles out public investment in higher education as the problem, why leave it at that? Human capital investment is human capital investment, regardless of when it occurs. Why not attack the problem of income inequality by gutting government subsidies to first graders? According to every shred of evidence I know, in the long run Vedder’s “fix” would decimate wages and salaries, personal income and general spending and investment in the economy. In this bizarre world, sounds like a sure-fire way to exacerbate inequality, not cure it.

A little un-orthodoxy is often a good thing, a creative thing we need to help us solve serious problems. I regret to say that Vedder’s sort of un-orthodoxy is sadly wasted, and is no solution to income inequality or anything else.

A Liberal View of ‘Becoming Right’


a staffer with the U.S. Chamber of Commerce in the early 1970’s, would-be
Supreme Court Justice Lewis F. Powell Jr. penned his historic, if awkwardly
titled, memo, “Attack on American Free Enterprise System.”  In that August
1971 “confidential memorandum,” to the Chamber’s board of directors, Powell
called for an unprecedented effort on behalf of corporate America to fight back
against the dark forces of Communism and socialism — and their agents in
government, universities and the mass media — in order to save and preserve
conservative ideals and American capitalism.

Continue reading A Liberal View of ‘Becoming Right’

Let’s Be Serious About Higher-Ed

The naysayers started their nitpicking the day after
President Obama, in his State of the Union Speech, presented his plan to
kick-start America’s sputtering system of higher education.  George
Leef of the Pope Center said “Obama’s talk about getting tough with
colleges over tuition is pure political blather.”  Hans Bader and others offer
another off-center objection: we don’t need a higher education policy.
Rather, we must reduce bloat!  There is too much frivolous spending on
higher education’s darling programs, such as campus diversity
offices.  There is merit to closely examining the spending side of higher
education institutions.  No doubt many programs do not find the real
target.  But one can shut all the campus diversity offices at every
American college and university, and doing so would do nothing to raise
college completion rates.  In fact, targeting diversity offices for
elimination could well compound the completion problem because many of
the beneficiaries of those programs are the very sort of students who
need to feel more welcome on college campuses, long dominated by
relatively well-off white students, white administrators, and white

Continue reading Let’s Be Serious About Higher-Ed

More College Aid for Low-Income Families, Please

college campus.pngWhen individuals seek higher education, why should all of us have to pay? After all, individuals decide whether to seek a college degree based on their own calculations of expected costs and benefits. That taxpayers must bear the burden of financial aid to these individuals seems unfair.

Given the billions of dollars governments pay individuals to help finance their college expenses, taxpayers must be assured that their investment is not wasted.

In short, we would rather not be sucked dry to pay for C students — whose weak academic preparation makes them unsuited for higher education — just so they can party hard for four or five years.

In a policy paper released this week, Andrew Gillen, the research director at the Center for College Affordability and Productivity, says he has the solution to creating rationality in our messy and unaccountable financial aid system.
Continue reading More College Aid for Low-Income Families, Please

A Dubious Move by the University of Texas

If college and university officials finally want to solve
the longstanding problems ofmediocre
retention rates and pitiful graduation rates, then a magic, off-the-shelf
solution awaits them.

It’s called MyEdu, a private company that claims its website
will help colleges solve the problem of disappearing students. How? By
allowing students to see such titillating facts as professors’ official student
evaluations and the grade distributions for courses they teach.

Continue reading A Dubious Move by the University of Texas

Are Student Debt Levels Ridiculous?

Megan McArdle of the Atlantic, with a few strokes of her blog pen, has just solved the problem of too much student debt and the college affordability dilemma — all while ensuring access to higher education for those who truly deserve it. That is, for folks like herself.

First, bowing to the widely circulated claim that student debt levels are out of control, McArdle would severely tighten access to credit markets for students and families. With tightened access to credit, that would force universities to tone down their greediness. As of now, McArdle argues, we should blame the rising costs of higher education on easy loan money, which fills student budgets only to be siphoned off by money-hungry institutions.

Continue reading Are Student Debt Levels Ridiculous?

Does Student Debt Really Matter?

IOU.jpgIn a recent essay in The Atlantic, Andrew Hacker and Claudia Dreifus lament that most students have to take out college loans. They write: “At colleges lacking rich endowments, budgeting is based on turning a generation of young people into debtors.”

While Hacker and Dreifus blame the universities for encouraging students to take on more debt to pay for lavish facilities and other non-educational amenities, others focus on student debt itself as perhaps the key barrier to college facing millions of students from families with low and modest incomes. Indeed, entire organizations have been founded on that very notion, such as the Project On Student Debt.

Analysts who belong to the debt-is-bad school of financial aid policy are correct in noting that student borrowing increased dramatically in the past decade, ballooning 128 percent to more than $96 billion, according to the College Board’s annual survey of financial aid trends. On the other hand, federal grants and institutional grants mitigated the rising student debt. From 2000 to 2010, federal financial aid shot up 136 percent to more than $146 billion; and institutional grants rose 69 percent to more than $33 billion.

Continue reading Does Student Debt Really Matter?

For-Profit v. Non-Profit Colleges–Which Use More Federal Cash?


Are for-profit colleges and universities getting a raw deal from the government compared to their more elitist peers in the private non-profit sector of American higher education?

Vance H. Fried, writing in a recent policy analysis brief published by the libertarian think-tank, the Cato Foundation, argues just that.  Fried is a former private-practice attorney, oil company executive, and investment bankernow a professor of Entrepreneurship at Oklahoma State University. He targets private non-profit colleges and universities as the beneficiaries of federal largesse, waste and inefficiency. 

“Undergraduate education is a highly profit

Odd Tuition System: Big Sticker Price, Big Discounts

Tuition pricing for college is a strange business, combining a big sticker price (which few people actually pay) with big discounts in the form of institutional grants (which most people should know enough to negotiate).

College pricing is even stranger than the car business. Automobile dealerships aren’t likely to give one customer a sales discount of 50 percent and another customer a discount of 10 percent off the sticker price.  Not so for colleges and universities, where the tuition discounts can differ by tens of thousands of dollars between one student and the next.

Institutions do in fact discriminate on pricing depending on two primary factors that (in theory) determine an “optimal” return to institutional wealth.  Relatively wealthy students who scores off the charts on their SAT’s – thus enhancing the institution’s reputation  if enrolled– will get a tuition break on the basis of “merit.” But this student’s discount for merit is counterbalanced by his or her lack of financial need.  By contrast, high-need students must shine brightly to get admitted, and the university is likely to offer a deep discount to enroll them.

Continue reading Odd Tuition System: Big Sticker Price, Big Discounts

Why College Still Matters

A growing chorus of critics says a college education is finished as the ticket to economic success and a middle-class life.

The economy of the future, these critics suggest, actually requires far fewer college-educated citizens, because the U.S. economy is generating tens of thousands of jobs that require little or no higher education. 

In essence, the critics of American higher education policy are challenging the long-standing belief that all U.S. citizens should have a decent chance to pursue a college degree, regardless of what kind of neighborhood they grow up in, what kind of schools are available to them, or whether their parents have university degrees.

Continue reading Why College Still Matters