Policy Makers Must Recognize Higher Education’s 2-Tiered System
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college applicants receive rejection letters from the country’s most-elite higher-education institutions. The coverage
has focused on the effort and expense that students and their
parents put forth, only to be turned away.
While many private colleges and universities have always been highly selective, what has
changed is the degree of selectivity—at the Ivy Leagues
and their ilk as well as at lesser-known institutions. Last
year Princeton University rejected more than 90 percent
of its applicants, and Stanford rejected 89.7 percent. Harvard turned down 1,100 students who scored 800 on the
math portion of the SAT, while Yale reported rejecting
several students who scored a perfect 2400 overall. Even
Pitzer College got into the act, accepting only 26 percent
of its applicants.
Yet there is a striking dissonance between how educational value is viewed by the news media and many
students and their families, and how it is viewed by
the head of the U.S. Education Department, Secretary Margaret Spellings, and the commission she appointed in 2006 to review the state of
American higher education. The Spellings Commission calls for greater accountability, efficiency, and cost controls at our nation’s colleges—
a demand that seems out of step with the very features that make elite
colleges and universities so attractive to prospective students and their
families. Although the commission concluded that our higher-education system “needs to improve in dramatic ways,” it did not differentiate between elite and nonelite institutions, which brings the credibility
of its recommendations into question.
The fact is that elite colleges and universities in the United States, al-
though perceived by would-be matriculants and their parents as highly ef-
fective, are relatively inefficient organizations—at least according to the
Spellings Commission’s measure of choice: cost per student. The commis-
sion’s final report last year called on higher-education institutions to be-
come “more transparent about cost, price, and student
success outcomes” and argued that traditional input
measures like SAT scores and selectivity indicators
were “no longer adequate” for ensuring accountability.
But consider the information you’re likely to find in
the viewbooks or on the Web sites of our most selec-
tive institutions: low student-faculty ratios; images and
descriptions of recently renovated residence halls with
costly, high-tech additions; and accounts of faculty
members who, as a result of low teaching loads, have
the time to work closely with undergraduates. Prospec-
tive students and their parents are not given detailed in-
formation on student learning or institutional spending;
DOUGLAS PAULIN they are instead wowed with qualitative and quantita-
tive information describing the accomplishments of fac-
ulty members and the quality of the student-life experience.
As headlines suggest, that strategy appears to work: More students than
ever want to attend those dazzling-sounding institutions, and employers continue to hire their graduates. What’s more—the Spellings Commission’s recommendations notwithstanding—it does not seem that those colleges and
universities are interested in holding down their costs. Quite the opposite, in
fact: They are spending more and touting their spending as a selling point.
Elite institutions have the largest endowments per student in the country (
although their tuition prices seem disconnected to this reality). Harvard, which
A Prestigious Degree Doesn’t Always Equal Success
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OcZ d[ i]Z biggest fallacies about academic institu-
tions is that attendance at a big-name college or uni-
versity is virtually essential for reaching the top later
in life. In fact students will not necessarily get better
educations at more-prestigious institutions with high-
er-paid faculty—especially since a college’s academ-
ic prestige depends primarily on its professors’ research and publica-
tions. Various studies have shown students at small liberal-arts colleges
doing as well as, and sometimes better than, students from prestigious
research universities on tests like those for medical schools and a high-
er percentage going on to receive Ph.D.’s. That is not surprising in view
of a study indicating that teaching takes up less than half the working
time of faculty at research universities yet nearly
Ex Libris two-thirds of it at liberal-arts colleges. Small colleges dominate the list of the 10 in-
stitutions with the highest percentage of students
going on to receive Ph.D.’s; a higher percentage of Grinnell College
graduates, for example, receive their doctorates than those from Harvard or Yale. Of the CEO’s of the 50 largest American corporations
surveyed in 2006, only four had Ivy League degrees, and just over half
graduated from state colleges, city colleges, or community colleges.
How much college adds to economic or other success is not
easy to determine, and the methods often used can overstate the
effect—especially that of the more-prestigious colleges. Such
methods would be valid if the people attending those institutions
came from comparable backgrounds, so that their differences in
incomes after graduation could be attributed to what happened in
college. But if affluent people tend to send their children to prestigious institutions, then the incomes of those students in later life
may reflect greater career opportunities as a result of family connections, or higher income from the earnings of inherited assets,
rather than what they may have learned at college.
The students themselves cannot be assumed to be comparable.
If students who enter Harvard, for example, have higher qualifications than the students who enter Podunk State, then differences between graduates of the two institutions cannot be arbitrarily attributed to educational differences. If Harvard graduates are more likely to go on to medical school, law school, or
other postgraduate study, then their later incomes are likely to
be raised still further above those of the Podunk State graduates.
Ideally, the comparison should be made between people who
went to Harvard and those who were admitted to Harvard but
chose instead to go to Podunk State. Unfortunately, that is likely
to produce samples too small for statistical analysis, and the students who make such choices may not be typical of the ones at
either institution.
Studies have been made of people with comparable test scores
who attended prestigious and nonprestigious colleges to try to
determine the “value added” by the institutions. Some studies
indicate that prestigious institutions add value, while other studies say they do not. But they seldom indicate that the value added is as great as the raw statistics might suggest without making
allowances for the differences among the students.
Similar problems arise when trying to determine the value of going to college at all, as compared to going to work after finishing
high school—or not finishing high school. It is common to compare
the incomes of college graduates with those of high-school graduates and dropouts, and then attribute the higher incomes of the
college graduates to the education received in college. But people
whose education stops before college cannot be assumed to have the
same orientation, values, priorities, or ability as people who go on
to college. Income differences cannot be automatically attributed to
what was taught in college. A further complication is that many—if
not most—people who drop out of high school later resume some
form of education, whether at academic institutions or by studying
a trade or acquiring certification from courses given by Microsoft,
Oracle, Adobe, or other companies.
Is the income of dropouts who later resumed their education
elsewhere to be counted in the statistics on the incomes of dropouts? Are the incomes of dropouts who go on to earn a Ph.D.
without ever getting a high-school diploma to be included in the
statistics on the incomes of dropouts? Or is the term “dropout” to
be reserved solely for those who never resume any further education? Given the difficulty and costs of following individuals over
time, it is unlikely that the incomes of people who dropped out of
high school and later received an academic degree without bothering to go back and get a high-school diploma are counted in statistics on the incomes of high-school dropouts.
Thomas Sowell is a scholar in residence at Stanford University’s Hoover
Institution. From Economic Facts and Fallacies, being published this
month by Basic Books. Copyright © 2008 by Thomas Sowell.
