The Early Decision Uptick: Colleges gain; Low-income students lose

By Bob Massa and Bill Conley

This past fall, we wrote about how Early Decision (ED) programs would play an increasingly important role in helping colleges meet their fall enrollment goals.  With the financial fallout of the pandemic making enrollment levels more difficult to achieve, we suggested that getting a larger group of enthusiastic students to commit early could pave the way to realizing institutional headcount and net revenue goals.

What we didn’t predict in our article was the dramatic increase in ED demand at the most selective schools and the flat or decreased ED volume at the next rungs below.  Combined with the disproportionate impact that COVID-19 has on low-income students and their attendance rates, this trend could make it more difficult for low and low-middle income students to find their way to college.

Early Decision applications were way up at institutions such as Cornell (37%), UVA (36%), Dartmouth (29%), Hamilton (23%), Tufts (17%), BU (12%) and Johns Hopkins (11%).  This made it easier to increase ED enrollments as a percentage of the class while retaining a relatively low admission rate.

At schools that are not as highly selective as those in the sample cited above, our quick poll of a half dozen institutions showed no or just very modest increases and decreases in ED numbers.  So while we still believe that a move to increase ED enrollments is smart and strategic for most colleges, we are concerned that an ultra-competitive regular decision round could squeeze out under-represented students unless purposeful efforts are made to recruit and admit these students.

The Chronicle of Higher Education recently reviewed the latest data from the National Student Clearinghouse demonstrating that fewer low-income high school graduates went directly on to college in 2020.  While the enrollment in college  of high school graduates was down 27.1% this year, lower income students were over-represented in this decline: 29.2% fewer low income and 32.6% fewer students from high poverty families went directly on to college this past fall.  Without targeted programs to address this decline, and with early programs siphoning off spaces before the regular admission round (for reasons that we understand during the pandemic and resulting financial crisis), the numbers of low-income students served by our institutions will continue to decline.

As reported in Inside Higher Ed, the Western Instate Commission for Higher Education (WICHE) released projections in December that were slightly better than earlier projections because of a reported increase in high school graduate rates.  While they still project a decline of high school graduates of slightly more than 10% (41,000) from 2025 to 2037, there will be 162,000 more Hispanic high school graduates in 2026 than in 2019. By 2036, that number moderates down to 73,000 more than in 2019 – still a large growth given the 10% overall decline in high school graduates.  Critical to know when connecting demographics to the cost of college, the average family incomes for Hispanics tend to be about half the incomes of whites and Asians.  And while the percentage of Asian high school graduates is expected to increase from 6% in 2019 to 8% in 2036, the percentage of white high school grads will fall from 51% to 43% in the same time period.  Net tuition revenue will be challenged.

Although not all jobs require a college degree, multiple studies continue to show that the “education premium” for college graduates ranges from $800,000 to $1.2 million more than high school graduates would earn during their lifetimes.  And of course, this additional income not only benefits individuals and their families, but also adds revenue to the tax rolls.  It is therefore in our nation’s long-term interests to help qualified students afford a college education.

Many colleges are struggling financially during the pandemic because of fewer students and less revenue, combined with the increased costs of on-line instruction support and pandemic-related campus expenditures. Given this sobering backdrop, the challenge for colleges is to recruit, admit, fund, and graduate an increased number of students from low-income backgrounds.  Colleges also need to pay their bills, fill their seats and recoup their losses.  How can they afford to enroll a larger number of low-income students when there will be fewer “full pay” or “majority-pay” students in the pipeline?

There are no easy answers. However, the Center for Enrollment Research, Policy and Practice (CERPP) at the University of Southern California’s Rossier School of Education is exploring alternatives on a grant from the Joyce Foundation. Working with enrollment leaders at public and private four-year institutions in the Midwest, as well as federal policy experts, CERPP is looking at options for a federal/institutional partnership that would measurably increase the number and percent of low- and low-middle income students who enter and complete higher education.  In exchange for meeting certain enrollment and retention/graduation benchmarks and under the condition of providing new matching funds, institutions would receive a block grant to provide additional financial assistance to low-income students, reducing or eliminating the “gap” between demonstrated financial need and aid awarded.  Funding would also be targeted to supplement institutional efforts to help students succeed academically.  With a new administration in Washington and lots of chatter about “free college,” it is a good time to consider how to best leverage federal funds to assure that low and low-middle income students are not left out as they represent an increasing percentage of high school graduates.  It is in our economic interest as a nation to do so.

The CERPP effort is a heavy lift.  The American Talent Initiative (ATI), launched in December 2016, invited public and private institutions (327 in all) that graduate at least 70% of their students within six years to formally join ATI in an effort to increase by 50,000 the number of lower-income students enrolled in these colleges by 2025. To date, 128 colleges and universities are ATI members. Although member institutions do not receive financial support from ATI, they do benefit from ATI’s national campaign in support of increased access, setting aspirational enrollment goals, and accessing best practices, research and knowledge.  As reported in February 2020, the eligible institutions had been on pace to reach the 2025 goal but progress had leveled off: “The recent data indicating that progress from the first two years of ATI has not been replicated in year three raises the urgency of ATI’s mission and the need to overcome the challenges that may stand in the way.”

Binding Early Decision programs will continue to grow as colleges seek to meet their enrollment and net revenue goals.  Since NACAC was forced by the Department of Justice to remove from its Code of Ethics any prohibition of Early Decision incentives, colleges are now promoting ED through all sorts of special incentives. One institution in New England advertised that admitted ED students would be eligible to take four on-line classes for free during the spring and summer semesters– getting a jump start on their degree.  We will likely see more of this in the coming years.  But increasing ED to efficiently meet enrollment goals will make regular decision much more selective with fewer places in the class available. And again, per Newton’s third law of motion that for every action there is an equal or opposite reaction, the flip side of this trend is that low-income students, lacking access to sophisticated college counseling and historically under-represented in early applicant pools, will have a more difficult time gaining admission and sufficient financial aid in the regular pool.

Enrollment leaders and college presidents must step up to the challenge, finding ways to attract and support lower income students who will comprise a larger portion of our high school graduates.  Our economy and our national workforce needs requires our visionary leadership.

College Tuition Policy in a Pandemic: to cut or not to cut…

A version of this opinion piece was published on Tuesday, May 19, 2020 in “Inside Higher Ed”

Read or watch the plethora of COVID-19 stories coming at us each day and you are bound to notice an increase in the reporting of college students and their families calling for a lowering of tuition as online instruction replaces face-to-face in this era of “social distancing.”  And some colleges are beginning to respond.

Southern New Hampshire University, undoubtedly because of profits made from its massive on-line offerings, is offering free tuition to traditional freshmen next year. Other institutions are talking  about reductions in the 10 percent to 15 percent range.  On the surface, and certainly to the uninitiated, that may seem to make sense. Students say, “This is not what I signed up for,” and “The college experience is so much more than sitting in front of a computer.”

And they are right. Of course, a traditional four-year college experience is more than curricular instruction. And it is instruction and academic support, not the total “college experience,” that is covered primarily by tuition.

Clearly, increases in tuition have significantly outpaced growth in family income over the past fifteen years. Although average grant aidhas increased about 75% during that same period, many families still struggle with college costs. This is an important issue to resolve, but it is not what the current conversation is about. Families are now demanding a lower tuition specifically for on-line vs. in person instruction.

I realize that taking a position against a tuition reduction for temporary online instruction will not be a popular one, especially among parents and students and also among some of my enrollment colleagues and college presidents. I totally understand their concerns, the market pressures to lower tuition in this environment, and the financial challenges that many families face due to the pandemic. Those families include, by the way, faculty and staff members at colleges and universities who are furloughed or laid off because institutional revenue falls way short of the cost to operate the institution, a position that would be exacerbated by a tuition decrease for all.

Historically, families who cannot afford the price of college have been awarded need-based financial aid to make up most of the difference. What I advocate is not a “business as usual with no financial relief” approach but rather one that is more equitable. Instead of reducing tuition for all when the cost of educating a student has not decreased, colleges and universities should be prepared to help individual students and their families who have suffered financially due to COVID-19.

Looked at another way, and from experience at aninstitution that lowered its tuition several years ago, unless there is additional family financial need, financial aid typically decreases when price decreases. In other words, a lower price at the same family contribution means a lower need and hence less aid, leaving the net price paid the same as it would have been under a higher tuition. Therefore, those who stand to benefit the most from a tuition reduction are not families in dire financial straits, but rather families who have not taken a significant financial hit during the pandemic and who can still afford the original price charged. Whether they are willing to pay that price is, of course, a different story. They may “vote with their feet,” so the lowering of tuition then becomes an offensive strategy to keep that from happening.

Of course, a herd mentality is likely to result in a number of institutions lowering their tuition simply to be competitive in the marketplace rather than because it’s the right thing to do. These are, however, extraordinary times, and we can certainly understand why college leaders might move in this direction.

With that as background here are five reasons, regardless of market pressures, why lowering tuition in the wake of COVID-19 is not a good idea and what I would say to those students and families who are demanding it.

 Fixed costs. Let’s get the most debatable reason out of the way first. Colleges have fixed costs related to instruction. They have faculty members who do the teaching, counselors who do the advising, tutors who help students, and other academic support expenses. Such expenses do not go away just because instruction has moved online. Those real costs to colleges are covered by tuition. Costs do not decline when instruction shifts online. The price charged, then, cannot be reduced either.

Students may argue that online instruction should cost colleges less, that teaching from home is less expensive than ramping up campus facilities and labs. To be sure, colleges don’t have to pay for certain expenses when campuses are vacant, especially with respect to energy and daily maintenance. But other new costs are likely to eat up those potential facility savings quickly.

Online Instruction isn’t just Zoom. Colleges and universities moved with deliberate speed this spring to put all of their classes online. Some institutions with a history of online teaching were better prepared than others, but they all incurred additional expenses. And to be effective, online instruction involves more than listening to a live lecture on Zoom or a recorded lecture over a PowerPoint.  It requires investing in course-management software that allows an instructor to assign work and provide, in some cases, automatic feedback. The software tracks student progress and allows for sharing of observations on student discussion boards.  Through it, assignments are submitted and graded, and everything is neatly organized for the student in manageable chunks. And it is not free.

Admittedly, in the rush to get professors ready to teach remotely this spring, many colleges were not prepared to transition to a total online experience. But if they begin their fall semesters remotely, they will have to devote the summer months to getting online right. And that will require further investments.

Institutions will need instructional technology staff to make sure that each course is fully supported by a course management system. Staff members will need to be available to help professors when glitches occur in delivery.  Each professor, along with the department chair, will have to determine the ratio of live to recorded classes, and IT staff will need to be present to assure that the integration occurs without a hitch. These are additional instructional costs that would not be incurred with on-campus instruction.

Done right, the quality of instruction online is not inferior. Last year, I taught a graduate class online. I will do so again this summer. The class consisted of 13 pre-recorded lectures, a significant amount of reading each week, a weekly assignment, a required posting on a discussion board and three hours of live instruction/class discussion each week followed by a final project.  For part of each live class, students were divided into discussion groups, facilitated by virtual breakout rooms.  Students were coming to the class from all over the country.  They got to know each other well and often chatted between class sessions.

If I were teaching in person, there would be no pre-recorded lecture.  Instead, half of each in-person class would be taken up by the lecture, and there would be less time for discussion and small group problem-solving. There would be no required “discussion board” where students talk about the issues they are having with the weekly assignment or an important point they wanted to contest or emphasize from the reading.  In fact, at least for my class, (which was small and at the graduate level) I would say that students learned more because it was online.

Finally, the amount of work for faculty to teach online is at least as much if not greater than in-person instruction. Getting the total course built in the online platform in advance so students can progress at their own pace, providing weekly grading and feedback to make sure students are keeping up with the assignments and are mastering the material, and being available on email and phone to answer questions — all of that requires faculty time, pre-planning and consistent execution.  Students are, in fact, getting what they are paying for.

 Tuition generally doesn’t cover out-of-class experiences. The benefits of college that are so valuable to student growth and development and that extend beyond what is learned in the classroom are generally not covered by tuition.Student activity fees, athletic fees, and room and meal-plan charges pay for the bulk of the non-instructional experiences on campuses.

The student newspaper, radio station and ultimate frisbee club are paid for through student activity fees. Programming in the residence halls are covered through room fees. Taco Tuesday and the events in the dining hall around theme nights are often paid for through board charges.  They all have little to do with the direct cost of instruction and academic support that tuition dollars cover. So when students and their families complain that they shouldn’t have to pay a certain level of tuition when such activities aren’t available to them, we should explain that tuition doesn’t pay for them anyway.

And let’s not forget about scholarships and financial aid. Last, but certainly not least, national data showthat 85 percent of undergraduates at four-year public and nonprofit private colleges and universities receive financial aid and/or “merit” scholarships.  If we exclude the 20 percent of American colleges and universitiesthat admit fewer than half of their applicants (because they are in demand, they offer fewer discounts), the percentage is likely higher.  So basically, when students and families assert that they should not be paying full tuition for online instruction, we should note that very few families pay the full price for in-person instruction to begin with. They are already getting a price break.

While a good portion of this financial assistance is awarded to lure otherwise financially capable families to choose one institution over another, much of it is still based on the legitimate financial needs of families. Rather than lowering tuition when their instructional costs have not declined, colleges and universities that are already losing significant revenue from student fees, room rent and board charges should work with families individually to help those who have suffered financially in this crisis. They should do this equitably on a case-by-case basis, using a combination of their own resources, funds from the federal stimulus package earmarked for student assistance, and various extended payment options to help families in need.

A Final Word

During this pandemic, lives have been taken and jobs have been lost, creating undue stress and hardships for most Americans and indeed for people throughout the world.  Colleges are not exempt from these hardships, nor are the students they serve.

Students, particularly juniors and seniors who have invested two or three years of their lives studying and living on-campus, need to understand that the very existence of their college may be at stake as the economic fallout from the pandemic becomes apparent. Meanwhile, colleges must do all they can to help every student through this difficult time so that they can complete their education, earn their degree and launch their lives.  Ultimately, that is what students and families want, and that is what their tuition dollars make possible.

Robert J. Massa is vice president emeritus for enrollment at Dickinson College and served as the chief enrollment officer at Johns Hopkins and Drew universities. He is presently an adjunct professor at the University of Southern California and Executive Director of the Hudson Global Alliance.

COVID-19 and college admissions

COVID-19 has wreaked havoc on people’s lives,  our health care system, our social interactions  and our financial institutions.  While college admissions is hardly the major concern of this global crisis, the pandemic will impact every aspect of the admissions process and how students make their final decisions. This includes:

• How a college recruits students at the end of the admissions cycle and stays connected to those who agree to enroll throughout the summer.
• How colleges project their class size and the revenue they need to operate
• Where the student will enroll
• How much a student will pay for college

How colleges recruit and engage prospective students

Admission officers know that a major factor in a student’s admission decision is the experience they have visiting the campus. Although large numbers of students visit campuses prior to an admission decision, many students postpone their visit until they have been admitted.  To accommodate this, colleges are now hosting virtual visits complete with live tour guides and interactive Q and A sessions. A number have also built upon existing social network platforms to encourage engagement.

“While I do not know any enrollment manager who would prefer to yield the first year class purely through virtual programming, I am also excited to see what we learn from the current situation,”  Greg MacDonald, Vice President for Enrollment at Lafayette College told me.  “The number of faculty members, staff, students and alumni who have stepped forward in recent weeks to assist in our virtual offerings has been remarkable.”

And Kent Barnds, Executive Vice President at Augustana College, shared his insight via email on current conversations with students and parents in this stressful time.  “Our job right now is to show empathy and to constantly remind admitted students why we are a great choice,” he said.  “I think admissions staff members who take the approach of honest broker and empathetic counselor are likely to be rewarded this year.”

Where an institution sits in the minds of students and parents will determine how much of a disadvantage the lack of a physical visit may cause. To give students more time to visit and consider other factors, a number of colleges have pushed back their deposit deadline to June 1. For the most part, these institutions historically have not filled their class by May 1, so the extension really causes them no harm and does in fact help students. The more selective institutions are holding to the May 1 candidates reply date so they can stay on schedule to assess budgetary needs for the next academic year.

Whatever the deposit deadline, it is likely that all colleges and universities will see a larger attrition over the summer. The  Art and Science Group conducted a national student survey in March on the impact of COVID-19 on college-bound seniors.  They found that while 20 percent of students were confident in their ability to attend their first choice college, 17 percent believed they would not attend college full time, if at all, in the fall.  That could have a significant impact on the financial condition of many institutions.

Projections are now guesses

Like many of my colleagues, Stefanie Niles, Vice President for Enrollment at Ohio Wesleyan University, is concerned.   “Enrollment officers typically rely on data to make informed decisions and predict outcomes,” she reflected in an email, “but there is no data that can help us understand the true impact of COVID-19, particularly as the situation remains extremely fluid.”

And she’s right.  A recently released survey of college leaders by the consulting firm EAB reports that 75 percent are concerned/very concerned about their ability to meet the numerical goals they set for Fall 2020 enrollment and tuition revenue.  That’s  a sobering number.

To get a better handle on this, Greg MacDonald from Lafayette told me he is looking at yield this year in two additional buckets – the “drivers,” or those close enough to the college to arrive by car, and the “flyers.”  The former, he believes, is likely to yield at a higher rate than the latter.

Will students be willing to travel long distances to attend a residential institution? Although the impact will vary based on the market position of an institution, the Art & Science study  revealed that a college closer to home would be a more viable choice than a first choice institution for 35 percent of students.

Institutions that depend on international students to fill the gap of a smaller domestic pool will also be challenged.  The recent survey of college leaders by EAB, revealed that yield projections were being adjusted by 28 percent of the enrollment leaders because of concerns about international enrollments, while 12 percent were admitting more internationalsto “mitigate melt risk.”

“Many of us believe that very few, if any, of our admitted international students will successfully navigate the VISA process to arrive in time for the fall semester and we may be teaching these students online or deferring them to the winter semester,” wrote Mark Hatch,  Vice President for Enrollment at Colorado College. “Others believe students will stay close to home and won’t travel across state lines,” he said.

This is why many selective colleges are likely to increase the numbers of students they admit or put on the waitlist. And as colleges successfully recruit more students into the summer, whether from their waitlists or from students who have committed elsewhere, their actions will impact the enrollment numbers of other colleges further down the “food chain.”

Show me the money

If the number of students electing to defer enrollment increases, and if more students stay close to home, competition to enroll those who remain in the national pool will be intense.  Colleges now have a new timeline in their quest for filling their classes.  Last September, the National Association of College Admissions Counseling (NACAC) voted to yield to a Department of Justice (DOJ) Restraint of Trade allegation, thereby allowing colleges to recruit students who had already committed to attend another institution by awarding them larger scholarships, a practice that had long been forbidden by the association’s code of ethics.

Now with the pandemic, as many as a fifth of domestic students think they may have to abandon their first choice college to attend a school that is more affordable, according to the recent Art & Science Group survey.  In addition, some international students will be unable and/or unwilling to come to the U.S.  The battle lines will be drawn for those students and others.  Students admitted to institutions below the very top group will see offers of larger scholarships and tuition discounts, resulting in a new type of bidding war that now can occur before and after the May 1 reply deadline. 

Bill Conley, Vice President for Enrollment at Bucknell University, looks at this affordability issue as the difference between choice and behavior.  The latter, he says, is a learned response.  “Families have learned that colleges are very expensive and see less distinction among them. The COVID-19 impact will further hard-wire behavioral tendencies towards a commodity model:  getting a college education at the lowest price.”

We can also expect requests for additional need-based financial aid to increase if the initial unemployment rates caused by social distancing guidelines continue. The financial aid system estimates parents’ ability to pay on income that was earned two years ago.  Today, income earned in the first quarter of 2020 may not predict a family’s 2020 income.   Although colleges are likely to award larger scholarships to meet their enrollment goals, they are less likely to meet their revenue goals if they do so.  This will have significant financial consequences in the coming years, as financial aid is typically a four-year commitment.

Looking ahead

 The recruitment cycle for fall 2021 has already begun. There will certainly be changes for current high school juniors. Kelly Walter, Associate Vice President and Dean of Admissions at Boston University, expects the shifting landscape to have a “significant and profound impact” on the college search process going forward.  “Given the extensive disruption to standardized test administrations, the suspension of on-campus visitation programs, and the unprecedented circumstances of today’s environment, the college search for juniors will be quite different than that of proceeding classes,” she claims.

But for now, it appears likely that the class entering in the Fall will have fewer students from abroad and will be more regional. The most selective, strongest universities, should see little impact. Small, selective private colleges with little market recognition outside of their region will likely feel the brunt of these forces and some regional public colleges and the community colleges will see their enrollments grow as students stay closer to home.

The impact of COVID-19 on colleges and students will be significant, and will become clearer as spring and summer fade into fall.

 

Public Universities and Wealthy Out-of-State Students

This article was originally published in “The Conversation” on March 11, 2020 https://theconversation.com/why-public-universities-are-chasing-rich-kids-from-out-of-state-133303

 

There are many high-achieving, low-income students who are well qualified for admission to the nation’s top public colleges and universities. The problem is admission officers appear to spend little time trying to find them.

That much has been made clear by ongoing research into where universities go to recruit students.

The research – by higher education scholar Ozan Jaquette and data scientist Crystal Han, both of UCLA – shows that admission officers at public universities are going after wealthy studentsfrom other states who will pay higher tuition. This strategy, in turn, helps those universities make up for a precipitous decline in state revenue that took place during the last 20 years.

Jaquette and Han also cite evidence that simply providing additional information on admission and financial aid doesn’t really lead low- and middle-income students to attend a highly selective college or university.

Their study examined where admissions officers at 15 major public research universities traveled to recruit students. They found that the average family income was US$40,000 higher at the high schools they visited than at the ones they skipped in the same state or region. That bias toward affluent communities indicates a “systematic socioeconomic and/or racial bias in the enrollment priorities of many public research universities,” Jaquette and Han concluded.

Also, the authors found that admissions staff more often visited out-of-state schools with a majority of whites and Asians than schools with large percentages of blacks and Hispanics. In one example, blacks and Hispanics made up 27% of the enrollment of out-of-state schools visited by admission staff. Yet, blacks and Hispanics made up 43% of the enrollment at out-of-state schools admissions staff did not visit.

While the UCLA study focused on public research universities, the leaders of private colleges face this same challenge nearly every day. I know this because as a former enrollment manager at a private university, my job constantly demanded that I meet similar challenges and contradictory goals.

Striking the right balance

My colleagues and I were always trying to increase the academic quality of admitted students. At the same time, we strove to diversify the student body and maximize net revenue. It is really difficult to meet all three of these goals.

Boosting a school’s student diversity usually means admitting more students from lower-income families. Logically, this requires more financial aid.

Also, because high schools in lower-income areas tend not to offer as many challenging courses as schools in wealthier communities, these students will typically have lower test scores. At least on paper, this makes the academic strengths of incoming students look weaker.

I know a colleague who had been asked to recruit talented lower-income kids without offering more financial aid than last year. He calls being tasked with these contradictory goals an “unfunded mandate” – when an authority asks you to get something done because it is the right thing to do, without giving you the resources you need to do it.

Access versus the bottom line

Why, when university presidents stress diversity and the critical role universities play as pathways to upward social mobility, do admission officers turn around and visit out-of-state schools where families are more well-off than at the schools they don’t visit? Is this purposeful discrimination? Is it some conspiracy to shut out students whose families don’t have enough money to pay most or all of the out-of-state tuition?

No. The plain fact is that universities need money to operate. When state funding declines, increasing tuition revenue is the most common remedy.

The UCLA study cites data showing that the average state appropriation to public higher education dropped from $387 million in 2001-02 to $280 million in 2012-13, and only went back up to $314 million by 2016-17.

During the same period, the money raised through tuition at those institutions increased from $213 million to $501 million. Much of this growth can be explained by the increase in the average out-of-state enrollment during those years – from 19% of the entering class to 26%. Further, for every 10% decline in state funding, there was an average increase of 4.6% in out-of-state freshmen.

Separately, a book by economist Nathan Grawe, “Demographics and the Demand for Higher Education,” shows a precipitous overall decline in the number of high school graduates from 2025 through 2032.

At the same time, college-aged Americans will become more diverse. The number of white high school graduates is projected to decline by 265,000 while the number of Hispanic and Asian high school graduates is expected to increase by 15% in just about every state. However, the number of black graduates will fall by 8% nationwide.

With black and Hispanic families having incomes that are almost 50% lower than white and Asian households, colleges and universities will find it increasingly tough to meet their revenue goals by finding enough students who can pay all or most of their tuition.

Without new government funding to provide increased access to low-income students, realigned funding priorities at colleges and universities themselves, and a massive campaign to discover talented students from low- and low-middle income families, I believe public universities are likely to continue to aggressively recruit wealthier students in nearby states.

Aside from intense lobbying for more state support, public universities (and private institutions for that matter) can change practices to become more accessible to students from families of lesser means.

For example, U.S. public universities tripled the amount of money that they devoted to scholarships for students whose families could afford to pay the price of tuition without a discount between 2001 and 2017. If colleges and universities would transfer some of that money to need-based aid, and recruit in low-income areas to find promising students, it could make a big difference.

From my experience, colleges will say they need so-called “merit aid” to compete for high-achieving, affluent students. That may well be. But unless colleges change their ways, they will find that increased competition for students who can pay will result in higher discounts for them. This will lead to declining support for students who can’t otherwise afford to attend, taking a toll on diversity.

Certainly for societal reasons, but equally as important, to fuel our economy with educated workers, colleges and universities must shift priorities and make more aid available to admit low- and middle-income students. Meanwhile, state and federal resources must be realigned to invest in this country’s future. This means educating anyone with the talent and the drive to succeed, regardless of their socioeconomic background.

Here’s why colleges are being forced to close their doors – and what they can do to stay open

NOTE:  a version of this article was published in “The Conversation” on November 7, 2019

 

When Cincinnati Christian University became aware of its declining enrollment and dwindling tuition revenue in 2015, the university made a “series of bold bets” to stay afloat.

But the bold moves ended up being a series of strategic mistakes. The school started a football team, revised its mission and laid off faculty and staff to cut costs. It spent most of its $4 million endowment but was still $6 million in debtin 2018. This fall semester will be the school’s last.

Cincinnati Christian College is one of a growing number of colleges and universities – 21 private colleges since 2016  – forced to close their doors for financial reasons. The trend has affected the public sector as well. At least 33 public colleges– including community colleges – have consolidated within their state systems or have merged with other institutions since 2016.

And predictions of the future demise of other colleges abound. Harvard Business School professor Clayton Christensenhas said that half of all colleges and universities will close in the next decade. While that view may be overly pessimistic, one studyfound that about 800 of the approximately 2300four-year, public and non-profit private colleges in the nation exhibited characteristics that put them at financial risk: they have fewer than 1,000 students; no on-line programs; annual tuition increases of at least 8%; and relied on tuition for 85 percent or more of their revenue. They also discounted their tuition by 35 percent or more.

These college closures disrupt the academic lives of students, force faculty and staff to find work elsewhere, and can hurt a local economy.

As an education professorwho has served as the chief enrollment officer at several universities for 30 years, here are four reasons I believe are behind the closures.

1. Rising prices and doubts about value

 Talk to any parent of a college-bound high school student and they will express concern about the cost of college. When I conducted research as a consultant for a small college, I found that price was by far the biggest factor in how both parents and students choose a college.

In that 2019 unpublished study, sticker price was the top consideration for 51 percent of parents when making a college choice. That’s three times the 17 percent who said academic reputation – as determined by college rankings published by various magazines – was a top factor.

We can expect to see more colleges face declining enrollment as prices continue to increase. The College Board reports that average tuition and fees tripled at public four-year colleges and more than doubled at non-profit private colleges from academic year 1989 to 2019 – after accounting for inflation.

As college prices continue to rise, more people are questioning whether college is worth the price.

According to a 2019 survey of 1389 Americans, 69 percent had favorable views of four-year colleges, but they also wanted colleges to help students acquire the skills needed to get a good paying job. Just 58% think colleges are doing a “good” or “very good” job at providing students a return on their investment.

When the value of college is questioned, the first schools that experience enrollment declines are those that aren’t very well known, aren’t very selective, rely heavily on tuition and offer large discounts to attract and keep students.

2. Demographic shifts

 Amid rising college costs, the income gap between rich and poor is also getting wider. From 1988-2018, the bottom 20% of Americans, in terms of income, saw a 12 percent increase in their income while those in the top 20% enjoyed a 51% increase, according to The College Board.

This is particularly true for African American and Hispanic families. In his 2015 book, Breakpoint, Jon McGee notes that family incomes of African American and Hispanic families are half those of whites and Asians.

Nathan Grawe’s 2018 book, Demographics and the Demand for Higher Education, shows that while the number of high school graduates nationwide will actually increase slightly between now and 2025, that number will actually decrease by 15-20 percent in the Northeast, which is where many non-profit, private colleges are located. The increase occurs in the south and southwest primarily in the Hispanic population with lower average incomes. Grawe estimates that the share of Hispanics going to college will increase about 5 percentage points by 2029 while total student enrollment will decrease by almost 8 percent between 2025 and 2029.

So, while America’s colleges and universities are expected to enroll a more diverse student body in the coming years, they will also face financial strain as fewer students enroll and more families lack the means to pay tuition.

3. Colleges as competitors

 It used to be that colleges could share student information with one another to make sure they were able to offer a price that is in line with the needs of a student’s family.

All that changed in the early 1990s, when the Department of Justice initiated an anti-trust investigation against 57 private, non-profit colleges and universities for alleged price fixing. A consent decree stipulated that colleges were no longer permitted to share financial aid data of students who had applied to different institutions. That one action changed the competitive landscape forever, leading many colleges to offer more competitive “scholarships,” which in many cases are actually non-need based discounts.

The latest round of Justice Department investigations of college practices resulted in the National Association of College Admission Counselors (NACAC) voting to remove several ethical principles from their code, as the DOJ believed they constituted “restraint of trade.” Now colleges can (and no doubt will) continue to actively recruit an applicant who had withdrawn from their college’s admit pool  to accept another’s offer of admission by trying to beat the successful college’s scholarship offer.

We can therefore expect that the practice of competitive discounting will escalate even more than it has in recent years. Colleges will aggressively bid against each other for students by offering more generous scholarships. While some students will indeed benefit, this will create a major financial strain as institutions spend money that they don’t really have and forgo revenue they need.

4. Colleges move too slow

 Colleges and universities are not known for nimble behavior. Those institutions that move fast, such as Southern New Hampshire, Arizona State and Western Governors universities, benefit by getting new programs to market ahead of others.

But that’s not true for most. Brian Mitchell, a former president of Bucknell University and now a higher education consultant, claims that many college trustees are “woefully unprepared” to meet the challenges facing their institutions today. Most colleges address enrollment and revenue declines by simply increasing the discount rate to enroll more students. This, Mitchell says, demonstrated a fundamental “misunderstanding of the overall state of higher education” and makes it difficult to achieve meaningful change.

Take the College of New Rochelle in New York for example. Administrators there discovered “fabricated budgets” in 2016, at least three years after those budgets were closed. Subsequently, an internal audit uncovered $31.2 million in unpaid bills, including state and federal payroll taxes. The College did not close until 2019. The board of trustees were not aware of the debt nor was it listed in their annual audit. Delayed action and management errors effectively killed this once vibrant institution.

What it takes to survive

 In times of economic and demographic downturns, the smallest and weakest of colleges and universities will be challenged to survive. If, however, institutions are clear about their missions but willing to expand them, if they welcome change in who their students are, which programs they offer and how they deliver those programs, and if they anticipate the impact of negative headwinds while moving quickly and smartly, they should be able to navigate the choppy waters ahead of them and survive.

 

Another Round of Chaos in College Admissions

Perhaps we brought it on ourselves – colleges and universities that “charge too much” and “sell coveted spaces to the highest bidder.” At least that is the image the public has developed of higher education. But we certainly did not get to this without a lot of help from the federal government to create demand by providing a relatively small – but helpful – amount of financial aid funding (compared to what private colleges themselves provide for access); piling on regulations that accompany that funding; and then restricting collegial collaboration through the early 90s investigation that ended the sharing of financial aid data among overlap schools (they would call this “enhancing competition”).

In their latest “solution in search of a problem,” the Justice Department is picking on the National Association for College Admission Counseling and their Code of Ethics and Professional Practice that has, over the years, brought at least some order to a very stressful process for students and their parents.  Colleges that seek to be members in good standing of NACAC must agree to certain principles.  These have worked well for my entire career, helping students find the right college at the right price without, for the most part, sending parents and their children over the edge with angst. I just retired last spring after 45 years in and around college admissions, serving institutions AND students. The ethical guidance provided through the NACAC code helps colleges and students alike.  I have my experience to draw on for that assertion, but it appears that the Justice Department knows better.

If the Justice Department prevails, and it certainly looks like it will, NACAC would remove the following from its Code:

• “Colleges must not offer incentives exclusive to students applying or admitted under an early decision application plan. Examples of incentives include the promise of special housing, enhanced financial aid packages, and special scholarships for early decision admits. Colleges may, however, disclose how admission rates for early decision differ from those for other admission plans.”
• “College choices should be informed, well-considered, and free from coercion. Students require a reasonable amount of time to identify their college choices; complete applications for admission, financial aid, and scholarships; and decide which offer of admission to accept. Once students have committed themselves to a college, other colleges must respect that choice and cease recruiting them.”
• “Colleges will not knowingly recruit or offer enrollment incentives to students who are already enrolled, registered, have declared their intent, or submitted contractual deposits to other institutions. May 1 is the point at which commitments to enroll become final, and colleges must respect that. The recognized exceptions are when students are admitted from a wait list, students initiate inquiries themselves, or cooperation is sought by institutions that provide transfer programs.”
• “Colleges must not solicit transfer applications from a previous year’s applicant or prospect pool unless the students have themselves initiated a transfer inquiry or the college has verified prior to contacting the students that they are either enrolled at a college that allows transfer recruitment from other colleges or are not currently enrolled in a college.”

 

The Justice department claims that removing these alleged “restraint of trade” statements will lower the price for students.  Our experience with federal mandates suggests just the opposite.  Everyone talks about how the cost of education has increased significantly – tuition at private colleges increased 98.5% from 1990 to 2018 in 2018 dollars.  Of course, when the public and the pundits say “cost,” they really mean price charged to students.  The actual tuition price families pay went up “only” 17.9% thanks in large part to increasing institutional financial aid (College Board, Trends in College Pricing, 2019). But the actual COST for colleges to educate a student has also gone up significantly during this time and some of these costs are naturally passed on to students.

While increases in cost are certainly related to other rising prices such as technology, construction and competitive salaries,  increases are also due to direct government requirements — a proliferation of regulations which in many cases require additional staff in order to comply; the skyrocketing price of health care benefits; and the bidding wars between institutions that increased in earnest after the 1990 Justice Department investigation ended the practice of sharing need-based financial aid information among overlap schools.  This data sharing was originally initiated not to “screw” students, but to make sure that each institution had the same information about family financial strength in order to help students select the right college for them based on the best program — not on the “cheapest choice.”

Competition for students in higher education is unlike a private (non-service) business that, assuming demand, can increase volume to compensate for per capita revenue declines.  When competition increases for colleges and universities, prices increase.  Unlike car dealerships that might out-discount a competitor to gain a sale while still making as profit, colleges are not only discounting those who couldpay more in order to “win” the enrollment, they are also meeting the financial needs of those who cannot afford the full price. And in private colleges, the bulk of that need-based money comes from the institution itself.  Sales of goods in the private sector only give the equivalent of “merit” money.  Colleges also do that AND they fill the gap between price and ability to pay with institutional grant funds for needy students.

Another major difference is that the list price charged by most colleges and universities does not cover the cost, unlike private businesses where the cost of a product is inflated for profit.  When discounted, the profit, albeit smaller, is still earned.  Not so with colleges and universities.  The difference between list price and cost is covered by annual gifts, endowments and other sources of revenue – all of this BEFORE scholarships and need-based grants are applied to a student’s account.

The bottom line, especially for stand-alone undergraduate colleges with limited sources of revenue (no hospitals, big time athletics or major research grants) is that someone has to pay.  With the removal of these ethical code guidelines, colleges that are under-enrolled will be able to recruit students after May 1 (or at any time really – after early decision, for example), by simply saying “We’ll beat any offer.” Individual students may benefit from that in the short run, but in the long-run, with less per capita revenue and little opportunity to increase enrollment in this declining market, colleges will need to increase their list price in order to cover costs. Then, even when discounted, everyone will pay more.  Of course, another option is to decrease costs, but unless there is a lot of fat to trim (and there typically is not in small colleges), cutting expenses generally means impacting quality. So one may be paying less, but one will actually be getting less.

When students select a colleges based on the best price, an unintended consequence is often a mismatch – for example, the student is not challenged academically and decides to transfer.  This adds to the systemic cost of the admissions process and both student and institution lose.

My crystal ball is no better than that of anyone else who has been around for a while.  Even if the NACAC membership votes to strike these principles from the statement, many (if not most) colleges will still adhere to the ethics behind them, at least in the short term.  For example, it is certainly ok to recruit students after May 1 if they have not informed the recruiting institution of their plans, but if they have withdrawn their application and have decided on another choice, it is really not fair to the student or to the other institution to persist.

I believe we are likely to see a significant increase in the amount of the non-refundable enrollment deposit that must be submitted.  It might be easy to walk away from a $500 deposit, but not so easy to lose a $5,000 deposit.

I hope we do not see institutions requiring an early deposit before all admissions decisions and aid packages are known to students.  I believe our friends in the Justice Department would frown on this in combination with a large non-refundable deposit, because it would force students to make a decision before they knew all of their options.  That is why May 1 needs to stay as the common candidate reply date.  Or perhaps Justice did not think of this consequence?

The fact that it is ok for major league sports to be exempt from anti-trust laws but that non-profit higher education, in serving the public good, must adhere strictly to them is a conundrum that has baffled me for almost 20 years.

This is just the latest round of the new normal, I suppose.  I loved my career in higher education that spanned five decades, and if I had to do it over again, I would!  But I’d be less than honest if I didn’t say that retirement came at the right time for me. I’ll watch from the sidelines, rant a bit and shake my head, but I will continue to be grateful for the opportunity to have done the work we do every day that helps so many young people find their way in life.  THAT, and not all of this extraneous maneuvering for the sake of rattling the cage, is what education is all about!

When Character Calls

This piece was co-authored with David Holmes, Exec. Director of the Character Collaborative and was published in Inside Higher Ed last March.

 

Since the 2016 meeting of the National Association of College Admissions Counseling, a group of admission deans from more than a dozen selective colleges has been working to elevate the influence of ethical and performance-based character in the admissions process. Calling themselves the Character Collaborative, the deans were joined by high school admissions counselors, representatives of major associations like the College Board and ACT, and researchers at Harvard University and the University of Pennsylvania to work toward this objective.

Since its founding, the group has focused on recognizing and nurturing student character as essential to education and a civilized society.

The the fraud scheme in college admission that was revealed as a “scandal” last spring is a sobering development. Disheartening as that may be, however, it is the evitable by-product of a college admission system that can be manipulated by adults for multiple purposes and is vulnerable to unscrupulous conduct.

Operating under the false assumption that getting into an elite college will set up their children for life, parents work hard to position them for admission to one or more of the nation’s highly selective colleges. At the same time, colleges want successful athletic teams and need a substantial flow of donations, so parents and their agents can work together to exploit those angles.

In the current scandal, such motivations — acceptance to a prestigious college, good sports teams, an appetite for money — has created a situation in which parents, outside “fixers” and college athletic staff have taken advantage of a vulnerable system by cheating. The most disheartening aspect of the scandal is the absence of fundamental precepts of good character.

Fortunately, through the Character Collaborative, a growing number of higher education institutions are working to elevate character attributes in admission. Three factors drive this work. First, research shows that character attributes are the strongest predictor of success in school, work and life. Second, history shows that parents, students and secondary schools will respond to what colleges are looking for. Three, colleges want to keep faith with their founding principles, which include positive values, good character and citizenship.

In order to return good character to its rightful place in education, colleges are working on: 1) avenues for assessing character in valid, fair and culturally neutral ways and 2) models for integrating character considerations into admission decisions. These efforts hold promise for changing college admission in a profound way.

Members of the Collaborative — including Bucknell University, Carnegie Mellon University, the Massachusetts Institute of Technology, Swarthmore College, the University of Denver and the University of Rochester — are beginning to examine the potential use of various instruments to assess character attributes. Many campuses are using rating scales to assess the character of college applicants. At one institution, the admission team employs a research-based rubric of seven character attributes in reviewing candidate materials. The rubric defines each factor and indicates where in the candidate’s materials to look for evidence. Several colleges are revising formats for student essays and teacher recommendations by seeking concrete examples of attributes such as resilience, perseverance and compassion. Using institutional research, other colleges are looking for character-oriented attributes, such as persistence and teamwork, to predict academic success and match the culture of the school.

Along with ensuring the integrity of testing and of college athletics, we believe the elevation of character in admission will change the mind-set and actions of the various players in college admissions.

By insisting on integrity and ethical behavior in every part of the admission process, including in the criteria for admission, we can deter parents and others from attempting to manipulate the system to their selfish benefit. Additionally, we can motivate parents and colleges to model attributes of character that ensure that our youth will become people who make the world a better place.

A Tuition Gimmick?

“College Costs Continue to Edge Higher” (Wall Street Journal, October 24, 2017) reported on the release of the annual “Trends in College Pricing” study by the College Board. Not unexpectedly, the amount that private colleges charged for tuition in 2017-18 rose 1.3% (1.9% in public institutions) from the year before. But financial aid, which has historically tempered the effect of the rise in published prices, failed to keep pace with price increases so that the average net price families paid after grants and scholarships rose by 4.6% at private colleges and 3.2% for in-state public schools. More so than the published price, net price is what actually determines access and affordability, and this is what families (and institutions) need to focus on.

My institution, Drew University, the only national private liberal arts college in New Jersey, was cited in this short report as one of several schools to announce a tuition price decrease for the 2018-19 academic year. Rather than the published price increasing by the “normal” 3%, Drew is decreasing its price by 20%. Here’s exactly what was recounted in the Journal report, lifted with attribution from a Moody’s note to investors in September:

“Moody’s Investors Service warned in a note last month that recent cuts to published tuition rates by schools including Sweet Briar College in Virginia, Drew University in New Jersey and Birmingham-Southern College in Alabama may be little more than a gimmick, since few students at those schools pay sticker price to begin with.”

At Drew, staff from the finance, enrollment, communications and institutional research areas spent the better part of six months studying, modeling and testing options. We looked at data from a larger market position study conducted on our behalf, and we paid attention to a national study by the firm Ruffalo Noel Levitz that found half of all families exclude colleges from consideration based on published price alone. When combined with the fact that Drew, at 1560 undergraduates, is about 250 students shy of its optimal size and that only 75 of our students paid the full price charged, it became abundantly clear that our published price was too high for our prospective students and that lowering it could capture the attention of some who otherwise would write us off as too expensive.

“Gimmick?” Only if we positioned this as a $10,000 price reduction for all. But we didn’t. In her open letter on the Drew website, President MaryAnn Baenninger clearly stated:

“Effective for academic year 2018–19, Drew’s tuition will be lowered by 20%—about $10,000—narrowing the gap between the actual tuition charge and the amount many families pay. This move will make Drew’s true tuition, and our true value, more clear to more families.”

“Narrowing the gap between the actual tuition charge and the amount many families pay,” – after financial aid. When the published price was $48,336, the average Drew family paid just under $20,000 in tuition after scholarships and grants (room and board is an additional charge, and loans and outside grants help to defray that expense). With a tuition charge of $38,668, families will still pay just under $20,000 with scholarships and grants that are proportionately lower. Only now, two things are different – first, they will all be protected from the average 3% tuition increase next year (a savings of $1450); and second, more families will consider Drew as a college of choice since the published price and the price they actually pay will be closer – not the same, but closer. This will help us to attract more students who will benefit from a Drew education at a price that they can afford after aid, but who never would have looked at Drew before because the list price was just too high.

And one other very important point.  With a tuition reset at Drew, we’re not lowering how much it costs us to educate a student.  We are certainly finding efficiencies to lower some of our expenses, but if we significantly cut our cost, we would impact our quality. So, primarily, we’re not cutting costs, we’re cutting the price that we charge.

Far from a “gimmick,” this move will increase access because more students will consider Drew a financial possibility. A “gimmick,” Moody’s concluded, because so few students pay the published price. You don’t go on a diet if you are thin. You don’t take a statin if your cholesterol is normal. You don’t wear glasses if you can see quite clearly. And you don’t lower tuition unless very few students are paying it, and charging more makes it seem that you are out of reach for the average student. “Gimmick?” Its time to fetch my glasses so I can find my Lipitor and eat my salad!!

Cutting State Grants to Students at Private Colleges: A short sighted tactic

A February 19, 2017 opinion piece by Montclair State University Professor Brigid Callahan Harrison in nj.com posits that New Jersey could keep more students in state if only the legislature and Governor would reduce state grant support to students attending NJ independent colleges and universities and increase grants to students attending public colleges:

So as this structure works now, a needy student would receive $2,734 to study at Essex County Community College, but the very same student would receive $12,438 — nearly $10,000 a year more — to study at Drew University. This bizarre system — in which taxpayers subsidize private and religious colleges and universities and penalize students for making cost-saving decisions — could be reformed by allocating a set amount to an individual student based on need, and then allowing that student to use that allocation at the college of his or her choosing.

“Bizarre system?” Really? In light of New York State’s politically expedient, but caveat-ladened decision to make SUNY tuition “free” for those students from families earning less than $125,000 per year, it is appropriate to call out the same faulty logic used here by Professor Harrison – that making public education more affordable at the expense of private education will benefit students and taxpayers alike. It “just ain’t so,” and here’s why:

Montclair State charges about $20,000 in tuition for out-of-state students. Assuming there is no State subsidy at work for those students, the in-state tuition of about $12,000 means that the State is giving EVERY in-state student about $8,000 of support, regardless of need. TAG money received by needy students at NJ public colleges is in addition to this $8,000 state tuition subsidy for every student. Making private colleges less affordable by removing or lowering a grant that is indexed to the federal “Estimated Family Contribution” (EFC) will most likely result in an increased enrollment in NJ public colleges and decreased enrollment at private colleges – not a reduction in out-of-state student migration. Just as will happen in New York, New Jersey will then be forced to subsidize more students – all of whom would get the State tuition subsidy ($8,000) and many of whom would get an increased TAG on top of that. It is, therefore, less expensive for the State to provide grants to help low-income students afford a private in-state college than it is to subsidize an increased number of students in the public sector. That is why many states have need- or income-based grant programs to help residents attend private colleges: it is less expensive for the State to subsidize needy students at private colleges than at the state colleges.

Professor Harrison also misuses the term “need,” when she claims that the “system” could be fixed by “ allocating a set amount to an individual student based on need, and then allowing that student to use that allocation at the college of his or her choosing.” Need is defined as the Cost of Education MINUS the Expected Family Contribution (EFC). Since EFCs are not cost-dependent (that is, the EFC is the same for a family whether the child decides to go to Montclair State or to Drew), the ”need” –and hence the grant eligibility — would be lower at the public institution than it would be at the more expensive private institution. That is as it is now, even though technically TAG is income-based (from which the EFC is derived).

Finally—and words do matter here – Professor Harrison claims that current policies “penalize students for making cost-saving decisions.” Students attending public colleges and universities are making price-saving decisions for themselves – the price they are being charged is less than the price charged at private colleges. That decision actually costs New Jersey more than if they had decided to attend a private college in-state.

New Jersey is the greatest exporter of students not because of the financial aid benefits available or not available to the State’s college students, but because we are a populous state with significantly fewer institutions of higher education compared to neighboring New York and Pennsylvania. To suggest that shifting financial aid away from students who require less in state support to attend private colleges is short-sighted, misses a critical point in the funding of higher education, and is just plain wrong!

Colleges Should Abandon Early Admission?…… Really?

Every year without fail, a well-respected educator comes out against early admission programs, calling them “barriers to keep most low income students out.” This year’s quote is from a recent piece in Inside Higher Ed by Harold O. Levy, the former NYC Schools Chancellor and executive director of the Jack Kent Cooke Foundation. <https://www.insidehighered.com/views/2017/01/12/discrimination-inherent-early-admissions-programs-essay?>

I have great respect for Dr. Levy and for the significant work done by the Cooke Foundation to advance students of great potential from economically disadvantaged families. But early admission programs are not discriminatory by definition at the bulk of the nation’s 2300 non-profit, four-year colleges and universities. And in fact, they do not have to act against the inclusion of disadvantaged students at the nation’s most prestigious institutions. Here’s why.

While it is true that many low-income students are not aware of early programs because they are first generation and attend high schools where counselors are responsible for 1,000 or more students each, colleges can and do promote Early Decision and Early Action in all of their search communications, on their web sites and in their brochures. And those of us who are committed to enrolling low-income students go out of our way to connect with them and to make them aware of early programs while saving places for them in the regular pool. Pell-eligible students represent 35% of the enrollment at my institution, Drew University, and we have an Early Decision program, so it can be done. Further, these students graduate at the essentially same rate as the other two-thirds of the student body, so they are being served well.

Many highly selective colleges are now test optional in admission, so the fact that low-income students may not have test scores in time for early deadlines is a non-issue at those institutions. And the notion that low-income students can’t commit to enrolling through an Early Decision program because they need financial aid is an equally empty hypothesis. First of all, the early FAFSA allows colleges to award actual aid upon Early Decision admission. Secondly, as every ED institution will tell you, if the aid is not sufficient in the family’s mind, the student will be released from the ED commitment. I always tell students and their parents that they should apply in a binding Early Decision program only if parents know how much they are willing and able to contribute toward college expenses, and if they are not interested in comparing offers from other schools. If they receive enough to make attendance possible, and if the college is the student’s first choice, then the process has successfully concluded. If however, they want to shop for the best deal, then Early Decision is not for them.

In many ways, ED is the best time to apply for financial aid, because colleges do not exhaust their grant resources during the early round. And as I said, if the aid is not sufficient, colleges will release students from the early commitment. This is a “no lose” proposition for the student.

But Dr. Levy presents compelling evidence of the disparity of incomes represented in Early Decision programs:

The Cooke Foundation study found that only 16 percent of high-achieving students from families with annual incomes below $50,000 applied for college admission on an early-decision basis in the 2013-14 academic year. But 29 percent of high-achieving students from families with incomes above $250,000 applied on an early-decision basis. Is it any wonder that so many more upper-income students gain admission?

To be fair, this needs to be put into context. According to the Pew Research Center in a 2014 report, < http://www.pewresearch.org/fact-tank/2014/01/15/college-enrollment-among-low-income-students-still-trails-richer-groups/ > 51% of all low-income students were enrolled in college compared to 81% of all high-income students (low income= bottom 20%; high income = top 20%). In other words, many more high-income students enroll in college in the first place, so it is not surprising that many more high-income students also enroll through Early Decision.

This underscores the real issue for American higher education. We need to spend less time advocating for the elimination of a program (early admission) that attracts higher income students (who, by the way, help to bring in the revenue to support lower income students) and more time – as the Cooke Foundation and many colleges do so well – developing better ways to recruit and support low-income students. The future competiveness of our country depends on it.