Back in 2005, the Atlantic ran a piece about financial aid leveraging as a tactic used by colleges and universities to recruit wealthy and “high performing” students. Along with the growth of the “enrollment manager,” the article discusses the ethical and moral dilemma faced by institutions of higher ed as they compete for US News rankings and student-generated revenue. Back in 2005, a few years before the speculative finance industry imploded, it apparently didn’t seem like a bad idea to shape admissions policies on the business practices of credit card companies and airlines. The language of “merit” obfuscates the economic logic behind these changes:

…private schools went on a spending spree, buying up “meritorious” students (defined as gifted or rich, but ideally both). And public schools jumped at the technique as well: from 1992 to 2000 the proportion of state aid based on merit rose from just under 10 percent, where it had hovered throughout the 1980s, to 25 percent. Since 1990 the average discount on “sticker-price” tuition has risen from 26.5 percent to just under 40 percent, and the proportion of students not paying full price has grown from 62.5 percent to 80 percent.

The class implications of this are striking:

One of the basic texts of enrollment management recommends a book about pricing techniques developed by the airlines: Revenue Management: Hard-Core Tactics for Market Domination. Using the logic of the Saturday-night stay and the fourteen-day advance purchase, advanced financial-aid leveraging goes beyond general categories to forecast how much each student is willing to pay, and guarantee the best class at the lowest price.
In the least desirable categories (usually poor students with lower test scores) accepted students are often “gapped”—given a fraction of what they would need to attend, even after the maximum possible contribution from their families. (A school interested mainly in revenue might even give more money to a wealthy student with lousy scores than to a better-qualified poor student.) From 1995 to 1999 the average unmet need for families earning over $60,000 either stayed constant or narrowed slightly; for families earning $40,000 to $60,000 it grew by three percent; and for families earning under $40,000 it grew by 27 percent.

One would probably be hard pressed to find an administrator today who would openly list either airlines or the financial industry as models of best practices. (Except for, perhaps, on the issue of administrator and executive compensation, as another recent post reports.) We should ask, however, what mission current enrollment policies, especially of public institutions, serve.

The effects of such policies at our own institution need scrutiny. As the CFA response to President Hogan’s enrollment management plan points out

UIUC undergraduates are 7% African-American compared with 15% African-American population for the state; Latina/o students are 7%, compared to 16% statewide. The figures for American Indian students at UIUC are minuscule.

If such disparities are the result of increased attention to “merit” and heightened competition for rankings, we should be reevaluating our standards of excellence.