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Oct. 7, 2017, 8:35 a.m. EDT

New York Fed president: Legacy admissions to colleges is hurting economic mobility

Poor students make up a relatively small share of students at elite schools

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By Jillian Berman


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William Dudley, the president of the Federal Reserve Bank of New York, criticized legacy admissions in a speech Friday.

Higher education is supposed to be a stepping stone to a better life — a fast track to achieving the American Dream. But the admissions policies of elite colleges are standing in the way of poor students’ ability to achieve that kind of economic mobility, according to one influential economist.

In a speech at a New York City event focused on financial literacy and economic education, William Dudley, the president of the Federal Reserve Bank of New York, decried elite colleges’ tendency to give admissions preferences to children of alumni as “essentially a ‘donate to admit’ policy.” Often providing admission to a student whose family already has a strong connection to the university can help fuel a connection with the school through donations and otherwise.

Many elite schools acknowledge that they take an applicant’s relationship with alumni into account when considering whether to offer admission, but they’re coy about how big of a role it plays.

Many elite schools acknowledge that they take an applicant’s relationship with alumni into account when considering whether to offer admission, but they’re coy about how big of a role it plays and the share of their students that have an alumni connection.

Still, there’s data indicating relatives of alumni benefit during the college application process. A recent survey from the Harvard Crimson, the school’s student newspaper, found that about 30% of the class of 2021 had some sort of familial connection to the school.

“This is patently unfair,” Dudley said in prepared remarks, referring to legacy admissions broadly “and scrapping such policies would help increase economic mobility,” he continued. “I really don’t see how our best universities can continue to justify this practice.”

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Legacy admissions are just one example of the ways our nation’s top colleges reproduce privilege. At 346 colleges across the country, the share of students receiving a Pell grant, or the money the government provides to low-income students to pay for college, is less than 20%, according to a report published earlier this year by Georgetown University’s Center for Education and the Workforce. Of those schools, more than half are among the nation’s most selective 500 colleges. In other words, a small share of students at top colleges are receiving Pell grants.

Though elite private colleges often offer generous financial aid packages to the low-income students they admit, those students make up a small share of the students at their schools. But private colleges aren’t the only schools becoming bastions of the elite. Faced with budget pressure, top public schools are looking for ways to lure wealthy students — including by offering them merit scholarships — to help cope with the shortfall.

Fortunately, there are still many colleges doing a decent job of helping a large number of low-income students move up the income ladder, as Dudley noted in his remarks. Those include the City University of New York and Cal State systems. “Learning exactly how they do it and how it can be replicated strikes me as a first-order question for further study,” Dudley said.

Jillian Berman covers student debt and millennial finance. You can follow her on Twitter @JillianBerman.

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