Tue 11 Jan 2005
For Day 1 of our experiment in creating a Cross Generational Community of Learning, our assigned reading is “The Blurring Line” by Michael S. McPherson and Morton Owen Schapiro.
Today’s discussant is Richard Dunn ‘02. He comments:
What is the role (are the roles?) of universities in the United States?
I would argue that higher education is institutional, in the same sense that the military or the Supreme Court is institutional. It is straight-forward to describe what universities do, but the institutional aspect relates to what “the university” means. The military is the institutional form of bravery and honor; the Supreme Court is the institutional form of fairness and wisdom (quite a separate trait than intelligence); the university may be the institutional form of progress, discovery, honesty, truth, opportunity, etc.
What does the university mean to American society? What does Williams or Harvard mean to American society and to us? If universities establish society’s desire for the honest pursuit of knowledge, what does it mean when universities twist financial aid decisions? Surely universities are entitled to tailor policies, but shouldn’t these policies be explicit? And is the pursuit of knowledge antithetical to the mission of universities as the great equalizers in our very unequal society? How can a leading college like Williams be both a place that educates the “most talented” (I leave that to you to decide how talent is measured) and enables those from otherwise disadvantaged backgrounds to attain for themselves and for their children the advantages associated with a degree from Williams? Can it? Should it?
Should universities be meritocracies? How is financial aid a tool to accomplish the goals of the university and if you had to decide between funding merit or funding need what would you choose?
Good questions all. Many thanks to Richard for taking the time to read the article and for providing this start to our discussion. Others are encouraged to answer Richard’s questions in the comments and/or to provide their own thoughts on the article.
4 Responses to “ CGCL: Day 1 ”
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March 3rd, 2008 at 9:42 pm[...] ranting on this article another day. Previous similar rants here, here and here. « Recruiting Athletes, Small College Style | The Bicentennial [...]
January 11th, 2005 at 7:36 am
Small point. On page 44, the authors write that
True. But even worse is (was?) Williams’ practice with regard to Tyng Awards of implying to recipients that “need” means one thing and than changing the definition once applicants have already committed to Williams.
I have no first-hand knowledge of the issue and just because two winners, over a 10 year period, complained about the College’s actions is not enough evidence to reach any sort of conclusion. But, if I could figure out who the Tyng administrators are, I would bring this to their attention.
January 11th, 2005 at 3:23 pm
One one level, “The Blurring Line” provides empirical evidence that Admission Deans like Richard Nesbitt ‘74 are skilled professionals. Although schools like Williams often try to pretend that they do not provide merit-aid — that all financial aid decisions are based on some magical calculation of the exact “need” of each applicant — this is not, in fact, how the system operates. Colleges are in competition for the best applicants, and those applicants are (more or more) aware of the competition. Bidding wars are the natural result. McPherson and Schapiro (henceforth MS) simply provide clear evidence that what everyone knows about financial aid decisions is, in fact, true and, more importantly, economically important.
Put yourself in Nesbitt’s shoes. One of his jobs is to convince Jill Senior to attend Williams instead of Amherst. He first accepts her and
then offers her a financial aid package that meets her demonstrated need. She replies that the Amherst package, while also theoretically just matching her “need,” is better in that it is more grants and less loans.
At this point, Nesbitt can either improve Jill’s aid package or not. How much he is inclined to do so will depend on how desirable a candidate he thinks Jill is. MS, using SAT score as a proxy for desirability, provide convincing evidence that more desirable candidates get better deals.
Note that this is in stark contrast to the good old days when colleges like Williams and Amherst actively colluded. Back then, Williams and Amherst and other elite colleges decided together beforehand what sort of financial aid to offer each admitted student. The packages were made similar enough that, for a given student, the financial costs to attending any school were the same.
This was great for the schools but lousy for the applicants. Unsurprisingly, it was also illegal. Although MS don’t present any time series evidence, it seems clear that the last 15 years has seen an increase in the competition for students. It seems likely that this competition will only grow stronger and that, as more and more information becomes available to applicants the deals they strike will become better and better. MS are probably correct to note that:
As my daughter would say, “And that would be bad because . . . ”
Dollars that come out of the school’s pocket go into the student’s pocket. Why do MS think that the world is a worse place for that?
On a deeper level, “The Blurring Line” can be read as perfecty illustrating the underlying worldview in US higher education. The basic premise of that worldview is that elite schools like Williams are, fundamentally a force for good and that, therefore, anything which makes them worse off financially is a bad thing.
The end of collusion on financial aid and the resulting competition for students is, therefore, a bad thing because it means that Williams gets less money from tuition even though it enrolls the same students.
But why is that, ipso facto, a problem? Why should we be concerned when a Williams student needs to take out $10,000 less in loans under the current system of competition than she used to under the old system of collusion? Why is less debt for her (and less revenue for Williams) a problematic outcome?
I don’t think it is. I think that competition among colleges is a good thing just like competition among car companies is. Of course, there are many things that make competition in higher education a different sort of beast — as MS and various co-authors have eloquently described over the years — but, as a first approximation. competition is a better system than collusion.
Unless, of course, you happen to be president of one of the colluders.
[That last comment sounds more harsh then I intend it to be. Both Schapiro and McPherson are former professors of mine. But, it is striking how similar the arguments made by defenders of collusion in higher education are to those made by defenders of collusion in other industries.]
January 11th, 2005 at 10:54 pm
Brushing up on my history reading, I came across this quote from the Airline Pilots Association in 1977:
The argument, prior to airline deregulation, was that only a regulated market, for something as complex and important as air travel, would work.
Then there’s this one, from the president of AT&T in 1982, back in the days of monopoly phone service:
The argument was that, only a monopoly could ensure that everyone (including unprofitable rural customers) had access to basic phone service.
Diligent participants in the CGCL will realize, of course, that I made up those two quotes. But I am not making up this one (page 9):
McPherson and Schapiro are in a similar position, analytically, to defenders of the status quo in airlines in the 1970’s and AT&T in the early 1980’s. And, analytically, it is not an unreasonable position.
In other words, reasonable people did argue that certain desirable things would be lost with deregulation in airlines and telecommunications. For example, airlines stopped serving certain smaller and unprofitable cities. Phone companies made local service more expensive relative to long distance. There were losers as well as winners.
But the consensus surely is that change was for the better. Competition worked. Capitalism delivers the goods. Why is there any reason to believe that a lack of competition is a good thing for the market in higher education?
Of course, it is somewhat unfair for me to bring this up in a discussion of “The Blurring Line”, since that is not the main point. Yet I argue that we must keep this underlying assumption in mind when we evaluate the various policy suggestions that MS propose.
After all, there is much to be said for standardizing forms. No one is hurt when Williams and other schools agree to use the Common Application for admissions. If MS are arguing for similar standardization in financial aid simply to make the lives of applicants easier, it would be tough to quibble.
But MS clearly view such standardization as a means for decreasing the amount that colleges compete for students. It is a way station on the road to putting less money in the pockets of students and more in the pockets of colleges. If everyone were to fill out the same forms and all colleges were to calculate need identically, then collusion becomes easier.
But, if you don’t want collusion, then you don’t want the colleges to compare notes, to set up working groups, to coordinate policies. In fact, you may remember the readings from The Wealth of Nations that Professor McPherson assigned 18 years ago in POEC 301:
There is much in the formation of groups like this that does not warm the heart of a father hoping to see colleges compete over his daughters.
[On a personal note, I hope that Professors Mahon and Oak did as good a job in 301 this past year as Professors McPherson and Tauber did in 1986. If they did, their students will remember them for decades to come.]