The Inequality Machine

Buck Goldstein
Entrepreneur in Residence and Professor of the Practice UNC-Chapel Hill

Nicholas Kristoff and Sheryl WuDunn, the Pulitzer Prize-winning authors of Half the Sky, share the untold story of rural America in their new book, Tightrope: Americans Reaching for New Hope. Kristoff and WuDunn refer to the American higher education system as “an inequality machine,” before they go on to say: 

College entrance may be based on metrics that seem meritocratic, like board scores and grades, but consider that 77% of kids in the top quartile of incomes graduate from college, compared to 9% of kids in the bottom quartile. This matters hugely for life outcomes and social mobility: a college degree on average is worth an additional $800,000 in lifetime earnings. 

For those of you who are higher education insiders, this is no surprise. For those who find this shocking, welcome to the reality of American higher education. Historical context and hard data are often in short supply when analyzing this problem and others like it. The result is a conversation long on politics and short on analytics. I love the term Inequality Machine as a way of elevating the public consciousness of college access and completion issues. However, it is worth considering what we know and what we still need to know before addressing the challenges the term suggests.

Arguably, higher education has been an Inequality Machine since the founding of the first university in Bologna, Italy in 1088. The students hired and fired their own professors, meaning only those who could afford to pay for professors could become students. Harvard University was granted its charter and tax-exempt status 400 years later, with the mission of providing a learned-ministry to the colonies. 

The tax-exempt status created the fundamental template for US Higher Education: government support in exchange for educating the elite. Subsequent expansion of government support through the creation of land grant universities and the GI Bill (1944) expanded access to higher education. With the advent of the Pell Grant in 1965, government aid was explicitly targeted to reduce inequality. For a variety of reasons, including a rapid rise in the cost of attendance, reduction in government support, and the changing demographics of the pool of college-age students, Pell Grants alone will no longer get the job done.

If Pell Grants do not solve the Inequality Machine, how can we proceed? I suggest considering the contours of a research agenda that will inform decision-makers. What do we need to know, that we don’t already know, that would help schools address The Inequality Machine? I’m curious about the following:

  1. Will test-optional or no test admissions policies increase application numbers and ultimately admissions from students in the bottom quartile of incomes or will the policy merely increase opportunities for affluent parents to game the system? There is conflicting data on this question, but related experiments are beginning across the country. Northern Michigan University just abolished the use of testing in admissions and financial aid while the State of California considers a test-optional policy.

  2. Will substantial reductions in the cost of college, or even transitioning to a free college program, increase applications and graduation rates? All but the most selective institutions are cutting prices in order to attract students. Early results from three colleges in North Carolina that cut tuition to $1,000 a year for in-state students and $5,000 for out-of-state students are promising. One administrator described the impact as “like a booster rocket”. More hard data on the impact of low or no tuition is critical to the national conversation on the subject.

  3. Is going to the “best” college you can get into the right choice for all students?  This has been the conventional wisdom for years; the scores of books and articles on the college admissions process seem to take this as an established fact. Some scholars are pushing back, however, with Jennifer Morton leading the charge in Moving Up Without Losing your Way. Morton’s interviews with first-generation college students suggest that the immeasurable costs to identity, family, and community may outweigh the benefits of going to an elite school. We need to learn more.

  4. Do improvements in campus climate and classroom instruction result in an increased success rate for underrepresented students? Visionary work on inclusive teaching is being done by such professors as Kelly Hogan and Viji Sathy. Almost all campuses are attempting to adapt to a changing student demographic, but we are far from fully understanding the effectiveness of these efforts.

What else do we need to know to address the Inequality Machine? Let me know what you think. My colleagues and I at UNC-Chapel Hill are in the midst of developing a research agenda, and we want to include these issues in our thinking. 

A Guaranteed Job or Your Tuition Back

Buck Goldstein
Entrepreneur in Residence and Professor of the Practice UNC-Chapel Hill

Yesterday was the last straw. A slightly under-employed scientist with multiple post-graduate degrees who is married to a physician asked me if I thought college was worth it. I gave him the answer I can now repeat in my sleep. All the data says, “yes, if you finish on time and don’t take on too much debt.” But as the conversation progressed, it became clear to me that it was time to throw in the towel. The standard defense of a college degree is just not good enough anymore.

Now consider a thought experiment. What if a college degree came with a guaranteed job or your money back, and the offer stands regardless of your major? For students and their parents, such a guarantee would remove a huge source of anxiety. It would give students more flexibility to explore all that academia has to offer without worrying about how such exploration will impact their chances on the job market. For colleges, such a commitment would address the number one concern of potential students and their parents: after years of hard work and thousands of dollars in tuition, will there be a job waiting once the tassel has been moved from right to left? Removing the pervasive fear of student unemployment will improve the overall campus climate by encouraging the pursuit of knowledge for the sake of knowledge, as opposed to knowledge for the sake of securing a job. Most importantly, such a guarantee may help reverse the alarming decline in the application rate currently being experienced by almost all colleges and universities.

This idea isn’t as outlandish as it might initially appear. The oldest universities in Italy, England, France, and Spain were founded to train the clergy and civil servants. Their students received a virtual job guarantee upon admission. A similar situation currently exists among the 75-100 elite U.S. colleges where well over 90% of students are employed or enrolled in graduate school upon graduation. Virtually all colleges assert that a degree from their school will help students get a job and prepare them for a good life. Students, however, are increasingly skeptical; merely improving the marketing message doesn’t do the trick. Schools need to put their money where their mouth is.

In addition to providing students with an overwhelming value proposition, a job guarantee might result in other changes that would be beneficial to students and colleges. Schools would have a tangible financial incentive to focus on career readiness. Default on the guarantee would result in a stiff financial penalty. It is likely that the guarantee would also impact a school’s curriculum by including 21st-century skills that are valued in the job marketplace, supplementing the habits of mind that are traditionally associated with a liberal education. Inevitably, partnerships with the private and civic sectors to provide jobs to graduates would influence the aspects of the curriculum aimed at job readiness.

A job guarantee will not, by itself, eliminate public skepticism about the value of higher education. For too many families, high tuition still puts a college education out of reach. Outdated teaching methods must also be addressed because a guarantee would attract a more ethnically and economically group of students than would otherwise be the case. But these problems should be welcome when compared to the alternative: a shrinking pool of applicants, and the ultimate demise of hundreds if not thousands of our colleges and universities.

Values in the Higher Education Space

Buck Goldstein
Entrepreneur in Residence and Professor of the Practice UNC-Chapel Hill

After eighteen months of thinking about the problems facing American Higher Education almost full time, I’m struck by how difficult it is to reach definitive conclusions.  The difficulty stems not because the problems are inherently hard to solve but rather from fundamental disagreements over the values that underlie the solutions. Consider the higher education issues currently dominating the news cycle.

Admissions. Until recently, there was a general belief that admissions decisions were objective based upon grades and test scores but that myth has been blown apart by the recent college admissions scandals and high profile litigation challenging affirmative action. With the illusion of objectivity tossed away, it is clear that admissions decisions are driven by a set of value judgments made by a combination of administrators, board members, and politicians. Is it fair to use standardized tests with their strong correlation to income as a factor in admissions decisions?  Should the children of alumni, athletes, or others with special skills be given preference? What about economically disadvantaged students or those from historically underrepresented groups?  What complicates matters is the value judgments raised by these difficult questions matter deeply to a wide variety of citizens many of whom will feel they have been treated unfairly no matter how the judgments are made. Value-based decisions that are guaranteed to profoundly disappoint a significant number of people are truly a no-win situation. This is the reason there will be no easy answers when it comes to the college admissions process.

Student Success.  There are many valid answers to the question all universities must answer:  How do you measure success? Ask an entering first-year or her parents and they will likely tell you success is graduating on time with a good job.  Ask a faculty member and you will hear talk about preparing students for good citizenship and a useful and productive life as well as discovering new knowledge that makes a difference in the world. An administrator concerned about diversity and access will point to completion rate as the most important success measure because admitting a diverse student body only works if admitted students finish and faculty members stay. The increased cost of college and the fact that most students incur debt makes the answer to this value-laden problem an important one not only for students but for institutions who must make the case that college is worth it in the face of increased public skepticism about the value of a college education.

Governance.  No subject is more value-laden than university governance.  The firing of Presidents by angry Trustees, removal of Confederate memorials, free speech and classroom indoctrination have all become front-page news and political lightning rods for the right and the left. None of these controversies are strategic or require complex analytics in order to resolve them.  Rather they require agreement on the basic values that define the very idea of a university.  Is higher education worthy of public support and if so, what is expected in return? What constraints, if any, should be placed on free speech both inside and outside the classroom? Should the university be run like a business or is it something different requiring adherence to long-standing principals of shared governance and academic freedom? Should a public university be a vehicle to achieve social mobility or a strict meritocracy where admission and advancement are based on standardized test scores and rigid grading structures? Different institutions will resolve these difficult issues in different ways.  What is critical is these value-based issues be acknowledged and, to the extent possible, resolved.  The biggest disasters in university governance result when they are not.

Free College. Higher education will appear most prominently in the upcoming election cycle in the form of what is being called Free College.  Like the other big issues, a set of values underlie the proposal. Are all Americans entitled to attend any college they are admitted to free of charge? Are they entitled to attend any publicly supported school at no cost? Alternatively, should aid for higher aid be based on need and if so should aid only to the economically disadvantaged or to the middle and upper-middle class as well?  What impact will a vast government subsidy have on university governance? The answers to these questions can be developed at an institutional level, resulting in a diverse set of educational models or at a societal level where higher education becomes an absolute right. The debate may appear to center on costs but a little digging will reveal that the issues are more fundamental.
With the help of many of you, I’ll dig deeper into these and other issues facing higher education from a new perch as a member of the faculty at the School of Education at UNC.  With the support of two planning grants, my colleagues and I will begin exploring how a research university can best contribute to the conversation.  You’ll be hearing more about that in weeks to come.

Some Thoughts on College Admissions

Buck Goldstein
Entrepreneur in Residence and Professor of the Practice UNC-Chapel Hill

When we wrote Our Higher Calling, we hoped it would add to the critical conversation about America’s colleges and universities and their relationship to the broader public. It quickly became clear we should have paid more attention to admissions, especially now that the whole admissions system seems to be on the verge of blowing up.

I’m not sure anyone could have predicted the Hollywood-ready details of the Varsity Blues bribery scandal. But even before the FBI blew open the secret world of malign influence in college admissions, it was clear that public trust was on the wane.

The vast majority of colleges and universities in America aren’t very selective, which means the drama of high-stakes admissions involves a relatively small number of families. But those families are highly influential; as a group, they have an outsized impact on the delicate partnership between higher education and the public. And many of those influential families are frustrated by a system that feels neither fair nor transparent, even to those most likely to benefit from it.

There is now a raging debate about the advantage given to large donors and legacy admits, along with new questions about the fairness of standardized testing and the whole process of “holistic admissions.” The 2018 announcement by the University of Chicago of a test-optional policy and the prospect that the entire University of California system will follow suit only adds to the calls for reform. The avalanche of books on the subject of admissions and testing suggests that at least the book-buying public has become obsessed, as affluent parents try to sort out the new rules of the game and ensure their children receive a fair hearing — or an outright advantage.

At the same time that admissions among selective colleges are under great scrutiny, overall college applications are down nationally, leaving hundreds of schools in financial distress. Among smaller, less well-known colleges, a new closing or merger is announced almost weekly. While the validity and appropriateness of the SAT and the ACT are being questioned, more students than ever are taking these exams and this number is expected to continue to grow.

In an effort to make sense of these contradictions, I gathered a group of colleagues and friends for an off-the-record conversation which proved to be both informative and surprising to me even after a year or so of discussing and reading about admissions.  I’ll provide a brief summary of what was discussed:

Public Dissatisfaction. 
The pushback against K-12 standardized tests becomes stronger when combined with the data showing that test scores are highly correlated to income and family background. This discovery has drawn opposition to standardized tests for college admissions from all ends of the political spectrum. The Varsity Blues scandal highlighted the fact that large donors, legacies, and others have traditionally been advantaged in the admissions process.  In addition, most college applicants have a gripe of one kind or another with the SAT or ACT because their scores were lower than they expected. More students than ever are receiving rejection notices from colleges (largely because they apply to many more schools than in the past). These factors have combined to form a perfect storm that has negatively shaped the public narrative on admissions.

Admissions is a group exercise with singular consequences.
When schools make admissions decisions, they’re thinking about the whole class. They’re not really weighing the subjective worth of any individual student, but figuring out what combination of traits, skills, and demographics they want on campus right now. But students experience admissions as a deeply personal, individual decision. That disconnect fuels an enormous amount of angst and misunderstanding.

High school GPA is the single best predictor of performance in college.  GPA and test scores together are slightly better than grades alone. Tests can, at best, predict 1/3 of the variance in the GPA of first-year college students. Most students opt to take admissions tests even if they are optional because they believe not taking the test will work against them, even if this isn’t the case. The most pernicious impact of standardized tests is when they are used as part of a minimum admissions requirement.  The requirement denies admission to students who might well succeed; this is proven by data that indicates when the requirement is waived there is no evidence that students perform worse than the students who met the requirement. 

Impact of Admissions Decisions.
For most students, the selectivity of the college admissions process is irrelevant. Only 17 schools in the United States admit less than 10% of their applicants. Even flagship state universities admit about half or more of those that apply from in-state, and hundreds of public and private schools operate under essentially an open admissions model. Moreover, the data suggest, with a few exceptions, that it doesn’t much matter where you go to college. So long as you graduate with a reasonable amount of debt, you’ll do fine.  However, for a statistically small number of students who apply to selective schools, college admission is viewed as the first of a series of rankings they will receive, and they are convinced a less-than-optimum result will negatively impact them for the rest of their lives. As a result, the objectivity and transparency of the admissions process at selective schools has an impact far beyond the actual numbers of students affected. For better or worse, public attitudes toward higher education are disproportionately shaped by admissions decisions at a handful of big-name schools.

The Number of Students Taking Standardized Tests Continues to Grow. 
Notwithstanding the test-optional movement, the total number of students taking the SAT and ACT is growing and that growth is expected to continue.  This is largely due to school districts and state governments replacing home-grown achievement tests with the SAT/ACT tests.  The rationale typically follows that the tests can be given during school hours; therefore more students will take them, and they are a better measure of achievement than the tests they are replacing.  Another rationale is that widespread testing increases the number of students interested in applying to college. Sometimes this universal testing uncovers exceptional students who would otherwise fall through the cracks and not apply to a selective college that might love to have them.

Community College Is Not the Silver Bullet For Increasing Diversity. 
A joint program between two and four-year schools that allow students to attend an inexpensive school close to home and then transfer to a four-year college for the final two years appears to be an attractive alternative for increasing class diversity. Typically these programs do not require standardized tests for admission. However, community colleges are, in most cases, no better suited than four-year schools to deal with the challenges faced by economically disadvantaged students. In many respects, mostly in per-student funding and extra support services, they’re actually less capable of serving struggling students. Well-crafted partnerships make sense but should only be a part of a set of thoughtful holistic admissions processes.

Schools Must Be Clear About What They Are Attempting to Achieve.
The admissions process is engineered to achieve a particular result but that result is not always clear either to the admissions officers themselves or to the public at large. For schools attempting to move up in the published ratings, high school GPA, acceptance rates, rejection rates, and test scores may be most important.  For others, assembling a class that makes all students better may be the goal. For schools in financial distress, admitting those students that can pay full tuition is a justifiable priority. Admissions should be an extension of the mission and the strategy of the institution. Too often, however, it is the other way around.

Students Are Not Customers (Revisited)

Buck Goldstein
Entrepreneur in Residence and Professor of the Practice UNC-Chapel Hill

Chapter 4 of Our Higher Calling is entitled "Students Are Not Customers." During a recent seminar, a group of graduate students joined with representatives from two distinguished think tanks to unpack that assertion. In the process, they helped develop a more nuanced understanding of the relationship between students and the university as an entity. 
At the beginning of the discussion, the argument was made that, of course, students are customers.  Ignoring them as such and their motivations for attending college is foolhardy and schools that do so will place themselves at great risk. The counter-argument was also asserted that traditionally, the customer is always right. That is not, however, the relationship college students have with their professors or their institutions.
One of our guests, Jenna Robinson, President of the Martin Center for Academic Renewal (link) suggested a middle ground.  She suggested that students are customers during the application process.  They are free to explore all of the alternatives, develop a list of schools that are right for them, apply to the schools that meet their criteria and, in many cases, negotiate a package of discounts and financial aid that allow them to attend.  This process is not terribly different from buying a car or renting an apartment; it certainly fits the paradigm of the student as a customer.

However, once the student is accepted to a school, the relationship changes.  Robinson suggested that relationships can take one of two forms based on a framework developed by Edmund Burke. One is that of delegate where the institution carries out the wishes of the student. The other is that of trustee where decision-making is entrusted to the institution. Robinson opts for the latter, suggesting that upon admission the college becomes a trustee making a series of decisions on curriculum, campus climate, safety, and many others all of which reflect the mission and values of the institution. Customers/students simultaneously decide whether the mission and values of the institution are ones they embrace. Once admitted, they entrust the institution and its faculty to create a structure that ultimately results in a worthwhile college education.


Buck Goldstein
Entrepreneur in Residence and Professor of the Practice UNC-Chapel Hill

Welcome to Our Higher Calling, the inaugural issue of a regular newsletter on the issues I find most compelling in the tumultuous space called higher education.  Over the last 16 months, I have talked to many of you either in person or virtually about the book I co-wrote with Holden Thorp, Our Higher Calling: Rebuilding the Partnership Between America and Its Colleges and Universities. Little did we know that the challenges we outlined would come at us even faster and with more ferocity than we could have imagined. College closings and mergers are no longer unusual and the conversation around them as taken on a new sense of urgency. College access, testing, and legacy admissions have evolved from debates among academics to the lead story on cable news and the fallout has been actual jail time for those involved in the fraud that was uncovered. The cost of college and the debt associated with it is a centerpiece of the 2020 Presidential campaign and “free college” is a phrase that has entered the popular lexicon. Scores more books on these and other subjects have been published since Our Higher Calling was released and many more are planned.  Every day new and important research and commentary comes to my attention.  

We wrote Our Higher Calling to contribute to a national conversation on higher education at a time when it is under siege. I hope this newsletter will further that goal by providing my thoughts on issues I believe are important combined with a summary of other provocative articles I think are worthy of your attention. I look forward to continuing the conversation both in person and virtually on the website



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