Ever since the college admissions bribery scandal in 2019, I’ve been patiently waiting for society to start viewing public schools in a higher light. I postulated that some public schools will eventually be viewed as more prestigious than many private schools since it’s harder to bribe your way in.
According to the FBI, the universities involved in the admission scandals between 2011 and 2018 were Georgetown, Stanford, UCLA, University of San Diego, USC, Wake Forest University, and Yale.
In other words, only one of the schools involved in Operation Varsity Blues was a public school, UCLA. University Of Texas El Paso men’s assistant basketball coach was also caught accepting a bribe. However, UTEP’s acceptance rate is literally 100%, so that school doesn’t count.
When already wealthy families are spending between $250,000 – $6 million on bribes, you’ve got to wonder how rigged the college admission system really is. The people caught are likely only the tip of the iceberg.
Meanwhile, extremely wealthy families are donating hundreds of millions through the front door. These funds aren’t legally considered bribes, but donations. However, we all know the quid pro quo assumption is that all of the children and grandchildren of those families will be admitted in the future.
Change Starts From The Top
As a graduate of William & Mary for my Economics degree and UC Berkeley for my MBA, I’m a public school product. So is my wife. Our parents were not able to comfortably afford to send us to private school. Nor did we want to take on student loan debt to attend private school.
However, as parents of two kids, choosing between public school and private school provides for an endless source of banter. After super funding two 529 plans, my wife and I are lucky enough to be able to now afford private school. Go bull market! We just don’t know whether we should go the private school route or not.
Part of living an optimal life is anticipating change. And it is my belief that many public schools will eventually rank higher than many private schools. Therefore, spending lots of money on private schools may no longer be worth it.
One of the reasons why it’s so hard to change the system is because money is too alluring to deny. It’s hard for a college administrator to deny a $10 million donation from a family with a B+ kid over a poor family with an A+ kid who meets all the admissions criteria.
Ironically, there are plenty of A+ kids in the world. But there are much fewer families who can comfortably donate $10 million to just one institution.
A college administrator could justify the acceptance of a $10 million donation and use the funds to help poorer students. But the data doesn’t play out. Instead, elite private schools accept a much higher percentage of wealthy families than represented in the general population.
It’s Hard To Change The System – The College Board Example
People talk about institutional racism as one of the reasons why minorities have a more difficult time getting ahead. For example, let’s say all of the creators of the latest SAT exam are white. Let’s also assume most grew up upper-middle class and got to experience things like horseback riding and sailing.
If there is an SAT or ACT question that involves words such as starboard, port, stern, bow, bridle, or canter, one can assume the poor Vietnamese kid with no such experience has a disadvantage. Compound these myopic topics across many sections of an entrance exam and is it no wonder why kids from poorer families do worse?
Intuitively, people realize this system is not fair. Yet, if you just take a look at the current leadership of the College Board (creator of the SAT and ACT), you will see that they’ve done little to make it more representative of the American population.
Change is hard, even for a non-profit organization. Once you’re making a lot of money in a leadership position, you won’t want to give it up. Instead, you’ll hold onto your power for as long as possible, half-heartedly trying to make things better for others not like you.
Let’s be frank. If you make close to $2 million a year, like the CEO of the College Board does, are you really incentivized to change the status quo? No, you are incentivized to keep the status quo!
Once it seems like your time is near, you’ll then try and tap the shoulder of someone who probably looks exactly like you or comes from a very similar background to take over. It’s human nature to take care of people you like and know the best.
Below were the salaries of the College Board executives from 2018 according to NonProfitLight.com. Their salaries are up about 15% on average in 2021.
Perhaps the reason why some non-profits don’t have much in profits is because they pay their employees so much.
An Institution Must Take On The Institution To Make A Change
When it comes to making a change, an individual can only do so much.
The college entrance exam system is institutionalized. It is almost impossible to change until another institution boldly stands up and says no more. That happened in 2020, after many years of prodding.
In May 2020, the University of California Regents voted to drop the SAT and ACT from admissions. This was a huge move since the UC system has over 280,000 students. Since the decision, many other schools have followed suit, including those in the Ivy League.
The next institution to push back was Forbes in the way it ranks its universities. This change in ranking methodology is significant. It could do more for public schools, the middle class, and the poor, than any other institution.
Forbes Changes Its College Ranking Methodology
After taking a break from its college rankings in 2020, Forbes decided to tweak its ranking system to better reflect the world we live in today. Forbes writes,
It isn’t enough to ask which schools give the best return on investment. It’s also important to evaluate what kind of students they educate and whether they make themselves accessible to those who can’t afford high sticker prices.
Even if, like Harvard, they promise to pay full freight for the low-income applicants they accept, do they take enough disadvantaged students to make that promise meaningful?
U.C. Berkeley does a much better job at this than does Harvard. At Berkeley, 27% of undergraduates receive federal Pell Grants, aimed at helping low- and moderate-income students pay for college. At Harvard, by contrast, the share of Pell students is just 12%. (On average, 25% of students enrolled in our 600 Top Colleges received Pell Grants.)
The five U.S. Military Service Academies—including West Point—are free and do not offer Pell Grants, although students pay by serving in the military for five to eight years after graduation.
In other words, Forbes decided to look at the hard data and not just accept lip service from private schools. It is easy for private schools with massive endowments to say they are doing their best to provide equal opportunities for all people. However, the reality is they do not.
If these schools wanted to help more people they would accept more people. The demand is certainly there. Further, they would also accept a higher percentage of students from low-income households. However, when you are extremely wealthy (huge endowments), you tend to want to keep that trend going.
Forbes College Rankings 2021 – 2022
For those curious about Forbes’ latest college rankings, here they are:
- UC Berkeley – Public
- UCLA – Public
- U Penn
- UC San Diego – Public
- UC Davis – Public
- Michigan – Public
- University of Chicago
- University of Florida – Public
The top 25 colleges are still dominated by private schools. However, public schools are slowly filling up more spots.
There will obviously be plenty of people from private schools who will object to Forbes’ latest college rankings. However, if more and more college ranking organizations decide to factor in the middle class and poor, perceptions will slowly change.
I think back to my high school days. My family didn’t have the money to pay for $2,000 Princeton Review classes and $50/hour after-school tutors. Instead, my parents told me to go to the library and borrow an SAT guide book.
When I got a mediocre SAT score, they just told me to try again. And when I could score no higher, that was it. No money was put behind me trying to get a better score because we didn’t have much to spare.
It is this indelible memory that drives me to keep Financial Samurai always free. The kids who only have access to the library should have just as much help as those kids who have access to everything.
Be Careful If You Have Money And Power
Of course, the corruption of a few does not represent the majority of alumni who attended elite private universities. Most private university graduates are fine people. However, the world is paying closer attention to nepotism and how money buys access.
Therefore, if you work at a public company, be careful hiring or promoting a relative. If you’re the producer of a hit TV show like Jeopardy, don’t be so stupid as to install yourself as the next host. And if you’re an extremely wealthy family, donate money to a school other than your alma mater to help get your kid in.
Only if you are a politician does it seem OK to elevate your family members to greater power. Perhaps this will one day change in America too.
Attending a very expensive private school when everything can largely be learned for free online might one day be seen as a negative signal. If you are a Stealth Wealth proponent, attending a private school will make it harder for you to keep a low profile. The only way out is to say that you got scholarships.
Finally, given 75% – 80% of undergraduates attend public institutions, it may only be a matter of time before the majority take over.
Public School Rankings Should Continue To Increase
Rightly or wrongly, if you attended Yale and your daughter gets into Yale, people will start assuming some back dealings. She must have got in through legacy admissions. Her father is a Managing Director at Morgan Stanley and probably donated a lot of money. After all, what are the chances both of you get into a school with a 6% acceptance rate?
However, if you went to Berkeley and your son gets into Berkeley, then people may assume the opposite. Wow, your son must be really smart since it’s almost impossible to buy your kid’s way into a public school. Entrance is based solely on merit and employers know this.
Since Forbes’ latest college rankings came out, I’m sure other college ranking organizations will tweak their ranking methodologies as well. If they don’t, they may be viewed as out of touch with the real world. Even worse, these college ranking organizations may be seen as in the pockets of elite private schools.
Eventually, something will come out where a university is caught bribing a college-ranking organization. Therefore, Forbes should be lauded for taking a stance and giving up a lot of potential under the table money or favors.
Ultimately, if more ranking systems become more inclusive, traditionally exclusive colleges will be forced to change the way they admit their students.
It might take 50 years for public schools to dominate the college rankings. However, I’m confident it will eventually happen.
As a parent, I’m excited to see these changes take place! And in 50 years, the debate between public school and private school probably won’t even matter.
Readers, do you think a ranking system that takes the middle class and poor more into account is good? Why do elite private universities claim to champion education for all while keeping acceptance rates so low? Why do private schools continue to favor already advantaged individuals? Do you think public schools will ultimately been seen as more prestigious than private schools because it’s much harder to buy your way into a top-ranked one?
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