Undiscussed Scandals of America's Universities

"Every generation, civilization is invaded by barbarians. We call them children."
 - Hannah Arendt

As most of my readers know, my wife’s a teacher of intellectually gifted children and she is phenomenal at what she does. Teacher of the Year, coach of a nationally competitive robotics team, highly competitive cheerleading coach, etc. If you were to assume that we read a lot, you would be correct. She loves historical fiction and I miss Tom Clancy’s writing more than I can express. Of course, we also read the “hard stuff” and have books on history, biology, chemistry, mathematics, engineering, physics, energy, and economics floating around. She and I spent a few minutes calculating the number of books that we have accumulated over the years…that now rest in her classroom and our home. Ten thousand. I know that sounds high, but we did the math and two people can do that over a few decades.

My wife and I love to learn and we value education. I believe most of us do.
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That love of education explains why the nation was outraged when the WSJ broke the story of Lori Loughlin’s (of Full House fame) involvement in the Operation Varsity Blues scandal; and why it was outraged again when it read of the scandal in which 38 families in Illinois released guardianship of their children to other family members in order to game the system and receive more financial aid; and why the rage turned to fury upon hearing of the Jack Zhao scandal where he purchased the home of Harvard's fencing coach for more than $400,000 above the market price, sold it 15 months later for a $330,000 loss... but Jack’s son found himself on Harvard’s fencing team.

As ugly as those stories are, our higher education problems run much deeper than mere fraud. The good news is that it is within our power to bring sanity back to our higher education system. That said, old ways die hard…

​Hard Question
What is the purpose of a college education? It’s a simple question, but many have difficulty answering it. In an article published in Psychology Today, a sociology professor summarized the answers articulated in various essays I had read, but he did so from a public policy perspective. That professor said higher education’s purpose is to:

1. Improve the cognitive and non-cognitive skills of students
2. Research questions of national interest
3. Provide for the access of students from lower-incomes and under-represented minority backgrounds.

If you’re like me, you find the list oozing with politically correct sentiment and verbiage. Personally, I find myself a little short-tempered with expressions of similar ilk. I want to share my views on higher education’s purpose, but before I do, we need to have a very frank conversation about difficult topics and hard truths.

Truth #1 – Intelligence and Academic Capability
The first truth is that the average college student today is not like the average college student of fifty or sixty years ago. I am not talking about generational differences. I am talking about intellectual and academic capability.

The average college student today is less intellectually and academically capable relative to his/her peers than the average student attending college in 1960 was relative to his/her peers. I know that hurts to hear, but it is true…and we must stop pretending that it is not so.

What do I mean?

Well, think about the people in any large society, at any location, at any time in human history. Some small percentage of those people are highly intellectually gifted relative to the average person in that society. Most of the members of that society are “in the middle” with respect to their intellectual capability and relative to the entirety of that society’s members. A small percentage, often approximating the percentage of those that are intellectually gifted, are significantly below average in intellectual/academic capability. This is a simple observation of the IQ of the individuals in any nation in the world, where the plotting of their individual IQs results in a bell curve shaped graph.

Now, think about what that means.

In the 1960’s, only 4% of American high school graduates attended college. My reasoned assumption – even when acknowledging and accounting for the fact that many individuals at the time were barred from attending some universities because of their race or sex (unbelievably stupid thing to have done)  - is that the 4% that attended college fifty or sixty years ago were a mix of very gifted and average students…with a directional lean in favor of those students that had above average IQs.

Do only 4% of America’s high school graduates enroll in college today? Heck no. Research indicates that nearly 70% of today’s high school graduates enroll in college. Unless you believe that we live in Garrison Keillor’s fictional “Lake Wobegon” where all the children are better than average, or unless you claim that America’s least academically capable students attended college in the 1960s, you must accept the conclusion that today’s “average” college student is less intellectually/academically capability than his peers of 6 decades ago because of the massive increase in the percentage of high school graduates that enroll in college.

Higher education today is simply capturing a lot more kids that are "average."

Truth #2 – Not all Colleges are Equally Valued
There is nuance to my “average” comment though, and that brings me to the second hard truth. Different colleges and universities cater to the different “average” academic/intellectual capacities of their respective student populations. And please note that I said, “average…populations.” Without a doubt, there are very smart students going to lower tier schools. Nevertheless, the higher the intellectual capacity of the student body (which is the average of the individual students attending a given school), the better the school, the better the school’s reputation, and the better the earning potential of the graduate. You can see that in the tiering of schools.

• Tier 1 – Tends to be highly reputable private schools with a heavy research focus like Stanford, Harvard, Yale, Princeton, Carnegie Mellon, MIT, Princeton, University of Chicago, Vanderbilt, Duke, etc.
• Tier 2 – Tends to be a mix of research focused schools and liberal arts schools, that are private, like Middlebury, Vassar, Notre Dame, Rice, Claremont McKenna, Cornell, etc.
• Tier 3 – These are major public research universities like Georgia Tech, University of Georgia, University of North Carolina – Chapel Hill, University of Florida, Penn State, University of Alabama, Auburn, University of Tennessee, University of California, etc.
• Tier 4 – Everyone else. Interestingly – but not surprisingly when you think about it - 60% of bachelor’s degrees are awarded by schools in this tier.

I have a general concern that many college undergraduates are graduating with majors that have relatively low economic value (and economic value isn’t the same thing as social value and I want that clearly understood, but still…). Before conducting any research on the subject, I hypothesized that higher ranked colleges would have a smaller percentage of their graduates majoring in subjects that had low economic value as compared to lower tier colleges. I thought that was a reasonable assumption, so let's see what the data said.

In Georgia, most of the state colleges have an “institutional research” division that tracks the numbers on the kind of thing we are discussing. As a result, I was able to find data about the number of graduates, by major, by year. I summarized that information in a spreadsheet and then used census data to determine average salaries by major. When I combined the two and then zeroed in on the percentage of each graduate with a major of $50,000 or less, my hypothesis was shown to be correct. Georgia Tech, an outstanding engineering and research university, had less than 4% of its graduates in low economic value majors. The University of Georgia and Georgia State, also two very good tier 3 schools, had 26% and 29% of their graduates in low economic value majors. The tier 4 schools I evaluated were Kennesaw State and the University of North Georgia. The percentage of graduates with low value economic majors ranged from 43% to 51%.

That certainly tells a story, doesn’t it?

Nancy Hass of The New York Times wrote an article titled “Why You Can’t Catch Up” that analyzed incomes of graduates from differently tiered schools. Her research implied that graduates of tier 1, 2, and 3 schools frequently ended up having similar incomes when in specialty occupations. The results differed for tier 4 school graduates, however. Those that graduated from tier 4 schools, even if they later attend higher tiered graduate schools (MBA, law school, etc.), have lower earnings than their tier 1-3 graduates. Why might that be?
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Well, higher tiered colleges provide social mobility and resource advantages that lower tiered colleges do not. If Student A attended Harvard and Student B went to Ferris State, even if both eventually go to Yale for law school, Student A knows and has a deeper relationship with a cohort of people that are likely to be more economically successful than Student B. Those relationships provide Student A a networking advantage that can be - and usually is - leveraged over the course of a career. Relationships matter.

​Hypothetical question for you.

If you were to play fortune teller, what would you foretell the direction of the average college grade over time if: (1) you observed that high school students were enrolling in colleges and universities in vastly higher numbers than in the past, (2) colleges and universities were increasingly stratified based on the intellectual/academic capability of their students, and (3) you knew, colleges and universities knew, and college students knew.... that employers were not able to judge the difficulty of the coursework of students at different schools?

I believe most of us would expect that the average grade would go up....because the incentives line up in that direction. Low and behold, that is exactly what has happened! In the 1960’s, the most frequently given college grade was a "C". Today, it is an "A". And remember, the quality of the average college student has declined.

This is an anecdote that Freakonomics author Steven Levitt needs to mention in his next book…because the incentives are delightfully wicked. If a good (hard) college tries to grade appropriately, it will lose students to competing colleges that are more willing to grade liberally. Students know that employers frequently evaluate them based on GPA and not on class rank (given that class rank somewhat ferrets out grade inflation). Lower tier schools know that they don’t have the reputations of higher ranked schools, but they still want to attract students to their institutions. As a result, they have the motivation to grade more liberally. This liberal grading at the lower tier of the institutional ladder puts additional pressure on upper tier schools to grade liberally. I’m laughing through the tears at the craziness of it all.

If you want to read more about the chart at the top of this article, click here. It's an interesting read.

What frustrates the heck out of me is that the leaders of America’s colleges and universities know about the tiering of the system, the allocation of degrees by tier, and the economic impact of it all. Nevertheless, those educational leaders continue to advocate that Americans obtain a college education (as currently designed). Sure, like a lot of [unthoughtful] financial people, college presidents tell the story of college graduates out-earning high school graduates. They never mention a word of the important nuance you just read. ​These same educational leaders also turn a blind eye to the fact that so many bachelor’s degree recipients are now baristas at Starbucks. To add insult to injury, those graduates of tier 4 schools - with bachelor’s degrees in low economic value majors - frequently funded their degrees student loans.

I am not a big fan of the games played by for-profit colleges, but i am also not naive to the games played by non-profit colleges and universities either. 

Ethics is something often talked about with a great deal of serious by the leaders of higher institutions. Time and again, I hear a college administrator claim that a critical reason for higher education is to make a better, kinder, more ethical citizenry.

Given the facts I have just shared, I believe these people are the same ones that say, "Do as I say, not as I do." Ethics, be damned.

Fundamental Premise is Wrong
One of the most uncomfortable experiences in the world is to find out that what you think to be true is not, in fact, true. Think of the common belief in the early 2000s that there were "weapons of mass destruction in Iraq." Think of the claim that "there are no stupid questions." Think of the once broadly held belief that "the Titanic is unsinkable."

When what we think is true...really isn't... the experience is frightening. The truth is the truth, however. The truth is what matters. The truth is what helps us to grow and improve.

So what does this have to do with colleges? Well, we often hear that they build critical thinking skills in their students. Is that true?

There are those that believe that critical thinking skills exist and that those skills can be transferred from one discipline to another. Theoretically, these skills don’t rely on “domain specific” expertise, thus they can be learned and applied across all academic disciplines. Educators of all kinds, K-12 teachers thru PhD program advisors, regularly talk as if this is fact. Is there data to support this belief? Well, read on...

In the other camp are those that believe knowledge is more specialized. They observe that educational researchers have not – even after decades of discussion - clearly defined what they mean by “critical thinking skills”. A few years ago, two educational experts used the test scores from the Collegiate Learning Assessment (CLA) to evaluate the effectiveness of colleges and universities in improving their students’ critical thinking skills, at least insofar as the test measured those skills. What they found was very disappointing. For the most part, college graduates’ critical thinking skills were little to no better at graduation than they were when the students first entered college. Another researcher, Stephen Norris, writes “There is no scientific legitimacy to the claim that critical-thinking ability involves ability to control for content and complexity, ability to interpret and apply, and ability to use sound principles of thinking. If anything, scientific evidence suggests that human mental abilities are content and context bound, and highly influenced by the complexity of the problems being addressed.” These researchers argue that knowledge is contextual and intimately connected with a given subject. In short, thinking is always about something.

For us regular humans, that means that Neil deGrasse Tyson may be a very good astrophysicist, but on discussions of economic issues, he is likely to be no more insightful than your average Joe or Mary. Domain expertise is the name of the game. 

Telos is a Greek word for "ultimate object or aim." The telos for American universities is supposed to be truth. Given the research findings about critical thinking skills, educational leaders must feel that the foundation upon which much of their philosophy rests... is more sand than granite. Educational leaders should accept the reality, however. There is still a huge opportunity though, because much can be done to improve domain specific knowledge and skill.

General Vision for Higher Education
In my view, the world has changed dramatically from 60 years ago. Specialization is increasingly important... and that is exactly what we should have expected if we believe in capitalism.

Irrespective of whether all our K-12 public schools are as effective as we would like them to be, the purpose of K-12 education is rooted in a liberal arts curriculum. Reading, writing, arithmetic, history, civics, and the arts are addressed at this level of education. What we learn there are broad, general skills that citizens need.

So what is the purpose of higher education?

The overwhelming majority of people go to college because they believe it will help them develop the skills that allow them to obtain better jobs, have more enjoyable careers, during which they will earn more money.... than those that choose not to attend college. If that is true, let us stop discussing how college makes better citizens. While I honor the citizenship objective, it is unrelated - or distantly related - to the purpose of higher education from the perspective of those that are paying for that education.

The primary purpose of higher education is well-paid future employment.

If you agree, then let us stop playing games and instead, let us be laser focused on that goal. An awful lot of higher education is not economically valuable and that either needs to stop, or those that choose to study those subjects need to pay for that knowledge in a fashion that doesn't place them in debt.. 

I was recently accepted into a PhD program, thinking it would be fun to ride off into the sunset passing a little knowledge and wisdom to the younger generation. After learning that PhD level business research is not actually expected to yield knowledge that has real world business impact, and learning more about the conformity required for those choosing to work in those institutions, I withdrew from the program. 

Our institutions of higher learning I believe still "work" for those in STEM fields. In the business fields however - outside of accounting - I believe the current state of higher education is deeply flawed. Yet, it doesn't have to be! If there was a focus on domain specific skill development, it could be great!

Final Thoughts
The time between ~1700 and ~1800 is known as the Age of Enlightenment. Its focus was on science and reason. It was skeptical of the divine right of kings, priests, and the Church's involvement in government.

America was founded during this time and we clearly were and are heavily influenced by that age. Our culture values science and reason. That is why we value education. In valuing education however, I believe we have gone too far. We have created a priestly class in the form of our higher education system. Too often, we allow "arguments from authority" (those with titles or degrees) to outweigh valid, logical criticisms.

We should be skeptical.
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Across the centuries, men and women have observed that it is easier to destroy than to build. I have criticized America’s colleges and universities harshly. That criticism is deserved. I want readers to know that my criticism is expressed in the sincere desire that our colleges and universities do better… so that our society may be better. We can build.

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Author

Bruce Wing is the president of Strategic Wealth, LLC, a fee-based Registered Investment Adviser located on the north side of Atlanta.