Higher Education and Economic Mobility

Virginia’s top public universities are largely stratified by socioeconomic status. Consider the following statistics that appear in the new book by James V. Koch and Richard J. Cebula, “Runaway College Costs: How College Governing Boards Fail to Protect their Students.”

  • At the College of William & Mary only 13.6% of the student body comes from families in the bottom 60% of the income distribution. (Only 1.5% comes from the lowest income quintile.)
  • At the University of Mary Washington only 15% comes from the bottom 60%.
  • At the University of Virginia only 15% comes from the bottom 60%.
  • At James Madison University, only 16% comes from the bottom 60%.

Those numbers compare to an average of 47% from the bottom three quintiles for all public four-year institutions nationally.

Is this a good thing or a bad thing? It depends upon your perspective. It is widely acknowledged that academic achievement is highly correlated with socioeconomic and educational status. Parents in higher socio-economic brackets expose their children to more spoken vocabulary, emphasize reading at an earlier age, send their children to better schools, and set higher expectations for academic achievement. From one perspective it is understandable that these children would be more likely to be admitted to elite academic institutions.

But there is a growing body of thought that colleges and universities should aim to foster upward economic mobility. In this regard, individual Virginia institutions fall far short. This perspective appears to be that of Koch and Cebula.

Koch is one of the most astute critics of higher education today. In his previous book (which I highlighted in Bacon’s Rebellion), “The Impoverishment of the American College Student,” he detailed how institutions of higher education have let tuition, fees, and other costs of attendance race far ahead of the inflation rate over the past 20 years and how the usual excuse — cutbacks in state aid to public education — accounted for only a fraction of the increase.

With this new book Koch and his co-author are delving into the question of how universities’ governance structures have allowed this to happen. Year after year, boards of trustees in universities across the country have rubber stamped cost increases submitted by school administrators — usually unanimously, and very rarely with any debate or pushback. It’s an excellent question, and I will have more to say about it in future posts.

But I do take issue with a perspective adopted early in the book, that there is something about elite academic institutions prioritizing enrollment of elite students. As Koch writes: “The salient public policy question is whether it is wise for states to encourage the evolution of institutions … into campuses that are effectively closed to wide swaths of these states’ citizenry.”

Drawing upon a Harvard University Opportunity Insights database, Koch publishes the “Income Mobility Rates” for public universities across the country. This index incorporates two variables: (1) the percentage of bottom income-quintile students admitted to the institution, and (2) the percentage of those students who wind up moving to the top income quintile. By this measure, certain Virginia institutions rank among the lowest in the country.

William & Mary has the lowest ranking among all institutions examined, with a Mobility Rate Index of 0.52. James Madison is 0.75, Mary Washington 0.77, and the University of Virginia 1.46. The average for all U.S. institutions is 2.28 — with Old Dominion University (where Koch was formerly president) scoring 2.37. At the high end of the scale are several New York universities with Baruch College leading the nation with at 12.94 score.

Based on Koch’s data, it appears that Virginia institutions do well, if not better, than most in the second measure — helping low-income rise into the ranks of higher income-earners. But they admit so few poor students to begin with that they still score among the lowest overall in Harvard’s mobility rankings.

Koch argues that this mobility data should be made available to members of governing boards. “These data help paint a picture that describes the extent to which their campuses are vehicles for economic mobility.”

I concur that the data is useful. The more data, the better. The better informed board members, the better. But Koch and his colleague are making a huge unstated assumption, which they do not acknowledge in their book. That is:

It is the responsibility of individual institutions to become vehicles for economic mobility rather than of state higher-education systems.

Virginia has a higher-education system that is geared to broad swaths of the population. It includes elite or near-elite institutions (W&M, UVa, Virginia Tech); large metropolitan universities such as George Mason University in Northern Virginia, ODU in Hampton Roads, and Virginia Commonwealth University in Richmond; regional rural universities such as Longwood University in Southside, Radford University in Radford, and UVa-Wise in Wise County; historically black colleges and universities (HBCUs) such as Norfolk State University and Virginia State University; and a statewide system of community colleges.

The system serves every Virginian who wants to enter college. It is a preoccupation of modern day university administrators, steeped in egalitarian ideologies, that their individual institutions must serve all segments of the population. To be sure, an institution like W&M or UVa should be welcoming to all races, ethnicities and socio economic classes, and, arguably should aggressively recruit academically qualified members of under-represented groups. But, I would argue, it is not their job to create avenues of economic mobility for academically under-qualified individuals who would displace students — as it happens in Virginia, mostly students of Asian origin — who would benefit more from the challenging academic experience.

Where I would agree with Koch and Cebula, however, is that elite institutions (on average) have increased their tuition, fees and other costs more aggressively than other institutions simply because they can. Their brand names give them the market power to do so. As a consequence, even adjusting for financial aid, the higher costs create an obstacle for lower-income students who otherwise might qualify to attend. For that, governing boards should be called to account.

Koch and Cebula have a lot more to say in their book. University governance is a huge issue. Indeed, with the controversies roiling UVa, W&M, the Virginia Military Institute and Washington & Lee (a private university) here in the Old Dominion, one might suggest that governance issues have never been more important. I will have more to say about Koch’s conclusions in upcoming posts.

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30 responses to “Higher Education and Economic Mobility

  1. It is refreshing to have a study looking at increase in social mobility. That is traditionally one f the functions of education in a democracy. As I have pointed out on this blog before, the publication, Washington Monthly, annually ranks colleges and universities. One of the major factors it uses in its rankings is improvement in social mobility.

  2. All going to be free now, right? That’s what Biden promised? 🙂

    I guess our family income would have put us in the top 40% when I matriculated at W&M, but not much higher. The difference then was my parents had zero college savings and basically funded state U attendance for my brother and me with cash. It was possible to do that 45 years ago. Now the kids and I are saving aggressively in hopes that the next generation can get out without debt, even at a state U. What has happened over the last 20 years is tragic. Self-centered institutional greed with no regard to the long term damage done.

    How Clean Virginia feels about Dominion, that’s what I think these days about UVA, W&M etc…And we can all blame the General Assembly for all of it!

    • Steve, many of us in my class of ’49 needed scholarship help because there were scant outside jobs available in town. My Blow Gym lifeguard job was also a help.

      I had to forgo the frats because dues costs although wished I could have gone SAE.

    • James Wyatt Whitehead V

      “institutional greed” That really sums up this issue for me.

    • You were lucky that your parents funded your college. My parents told my three brothers and me that our choices were to live at home and fund our own tuition (I did get a grant and a NDSL) or figure out how to pay to go to a college outside the Twin Cities. All four of us chose the former.

  3. Why the interest in the socioeconomic distribution of the student populations? Admissions should depend on academic ability. Qualifying students needing financial or academic aid should be given the aid.

  4. Financial aid usually is applied to tuition. There is a lot more included in total cost.

  5. Jim – You’re right on target with this statement. “Virginia has a higher-education system that is geared to broad swaths of the population.” Virginia’s higher education offerings are a virtual smorgasbord schools.

    It is also true that certain elite public universities attract students from higher income families, particularly from out of state. Quite simply, this is the only way to pay the freight. I don’t quibble with Koch’s argument that tuition and mandatory fees have floated up a bit too freely over the last two decades. But I, like you, take issue with the notion that the most competitive public universities must reflect the socio economic demographics of all society. Generally, speaking entrance ought to be based on academic qualifications.

    I’ll be interested in reading Koch’s book to see if he addresses the privatization of public universities. There are huge transfers of monies from high income students to low income students via ever increasing need based aid. That is the private school model. When I was at Virginia Tech, more than $20 million per year was diverted from from tuition to financial aid. Those high income families, over whom Koch despairs, are contributing mightily to the financial aid of low income students.

    I wonder also if Koch addresses the disparity in admissions standards for different races. It is different for blacks, whites, hispanics, and asians. I’ve seen the numbers. It’s real. Granted, all students admitted to the likes of UVA, WM, and Virginia Tech are bright and highly qualified. But there are large variances of the “student quality profile” among each those student sectors.

    • Lawrence Hincker says:

      “But I, like you, take issue with the notion that the most competitive public universities must reflect the socio economic demographics of all society. Generally, speaking entrance ought to be based on academic qualifications.”

      His point, and Jim Bacon’s too, is extremely important. College admissions should, indeed must, be based strictly on academic qualifications (incl. achievement, preparation, and academic talent) so as to best match to student to the school for the maximum benefit of both. This is the ONLY way to best assure that the student in question, and school’s other students, all have the best change to gain maximum benefit in and outside the classroom, and best chance to succeed post college.

      Without this academic match up, huge problems far too often arise, an all suffer far beyond the individual preferred student. This has been proven over and over again by studies and practice.

      Preferences do not work and preferences typically do enormous harm, whether they be racial or otherwise, because they admit kids who are academically unqualified into schools wherein they most likely cannot academically succeed, so are set up to fail in school and life.

      The results of the preferences have been catastrophic. That enormous damage is plain to see everywhere around us, all these angry kids.

      Here is why – When elite colleges admit kids who are really qualified only to attend select colleges, not only is the preferred kid far more likely fail in the elite college and in later life, the select colleges also lose their proper pool of disadvantaged kids who would have succeed there had they attended. And instead the select school will be forced to take “preference kids” who should in fact be going to third tier colleges. So now, ever more and more preference kids in elite, select, and open admission colleges are bound to fail, up and down the line.

      This ongoing debacle caused by ill founded preference polices explains much of the racial tension, anger, and anxiety now roils on American college campuses, and spills out into our streets.

      See my post at:
      https://www.baconsrebellion.com/wp/re-examining-the-role-of-elite-higher-ed-in-american-society/

  6. UVa students graduate and make more than twice the national median income after 10 years. Why not lend them the money at low interest rates? Their parents may be poor but they won’t be.

    https://www.collegesimply.com/colleges/virginia/university-of-virginia-main-campus/outcomes/

  7. Baconator with extra cheese

    As we see the diversity initiatives are based on skin color…. not economic circumstances.
    How about a couple of millions more for investigations Dr Governor Coonman?

  8. Do elite universities provide economic mobility because they give underprivileged students the academic/technical skillsets needed for success?

    Or, do elite universities provide economic mobility because they give underprivileged students access to elite networking infrastructure/visibility for major employers?

    Anecdotally, it’s the latter case that predominates. The song-and-dance routine performed by the Ivies and Public Ivies regarding diversity is one part sincerity and three parts cover for the simple fact that: the power of elite institutions hinges to a great degree on social exclusivity. Too much solute is ideally a supersaturation, but often, stakeholders worry about the good stuff falling out of solution altogether. And, you get some truly horrific alienation of non-elite kids to boot — the four-year graduation rates for students from low-income homes at these schools are abysmal, and it usually has nothing to do with the financial burden. This podcast interview of a Harvard student is quite good on the subject. https://palladiummag.com/2020/07/31/palladium-podcast-ep-39-saffron-huang-on-new-elite-education/

    Since it’s hard to suss out workable recruitment pools for promising devs and management when everyone has good grades and a four-year from a decent school, the real elite winnowing comes comes at the MS/MA stage. Those few underprivileged who haven’t dropped out of the rat race by then are either true talents or successfully integrated into effective patronage networks, so either way, it tends to be a win for those involved in corporate recruitment cycles. Certainly not a win for any family’s pocketbook, however.

    Outside of serious sink-or-swim programs like Harvard/Stanford CS or Berkeley/UM biochem which really do optimize for capability and little else, promising kids from non-elite backgrounds are probably better set up for future success going to a well-resourced state school, and then leveraging their success there into further degrees or employment. Virginia’s mid-tier state schools are actually pretty good at this, IME. I know more successful Mason CS and JMU/ODU business alumni than from any other school in the state, though this may be exposure bias talking.

    • Why or? And why do you think they are they different in any serious way?

      • Essentially: the rhetoric around higher education and positive life outcomes features significant code-switching between “elite schools teach well” and “elite schools network well,” and I’m trying to disambiguate those two concepts in the above comment. Put simply: the real value of an elite education is the networking, and disadvantaged students will always be at a disadvantage to those from wealthier families in that regard. Trying to make elite schools demographically representative of the country is often self-defeating, because the network effects of putting a bunch of people with elite backgrounds together on a campus is the real value of an elite institution.

        The calculus changes on the STEM side b/c you’re dealing with a tighter labor market and a greater need for specific technical competencies which can only be taught, not received through osmosis during front-porch hangouts with Taggart and Ajay. If we’re to optimize for economic mobility, this should be the focus of our efforts.

        • I would say ‘more exclusive’ networking… ain’t that many with money anymore, although those with it have more of it.

          • I should probably clarify what I mean by “elites” — I’m not talking about soap brand heirs etc., but rather the upper 10-15% of households by income, whose scions almost without fail go on to populate the upper ranks of the federal civil service, major corps, and the licensed classes of medical and legal professionals. These folks are more likely to drive Toyotas than Bentleys, but by profession, social sensibilities, and life outcomes they are our “elite.”

            Participation in the lifelong home-car-school debt cycle is pretty ubiquitous at this point, so I think questions of “Where the moneyed folks at?” nowadays should be less asset-based and more driven by a household’s yearly earning/spending potential. As you say, truly wealthy people are pretty thin on the ground, and thus not a great group to analyze re: what American class relations really look like in 2020.

            Maybe “bourgeoisie” is more descriptive, but that’s a pretty loaded phrase for the BR audience.

        • I think you miss an important point. Elite schools require high grades and good test scores to get in. The high grades generally show a propensity to work hard and the high test scores show a natural intelligence. In other words, they are starting with good raw material. In the case of a student from the “bottom 60% of income distribution” who got into the elite school on his or her academic merits – you are most likely to see upward mobility.

          As for the elites of society networking – that is absolutely true. If you work long enough in Big Tech you’ll eventually be told by the CEO (or one of her minions) to interview a generally unqualified candidate because the candidate’s Mommy or Daddy works for a company that is a customer or could be a customer. You realize that the decision to hire the candidate was made at a golf tournament or on a sailboat and you’re just filing out the paperwork.

          • And if you work for even a year in Big Tech you’ll go through annual ethics training where it’s made clear (among other things) that hiring someone because their Mommy or Daddy works for a company that is or could be a customer is a violation of the ethics rules
            (The “Business Conduct Guidelines”)

            I think this exact scenario was used in last year’s training as an example of conduct that is against (Big Tech Company’s) ethical standards.

          • In fact it’s right here:

            “Employment and Internships: Never promise or provide employment or internships for the purpose of obtaining a business advantage or other preferential treatment for IBM. Hiring must be done in accordance with applicable IBM Human Resources policies and processes. ”

            Page 34.

            https://www.ibm.com/investor/att/pdf/BCG_English_Accessible_2018.pdf

          • Reed Fawell 3rd

            How’s that work regarding the color of a person’s skin?

            “Hiring must be done in accordance with applicable IBM Human Resources policies and processes,” anyone get the shaft based on their skin color alone?

          • “In the case of a student from the ‘bottom 60% of income distribution’ who got into the elite school on his or her academic merits – you are most likely to see upward mobility.”

            I don’t dispute that grades or test results track with natural intelligence, but rather that elite schools on balance are a good fit for a median “gifted but economically disadvantaged student.” The ones who graduate in 4-5 years will see success, but a tremendous percentage of this demographic just wash out as freshmen/sophomores due to social and academic pressures they are unused to. It’s not that they lack the capacity to succeed, but rather that their peers have been living and breathing that rarified, five-activities-a-day air for the past decade. The students we’re focusing on haven’t, and you can’t stand up the requisite guidance infrastructure/social and academic support for disadvantaged students without diluting the nature of “elite schools” into incoherency.

            If the goal is to provide upward mobility for underprivileged young adults, there are ways to do this which route around elite institutions. That’s what I’m trying to get at.

    • It’s not what you know, it’s who you know. This is especially true in the DC area.

    • I’ve heard your argument about mid-tier schools a number of times. Too bad it’s largely ignored. But the goal of many on the left is to stir the pot and not actually help students.

      But then, the left is celebrating the election of an open religious bigot to the vice presidency.

  9. Is this due to inherit greed, or is it due to the government enabled greed? Cheap & easy money, in this case available through the Federal Student Loan Program, will drive up prices.

  10. I dunno, but I think there is too much emphasis on upward and not enough on mobility. Yeah, upward is great, but the ability to change careers willingly is really a bonus of a college education. Sucks to have a plant close and realize that running a widget punching machine is all you have done for 15 years.

    Of my doctors over the last 50 years, 3 began as engineers – one of whom came from money. Of those 3, none practiced for more than 10 years. One entered hospital administration (is the top dog at a local hospital group), one moved home to NC where, last I heard, he teaches at a medical school and the 3rd retired from VDH administration.

    I say that I’ve been lucky, but I know that I had a joyful career, except for 3 years, because I could, and did, move from one job to another at will.

    The value of the education ain’t the money. It’s the freedom.

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