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Colleges Devalue Their Competition

We are only a few weeks away from spring – or, as the parents of many high schoolers think of it, “test season.”

The Wall Street Journal recently reported that more than 2.6 million high school students sat for Advanced Placement, or AP, exams in the 2015-16 academic year. That number represents a 5 percent increase from the test cycle prior. The College Board, which also administers the SAT, offers tests in over 30 subjects, and in many high schools, “AP” is the default for the most advanced version of a particular course offering. Some students in their junior or senior years could easily sit for five or six tests this May.

Certain students would always take the most ambitious courses, whether to challenge themselves, beef up their college applications or both. But the reason that many parents are willing to pony up $93 per exam is the promise of a return on investment in the form of college credit. Many colleges and universities not only offer entry to higher-level courses or waive basic requirements, but assign some number of credit hours for a score demonstrating that the student has mastered college-level work. While $93 per test is not pocket change, it is much cheaper than taking the equivalent college course practically anywhere.

Individual institutions, not the College Board, determine how they will recognize incoming students’ work on the AP exam. Public universities in 20 states are required to grant credit for high scores, with the stated goal of allowing students to graduate more quickly. But in a trend that has been growing recently, some schools – mainly top-tier private institutions – are pushing back.

Dartmouth made waves in 2013 by abruptly announcing that, while high-scoring AP students may still place out of introductory requirements, they will no longer receive actual college credit for their work. In justifying their decision, Dartmouth administrators pointed to research suggesting that students who did well on the AP psychology exam were not effectively equivalent to those who had actually taken introductory psychology on campus. They also said that most Dartmouth students who brought in AP credit were not graduating early anyway.

The University of Pennsylvania offers credit for AP scores only in some departments, and the same is true of Columbia. Brown does not offer course credit at all. This spring, Trinity College at Duke University may also jettison the practice of letting students use AP credit for two of the 34 course credits required to graduate.

The trend toward selective colleges choosing not to offer course credit for AP scores is not new. But as increasing numbers of students sit for the exams, the impact will grow.

It is hardly a surprise that some colleges are trying to cut down on the financial competition from AP classes, now that high school classes are often smaller, competition for new students (especially for “yield”) is higher, and families are more conscious about limiting the debt they incur for such goodies as textbooks, student activity fees and survey courses in the humanities.

Schools like Dartmouth and Penn can get away with axing course credit for AP work, at least for now, mainly because there are enough parents and students who can’t see past the Ivy. I would expect other schools that try to follow suit to face pushback, probably at pretty healthy levels. While research from the College Board itself should be taken with a grain of salt, it does not seem outrageous that nearly half of students sitting for AP exams who were surveyed said they would be less likely to apply to a school that wouldn’t give them course credit, and nearly three-quarters said they considered schools’ AP credit policies when making enrollment decisions.

Schools considering taking Dartmouth’s lead might want to take a look at what happened to Verizon, which brought back unlimited data plans this week thanks to competition from other, hungrier cell providers. Colleges that offer usable credit for AP classes will have a strong leg up on competition for the sort of students who take a lot of AP classes. These are the same students who tend to raise a school’s place in the college rankings.

But the underlying problem, as I have written before, is that in a world where a degree past high school is an economic necessity, the college industry decides all on its own what college should be and what it should cost. You don’t get runaway trains without a locomotive. College accreditation bodies are the engine that have pulled higher education costs ahead at breakneck speeds for the past half-century.

It is time for a new education model suited to the needs of the current century. Accreditation of college programs and degrees ought to be removed, or at least second-sourced, to politically accountable, government-run or sponsored bodies. And what we now call high school should be expanded by a year or two and incorporate enough college-level courses (we might want to stop calling them “AP”) to ensure that students who pass such a program have the science, math, business and critical thinking skills to function at most hourly and nonstrategic salaried management positions in today’s economy, as well as their increasingly important freelance equivalents. Such degrees ideally should be sufficient for acceptance into most graduate-level professional training programs, including schools of business, law, medicine and pharmacy. And of course, traditional colleges should vastly expand online offerings that do not require participants to leave their homes and communities at all.

Students who want the “college experience” will always have the option of spending four years on a campus, attending Greek and tailgate parties, being taught by tenured professors (or their aspirants) to think politically correct thoughts and encouraged to look down on those who choose the freely available secondary education route to grad school. There will always be a path in life for those whose passion is the arts and letters, who love history (I count myself one of them) and who want – and can afford – what four on-campus years offers. It simply should not be the only path the education community, responsive first and foremost to its own needs, allows.

Larry M. Elkin is the founder and president of Palisades Hudson, and is based out of Palisades Hudson’s Fort Lauderdale, Florida headquarters. He wrote several of the chapters in the firm’s recently updated book, The High Achiever’s Guide To Wealth. His contributions include Chapter 1, “Anyone Can Achieve Wealth,” and Chapter 19, “Assisting Aging Parents.” Larry was also among the authors of the firm’s previous book Looking Ahead: Life, Family, Wealth and Business After 55.

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2 Responses to "Colleges Devalue Their Competition"

  • Mark Scheffler
    February 22, 2017 - 6:30 pm

    So that I know that you are not a hypocrite, please advise what are the educational backgrounds of your most recent hires. Your generalization of the reasons why someone might want a “college experience” is a little offensive.

  • Larry Elkin
    February 23, 2017 - 12:03 pm

    Mark, the educational background of most of our staff is available in the About Us/Our Team section of our website. While we don’t post their transcripts, I can confidently say that many if not most of our hires have taken advantage of AP classes, sometimes to graduate early or otherwise reduce costs. Come to think of it, so did I, a very long time ago. The dollar amounts were much smaller back then but the money saved was important to me at the time.

    If my working career lasts long enough and the system changes quickly enough, I may someday have a chance to hire an accounting graduate who is eligible to take the CPA exam without five years of on-campus credit as currently required in most jurisdictions. If that happens I hope I won’t let either of us down.