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An Overdue Look At College Admissions Collusion

busy college fair photographed from above
College fair in 2014, hosted by College of DuPage and District 502 High Schools. Photo courtesy the COD Newsroom.

Readers who have followed “Current Commentary” for some time know that I do not hesitate to cry foul on overreaching antitrust actions in this space.

I have criticized such actions against Google, major airlines and mobile providers. I’ve often found that regulators and administration agencies overreach when determining what business practices go too far. So you might also expect me to look askance at the news that the Justice Department opened an investigation into whether the National Association for College Admission Counseling’s ethics code violates antitrust law.

In this instance, however, there is a major difference at play. American colleges and universities actually do engage in a broad array of anti-competitive practices, making the Justice Department’s action both justified and, in my opinion, long overdue.

Sen. Marco Rubio, R-Fla., once referred to colleges and universities as a “cartel,” a descriptor that they have done much to earn. He was specifically discussing accreditation – a pressing issue, though not the one the Justice Department is currently considering – but the characterization holds in a wider consideration of their practices. Colleges have lost the benefit of the doubt where student welfare is concerned based on everything from sharing outstanding financial aid offers with one another (as Ivy League institutions did until a Justice Department investigation put a stop to it in 1991) to refusing to let students use Advanced Placement credits to defray tuition costs and graduate early.

The National Association for College Admission Counseling’s so-called ethics code purports to protect the interests of colleges, high schools and students. This itself is problematic, since the interests of these three groups conflict in some ways, and only one of those groups – guess which one – is involved in writing the code. Moreover, schools that don’t abide by the rules in the ethics code may face serious sanctions, including exclusion from NACAC’s popular recruitment fairs. So schools are encouraged to treat one another “fairly” by adopting widespread rules about how admission processes should run.

As Naomi Schaefer Riley observed in an opinion column for The Wall Street Journal, “Schools that are supposed to be wholly independent agree on when students can submit applications, when admissions officers must inform them of a decision (including a financial-aid offer), when students must accept or decline the offer, and when to let students off the waiting list.” These practices are long-established, but that does not mean that they are in students’ best interest.

For instance, schools face restrictions on how they can woo prospective students, limiting competition that could lead to better deals on tuition or other benefits that might entice applicants. Some administrators also suggest that NACAC’s code can serve as a bludgeon against schools that adopt policies rival institutions dislike.

Jon Boeckenstedt, the associate vice president for enrollment management and marketing at DePaul University, told The Chronicle of Higher Education that he thinks the code has become too specific and restricting. “If a college wanted to say, ‘Apply by August 1 and get everything out of the way before your senior year,’ there’s a percentage of the population that would be thrilled not to have to go through the pain of applying during their senior year,” Boeckenstedt observed. “Why shouldn’t they be able to?”

Similarly, colleges might wish to push back against rigid early decision rules or extend some flexibility about decision day (currently May 1 across the board). The existing code tries to make sure that no college has an “unfair” advantage over another, but competing to win customers – in this case prospective students – is exactly what actors in a healthy marketplace should do.

With luck, the Justice Department will break up this real, and facially harmful, collusion. In the ensuing scramble, it is prospective students who stand to benefit – exactly what the NACAC says it wants.

Terrific. Scrap the code, and tell colleges to set their admission practices and standards for themselves. Then let students and parents apply where they think they get the best treatment and the best deal. When it comes to “ethics” in admissions, these are the only goals that matter.

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, Looking Ahead: Life, Family, Wealth and Business After 55. His contributions include Chapter 1, “Looking Ahead When Youth Is Behind Us,” and Chapter 4, “The Family Business.” Larry was also among the authors of the firm’s book The High Achiever’s Guide To Wealth.

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