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Rich Colleges Are Getting Richer. Why That's a Problem

This growing inequality has three dimensions.

America’s colleges are, in short, more unequal today than at any time in the last four decades.

America’s colleges are, in short, more unequal today than at any time in the last four decades.

This week high school seniors across the country are opening texts and emails from colleges informing them whether they have been accepted or rejected for admission. Few events in their young lives will be more significant for shaping their life prospects.

These electronic messages are the culmination of a massive matching process, one that uses copious data on students to assign the most accomplished applicants to the nation’s most selective colleges.

One might suppose this should be an occasion for national celebration, at having a higher education system, envied around the world, which rewards merit above all. But many worry that, instead of being a vehicle of equal opportunity, this ostensibly meritocratic system actually serves to perpetuate, even solidify, inequality.

To explore this concern, I gathered data on America’s four-year colleges stretching over a period of several decades. What I discovered was a collection of colleges, already demonstrably unequal in 1970, which became even more unequal since then.

This growing inequality has three dimensions.

First, the matching process became more efficient. Relying increasingly on documentable achievements, among them grades, test scores, and noteworthy activities, the top colleges got better and better at identifying the nation’s best students. A way to see this and other trends is to compare students who enrolled in the most selective, highest-SAT private colleges with those who enrolled in less selective public institutions with below-average SATs. 

Students entering the most selective private colleges, not surprisingly, reported having better grades in high school. In 1990 they were 34 percentage points more likely to have had A or A+ averages in high school, compared to those entering the less selective public institutions. But over the following two decades this gap ballooned. By 2009 it was 43 points. 

Likewise, the gap in reported study time between students at these two sets of colleges also grew larger over time, from about five and a quarter hours a week in 1990 to six and a half hours a week in 2009. With increasing efficiency, the college matching process was identifying and segregating the studious high-achievers from everybody else. 


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The second dimension of the growing inequality of colleges was an ironic effect of the rise in income inequality. The extraordinary growth in incomes of affluent families after 1980 spurred donations to already rich private colleges. Fueled by rising stock prices, endowments and spending at the richest institutions soared. In 1990 spending per student in the highly selective private group of colleges was 3.3 times that in the less selective publics. By 2013 that ratio had climbed to 4.3.

One manifestation of this inequality dividend is a construction boom at many of the richest private colleges. Yale just completed two new residential colleges, spending a reported half billion dollars. Notre Dame added three new buildings for $400 million, and Duke renovated a dining hall for $90 million.

Programmatically, inequality intensified as well. The richest private colleges could deepen their commitment to the liberal arts and small classes, while less selective colleges increasingly turned to occupation-related majors to attract students.

The third aspect of growing inequality of colleges is in the socioeconomic background of students. Most noticeable is the divergence in average family incomes. The gap in inflation-adjusted family income for students at the most selective private and those at the less selective public institutions, for example, increased from $95,000 in 1990 to $105,000 in 2009. 

America’s colleges are, in short, more unequal today than at any time in the last four decades. At the top are very rich colleges of undeniable excellence. While they are more ethnically diverse than ever, these colleges are also enrolling a disproportionate share of the nation’s affluent families.

To counter these trends colleges need to reexamine the common practice of giving admission preferences to children of alumni. They also should consider setting aside more scholarship money for first-generation students.

But to accomplish very much in aggregate will require public policies designed to level the playing field. Were it not for the relief it gave to the richest taxpayers, the recent tax cut bill would have provided a little nudge toward equality, through its new levies on highly compensated employees and on a few institutions with large endowments. Leaning more forcefully against the forces of inequality will require much more. 

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Charles T. Clotfelter

Charles T. Clotfelter is an economist and the Z. Smith Reynolds Professor of Public Policy Studies and Professor of Economics and Law at the Sanford School of Public Policy at Duke University in Durham, North Carolina.

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