Property Grunt

Friday, April 04, 2008

Somewhere in Scarsdale, a guidance counselor is running from a gang of angry parents.

It just doesn't matter how much money you pay in school taxes.

From the New York Times.

April 1, 2008
Elite Colleges Reporting Record Lows in Admission
The already crazed competition for admission to the nation’s most prestigious universities and colleges became even more intense this year, with many logging record low acceptance rates.

Harvard College, for example, offered admission to only 7.1 percent of the 27,462 high school seniors who applied — or, put another way, it rejected 93 of every 100 applicants, many with extraordinary achievements, like a perfect score on one of the SAT exams. Yale College accepted 8.3 percent of its 22,813 applicants. Both rates were records.

Columbia College admitted 8.7 percent of its applicants, Brown University and Dartmouth College 13 percent, and Bowdoin College and Georgetown University 18 percent — also records.

“We love the people we admitted, but we also love a very large number of the people who we were not able to admit,” said William R. Fitzsimmons, dean of admissions and financial aid at Harvard College.

Some colleges said they placed more students on their waiting lists than in recent years, in part because of uncertainty over how many admitted students would decide to enroll. Harvard and Princeton stopped accepting students through early admission this academic year; that meant that more than 1,500 students who would have been admitted in December were likely to have applied to many elite schools in the regular round.
Many factors contributed to the tightening of the competition at the most selective colleges, admissions deans and high school counselors said, among them demographics. The number of high school graduates in the nation has grown each year over the last decade and a half, though demographers project that the figure will peak this year or next, which might reduce the competition a little.

Other factors were the ease of online applications, expanded financial aid packages, aggressive recruiting of a broader range of young people, and ambitious students’ applying to ever more colleges.

The eight Ivy League colleges mailed acceptance and rejection letters on Monday to tens of thousands of applicants. Students could learn the fate of their applications online beginning at 5 p.m. on Monday, so three of the colleges said they were not ready to make public their admissions data. But the expectation was that they would also turn out to have been more competitive than ever.

“For the schools that are perceived to have the most competitive admissions processes, there has been this persistent rise in applications,” said Jeffrey Brenzel, dean of undergraduate admissions at Yale.

Ten years ago, slightly fewer than 12,000 students applied to Yale, compared with the 22,813 who applied this year, Mr. Brenzel said. Yale’s admittance rate — the proportion of applicants offered admission — was nearly 18 percent in 1998, more than double the rate this year.

“We’re really happy with the class,” Mr. Brenzel said of the students offered admission. “On a day like today it’s also easy to be aware of the incredible number of fantastic students who you have to turn away, because you know they would be successful here.”

At Harvard, as at Yale, the applicant pool included an extraordinary number of academically gifted students. More than 2,500 of Harvard’s 27,462 applicants scored a perfect 800 on the SAT critical reading test, and 3,300 had 800 scores on the SAT math exam. More than 3,300 were ranked first in their high school class.

Admissions deans and high school guidance counselors said they spent hours at this time of year reminding students who had been put on waiting lists or rejected entirely that there were other excellent colleges on their lists — and that rejection was often about the overwhelming numbers, rather than their merits as individuals.

“I know why it matters so much, and I also don’t understand why it matters so much,” said William M. Shain, dean of admissions and financial aid at Bowdoin. “Where we went to college does not set us up for success or keep us away from it.”

In a previous entry I have stated the mantra of real estate, which is location location location. However the mantra in the suburbs is location, location, school system. Some families of FIRE often decide to set up base camps in the suburbs for more space, clean air and solitude. But the biggest draw are the school systems, particularly in Westchester that are comparable to private schools like Phillips Exeter. This is due to the fact that parents blow wads of tax money so their kids can get the best education possible. But what really gives those kids an edge during the college admissions process is the brand name these school offers. You have to think of these schools as bonds and the colleges want to go for ones that have triple A ratings

The article presents valid reasons why admissions have been so low however the major reason is this man.

His name is David Swensen and he is either your savior or your worst nightmare depending on who you are or where you live. Colleges and Universities are no different than any other business. They need a cash flow to get things running. When the Ivy Leagues accept students from areas like Scarsdale, they are at least guaranteed that the student’s parents will be able to fund their education and at least academically these students are able to enrich themselves from the environment the college offers.

However there has been a reversal of fortune in the academic world that started with some radical changes. It first began when Harvard abolishing early admissions which was considered the holy grail of all high school seniors shooting for crimson glory then Princeton followed. Then Stanford instituted a new policy offering free tuition for student families that earned less than $100,000.

It is because of people like David Swensen that these Ivy League institutions like Yale and Harvard are able to take these actions.

Through savvy investing and a mentality that eschews irrational exuberance, these colleges have gotten massive returns on their investments even during these turbulent times which has been harnessed into some rather impressive endowments. This surplus of cash has allowed them to be able to pick and choose not only for the best of the best but to also take risks on applicants that that have the academic chops but not the funds to pursue a Class A education. In other words, no matter how elite your school system, you have to take your chances with the rest of the proletariat.

Guidance counselors all over the country are dropping a collective load in their pants, especially the ones who work in prominent high schools. This is because there is a mob of angry parents who paid through the nose not only for schools but for tutors and other extra curricular pursuits for their children and it has resulted in diddley squat. These parents are going to demand answers of why the fruits of their labor spawned a barren crop.

I firmly believe that this will have a huge impact on the suburban real estate market particularly areas that are considered to be the optimal choices to get your kids into a good college. People are going to question whether it is really worth it spending all that money on an educational system that no longer gives their children the edge to get into the hallowed ivory halls. This could be a windfall for some communities and this could be the kiss of death for others.

A while ago 60 Minutes did a piece on the college system in Texas, which provided an easier application process for students who came from poorer. When that happened, a significant percentage of people moved from their rich towns to poorer ones in order to get that edge for their kids.

If colleges continue the trend of widening their applicant pool to less prominent areas, I would not be surprised to see what happened in Texas occur in Westchester. In fact just from an anecdotal perspective I know of some people with very successful jobs who have decided to lay down roots in fringe areas of Westchester due to the cheaper costs.

Entitlement has taken a huge hit. Just because your parents make a ton of dough and you went to one of the top rated high schools in the country doesn't mean you have any leverage in the admissions process. With elite colleges brimming with cash, they have become emboldened to find applicants that have shown great promise despite the fact they do not have the academic support that their rich counterparts have been able to acquire.

Some may construe this as a big f**k you from the academic world. However I think college admissions are just putting everyone on notice with the following message.