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The Bizarre, Scary Economics of the College Admission Scam

The 'Varsity Blues' college admissions scam involved rich parents paying to get kids into elite schools. There's a reason they did it and it's not that they're dumb.

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Actresses Felicity Huffman and Lori Loughlin were two of 33 parents indicted by federal authorities in a massive college admissions scandal on Tuesday. They and other wealthy parents stand accused of committing fraud to get their kids into high profile schools by cheating on SAT and ACT tests, paying for “guaranteed” admissions and passing inexperienced children off as elite athletes. But knee-jerk hot take that the accused parents are status-obsessed and foolish, which was published in various forms by countless publications in the hours after the scandal broke, is itself silly. Dismissing what these parents did as merely contemptible obscures a harsh reality facing rich and poor parents alike: College has become the only path to success. And in an increasingly competitive and bifurcated economy, even the rich are feeling the pressure to ensure a future for their kids.

There is a really good reason that parents would go to such great lengths to ensure their kids received admission to a high-status university. According to a recent article in the Harvard Business Review, students who graduate with a four-year college degree earn 168 percent more than those with just a high school diploma. Students who graduate from Harvard with a four-year degree do considerably better. Given that, the $1.2 million spent by one indicted parent passing off his daughter as an elite soccer player looks like a solid investment. Over a lifetime of earning, the numbers add up.

Say what you will about the wealthy, many of them are good at math. America’s elite has long understood paying for sure-thing college admissions is a solid investment. Their gifts to universities are part of a long game — a game they seem to be winning. From that perspective, the scam was a steal. The parents were able to pay less than they might have had to pump into schools’ endowments and receive a guarantee of admittance.

Buying college admission is ugly, but it often works out fairly well for the students who wind up enrolled. Presidential son-in-law and adviser Jared Kushner is the poster child for this. He went to Harvard in 1998 despite the fact that his GPA and test scores did not merit admission according to officials from his private New Jersey high school. Why did he get in? His father Charles Kushner, a criminal, made a $2.5 million donation. Kushner has touted his degree as a qualification for a job handed to him by his father-in-law, which sounds … vaguely plausible. And that’s good enough when nepotism is the name of the game.

Here’s why most parents should see the scandal as a cause for concern. As the top earners continue to be those who have a college education, the middle-income earners face more competition for fewer spaces. After all, it’s the only path left for parents to make sure their kids might be better off than they are. But without millions of dollars to game the system, middle-class parents are investing time, energy, and money they do not have. They are running up debts.

This is all to say that regardless of whether Felicity Huffman, Lori Loughlin, and 33 other parents are convicted, they should be viewed with contempt by fellow parents as not just bad actors, but representatives of a deeply flawed and amoral system.

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