The Prestige Racket | Hacker News Reader

The Prestige Racket

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51 pointsnajirama22 comments

“Some 40 percent of students pay list price,” Trachtenberg says. “These are people from wealthy families; I have no compunction about charging them list price. They can afford it.” But the school’s financial aid numbers make it clear that the picture is a little more complicated.

It doesn't outright say so, but it seems that Trachtenberg is relying on the canard that students attending on loans are not actually paying full price, which is absurd.

I actually had a college send me an embossed certificate in the mail awarding me a "Faculty of Arts and Sciences Scholarship." It was a low-interest loan. I felt like they were making fun of me. It was humiliating. I really wanted to go to that school, and it was like getting an embossed "Fuck you" in the mail.

Isn't a loan at below-market rates equivalent to free money?

Oh, yay, I would have got a few percent off the list price that I was 70% away from affording.

They could have given me that money up-front, right? Only that would have been too honest. The fact that they called a loan a "scholarship" is all you need to know about how much respect they had for kids' understanding. They rely on kids not knowing what it's like to pay off loans. Or on kids wanting to cash in on their degree after college, which I had no desire to do.

I don't get it. Unless the total cost of college was more than you're planning to make over your entire career (which I doubt) then how are you 70% away from affording it?

Being able to pay for something eventually is not a reasonable way to decide what you can afford. Try a mortgage calculator and see how much you can "afford" by that definition. It's insane. Nobody should dedicate half their life to paying off college unless the whole purpose of college for them is to land a high-paying job afterwards. $120k (fifteen years ago) might be a reasonable fee for meeting a bunch of rich people and getting insane management or banking job offers afterwards, but I wasn't interested in that.

Fair enough, but it still seems to fall into the category of "more than I'm willing to pay" rather than "more than I can afford".

That's the wrong calculation. What you need to compare is the total cost of college + any expected premium from that attendance, with the opportunity cost - the next best thing you could be doing with that time.

In software, especially in the US, the calculation is not obviously in favour of college attendance for motivated autodidacts: the cost of attending is very high compared with the subsidized rates in other countries, while you can get experience cheaply by building things others use, and leverage that into a startup or job offers. Meanwhile, one of the key advantages for having a degree in a software-related discipline outside the US is that it makes getting a US visa far easier. But if you're already in the US (legally etc.), that doesn't apply.

If you have complete discretion about how to spend it, yes. On the other hand a low interest loan from an institution which can only be spent on tuition and fees, generates additional revenue for the institution in the form of interest or sale of the debt.

The homebuilding industry figured that out a long time ago.

This is interesting:

GW students’ average SAT scores increased by 200 points

So, this strategy really did improve the quality of the school, it wasn't merely perception.

perhaps more affluent students have more time and money to spend on SAT prep material and classes, and thus have higher averages?

(On the flip side, and to agree with you, I think the strength of a school is really tied to the strength of the students, since it's one's peers that make a great educational experience, IMHO. Any strategy that gets a school to climb the rankings will likely get the school more ambitious applicants.)

Or, perhaps more affluent students are smarter, more conscientious and better prepared for academic work on average, and thus have higher average test scores?

I don't know why everyone assumes that children of the affluent get high SAT scores due solely to test prep. If that were the case, you would expect them to underperform once they reach college, which doesn't occur as far as I know.

Incidentally, at least according to one independent study (as opposed to a study by Kaplan), test prep doesn't help much (30 points on the old 1600 point SAT).

http://online.wsj.com/article/SB124278685697537839.html

Did you just relate native intelligence to parental income level?

Why is this so controversial?

http://infutik.mtk.ut.ee/~jaan_m.ri/work_labour/Strenze_2007...

The paper you linked has the words "A meta-analytic review of longitudinal research." in its title so I stopped reading. If you want to summarize, I'll take your word for it.

It's controversial because it could be used to justify a number of racial or eugenic policies, and because it's sort of silly, in the melting pot of America, and with our knowledge of intelligence, to make any claims on social classes having stratified into different classes of human within the space of a few generations.

I picked it because it has the title "A meta-analytic review of longitudinal research". Meta-analyses are often a good way to summarize existing results in a field and get a quick overview of the actual data that's been produced. They tend to be less biased than cherry-picking an individual study, though it's impossible to eliminate all bias altogether.

The 5000-feet summary of the paper's results was that there is widespread consensus that there is a correlation between intelligence and education/occupation/income levels, but there are divergent results as to the magnitude of that correlation, ranging from .15 to .40 (a correlation of 0 indicates that the two variables are completely uncorrelated, 1.0 indicates they are completely dependent).

"It's controversial because it could be used to justify a number of racial or eugenic policies, and because it's sort of silly, in the melting pot of America, and with our knowledge of intelligence, to make any claims on social classes having stratified into different classes of human within the space of a few generations."

This is not how facts work. Something is true or false regardless of whether we like it, and regardless of the implications of its truth or falsehood. This is usually called the is-ought problem:

http://en.wikipedia.org/wiki/Is-ought_problem

A statement about how the world is - say, intelligence is correlated with income - is very different from a statement about how the world ought to be - say, that smart people ought to make more money than dumb people. It's very possible to believe the former and reject the latter. But your rejection of the latter has no bearing on the truth of the former: just because you don't like the conclusions that other people draw from a statement like "income and intelligence are highly correlated" doesn't make it untrue.

Sigh.

Ok, Mr. Social Darwinist. Keep taking your medium-weak correlative effect and calling it a "fact".

On correlative effects. NFC winning the super bowl leads to an increase of the stock market the following year, with a predictive power of 80%, or .8 by your notation: http://www.snopes.com/business/bank/superbowl.asp. Obviously this has weaker causal power than genetic inheritance, which likely has some. But the numbers don't bear that out. Any presumption that rich parents means smart kid is exactly that.

If you're treating a weak correlative effect as a fact, you're the one engaging in the wrong side of the "is-ought" argument, and you're doing it to invoke "ought" on a particularly noxious view, to boot.

Intelligence is both heritable and correlated with wealth. So yes, parental intelligence can cause both wealth and child intelligence, leading to a correlation between parental wealth and child intelligence.

Genetic determinism isn't so clear, unfortunately. Humans having two legs is highly genetically determined, but that doesn't mean that variance in the number of legs is explained by genes; it's more likely to be environmental factors, like injuries.

Another factor is reversion to the mean. Two bright people are likely to have children dumber than them.

He said correlation, not determinism. It's quite possible for wealthy parents to have smart children on average and yet for any given child of smart parents to be spectacularly dumb. (I know a couple myself, FWIW.)

Something with two legs is far more likely to be human than insect, for example, even if you do have the odd human with only one leg.

I didn't say it was genetically determined, I said it was heritable.

Regression to the mean occurs if the two bright people were bright by chance. This is not necessarily the case.

Yes, I really doubt it's possible to increase a school's prestige without also increasing its quality. More prestigious schools inevitably attract a better quality of student and a better quality of professor.

All schools are constantly jockeying for prestige and the quality comes with it. Calling it a "racket" hardly seems fair.

Prediction on Higher Education (a couple of years from now):

Students no longer drive to class early in the morning. Nor do students have to work around class schedules. Instead, students view prerecorded lectures from their laptops/I-Phones. Gone are the days of live teachers and live students.

These video lectures were recorded many years ago. The university pays the original "recorded" professor a small royalty for each class. This royalty fee costs a fraction of a live lecture. This allows the university to pay for a top notch professor to lecture/record one semester, then reuse that recorded lecture in subsequent semesters. One-time cost.

Student questions are posted to message boards which a professor actively monitors and responds to. Students never ask the same question twice since all previous questions are searchable online. Professor responsiveness is very quick (usually in 1-2 hours). The professor answering questions is a full time professor (which may not be the same person as the original recorded professor). This full-time professor is able to handle four times as many classes due to automation etc.

The need for college dorms is marginalized since they are no longer necessary. Because of this, dormitories with excess capacity are demolished since their operating costs are fixed and become a resource drain if not filled to capacity. OR, students get single rooms all to themselves!

Tuition prices plummet due to a surplus of pre-recorded lectures on the market. New industries develop that specialize in creating top-notch video lectures for colleges and handling student questions on message boards (24/7 rapid response student support). Local colleges contract with these new companies (again at significantly lower costs).

International students also benefit (lower tuition/more accessible classes etc). The reach of the US education system now permeates every continent. This has other benefits to their local economies with a higher skilled workforce. Traveling to the US for one semester may be required (for lab classes which require a live teacher).

Tuition for all students is now affordable (and continues to drop as time goes on). Student loans are minuscule.

In the end, higher education is commoditized. Prices plummet, quality increases.

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