The college bribery scandal

Of course universities have long taken money to let in unqualified applicants, what is happening here is they are going after the local rate busters.  Here is my Bloomberg column on this topic, excerpt:

My second worry is that the number of bribery cases suggests that many wealthy Americans perceive higher education to be an ethics-free, law-free zone where the only restraint on your behavior is whatever you can get away with.

I suspect that most of those charged in this case never expected they might have to answer in court for their actions. To consider a parallel situation: I wouldn’t dream of shoplifting. Yet I sometimes drive 32 mph in a 25 mph speed zone. Like most of us, I draw a distinction between laws we are expected to follow, and laws we aren’t.

To me, the number of people caught up in this scandal indicates that too many Americans do not take seriously the idea that our system of higher education is a set of institutions bound by morality and laws. They take its governing rules as optional and conditional, depending on convenience, much as we do many speed-limit signs.

In this case, those charged are mostly wealthy Americans of high social status, not gangsters. They probably thought of themselves as law-abiding Americans, with exceptions so minor as to be negligible. In other words, this case illustrates what a low opinion America has of its system of higher education. As a university professor, I would feel much better if it had been mobsters charged with these alleged crimes.

There is much more at the link.

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many wealthy Americans perceive higher education to be an ethics-free, law-free zone where the only restraint on your behavior is whatever you can get away with.

This may be an overly cynical take, but to what extent to universities act like ethics-free, law-free zones? They accept students and their student loan payments who are unlikely to matriculate; they have no skin in the game regarding student loans; insiders understand the "paying for the party" phenomenon, while outsiders don't (https://jakeseliger.com/2014/04/27/paying-for-the-party-elizabeth-armstrong-and-laura-hamilton/); too frequently they don't seem to defend free speech or inquiry.

Not all universities, not all the time, not all parts of all universities. Maybe I am too close to the sausage factory. But I see a whole lot of bad behavior, even when most of the individual actors are well-meaning.

This is worse than the free speech stuff. This is how crony capitalism is perpetuated to the next generation and the next and the next until there is no next. Our way of life based on rule of law and meritocracy is threatened by these faux-aristocrats believing themselves to be above what they see as high-minded foolishness, which of course is for little people, but not them. This is how a civilization decays. Rots starts at the top.

yeah but you have to admit lori laughlin looked pretty good on old seasons of full house.

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I don't know. Devil's Advocate: I think most Americans would long accept that higher education is class stratified, and that admission is not really fair on an individual level - Affirmative Action, legacies, students and communities with disproportionate intake of smart students (mostly Jewish and Asian) understand the application process better and apply at higher rates than their individual achievement suggest.

So this would not upset them hugely. People don't believe in a naive "meritocracy" in the first place.

What they do believe and expect is that their institutions are mostly doing things which are directly useful to them as US, or at least Western, citizens.

They do expect is universities are mostly patriotic and supportive of the nation and the well being of its citizens over a random global person, or if not that, at least ideologically neutral places of "pure" knowledge production and so openly supportive of free speech. So, that universities end up concerned with ideologically silencing people for the good of integrating all humanity into a global community at the expense of the nation, even at the expense of pure knowledge production, would trouble them much more.

For the academic elite it is probably different; they vocally support free speech, but rationalize against why it's never allowed "in this instance", and they don't really support "my nation first, right or wrong" or even particularly Western civilization against the others, so the lack of institutional interest in the national interest troubles them not.
But they are deeply concerned that their elite status is legitimate and earned and really that it will continue indefinitely (that they can continue to enjoy life as an upper-middle class bourgeois citizen), so any attack on "meritocracy", that upsets them.

Trump at Wharton, Kushner at Harvard.

Those results, in the long run, were not so good.

Obama at Columbia, Obama at Harvard, Chelsea Clinton’s mail-order PhD...

-15 Hufflepuff_Thomas for switching names in another poster's original content to match your own partisan lean, like that's clever or something.

And you respond to Thomas with a snarky comment, as if that’s clever or something.

-10 Slytherin_Tenhofaca, for not understanding the difference between humorous originality and tired partisan hackery.

Bringing up Trump and Kushner out of the blue, that’s tired political hackery. Clinton’s mail order PhD, now that’s humorous. See I do know the difference.

Conspiracy, mail fraud, wire fraud, bribery, tax fraud, and more. And that is the parents not the leaders of this scam. Ironically the charges are a lot like Manafort's charges, I'm guessing 90 months in the big house is the correct sentence.

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This comment is actually topical.

https://www.vogue.com/article/jared-kushner-harvard-admission-college-cheating-scandal

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Mail-order Ph. D.? You guys have a serious hate problem.

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I think you ask for too much. More humbly this time: we merely ask that American universities refrain from indoctrinating the next generation of 9/11-type attackers.

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It actually isn’t. The generation Z progeny of wealthy Americans is of little human worth and competence. The idea that they could actually attain any real power is a joke.

The vast majority of kids involved will go to USC or Yale or wherever, possibly graduate, learn next to nothing, and probably spend the rest of their life on Instagram taking pictures of their food, sunsets, and beautiful friends.

The idea that they will do any grinding work related to actually running a business and thereby become a crony capitalist is so laughable.

Even the croniest and most privelaged of capitalists still has to do some work. Many of these kids were too lazy to even fill out their applications....

Um being a social media influencer is a highly lucrative business see the Kardashian brood.

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This scandal calls for a federal response. I think we can all agree that our current system vests too much power into the hands of non-transparent, self-interested private parties.

We should create a nation-wide clearing house that ranks applicants and then matches them with appropriate schools.

Then we need a clearing house that ranks job seekers and matches them with appropriate jobs. Another clearing house will determine appropriate salaries. And then another will match people with appropriate spouses.

Shush. AOC is monitoring this channel.

There it is again! That chick is all you guys talk about.

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Yet Cal-Tech doesn’t have this problem.

Strict grading standards and tough required courses for all make it unprofitable for weak students to be "gifted" admission. They don't survive.

Yes precisely. It’s time to apply the CalTech approach to every school that receives federal funding and has tax exempt status.

+1

This would address a host of higher education problems.

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"Yes precisely. It’s time to apply the CalTech approach to every school that receives federal funding and has tax exempt status."

We maybe approaching something like this. What's really needed is some lawsuits. A school's admission process should be transparent and if a school is found to be consistently violating it's own public policies, it should be in-eligible for any Federal funding.

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plus 1 for weeder courses.

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Hey Asian Americans, instead of being told by Harvard that you lack courage and likability tell those Ivy League ninnies they lack moral courage and are deeply unlikable themselves. The real game isn't played with grades, SATs, or any semblance of merit. It is elite corruption to the core.

Certainly America would be better off if we burned all the Ivy Leagues to the ground (and all denizens thereof).

I do find that mass murder is usually the right way to go.

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That's how Orange Einstein got into Ivy League. Daddy money and bone spurs.

So this is it. In Trump's America, planes fall from the sky and the children are taught to cheat by their parents.

Is Ethiopia part of Trump's America? Seems like another shithole country, like Laos or Brazil.

It was an American airplane.

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I'm sorry but if you have to bribe your way into Wake Forest, you and your child are both idiots. At least reach for Penn or Columbia if you are going to risk an FBI investigation. Morons.

Good point.

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"Universities are loath to admit the details, but if you give a few million dollars to a top school, your children will be given very favorable admissions consideration. "

Yes, those are called development cases.

https://en.wikipedia.org/wiki/Development_case

It's funny how there is an undiscussed affirmative action track for the privileged few while the masses get angry over race-based affirmative action because the media loves distract us while pushing our buttons. Our politics is like this. The privileged few quietly make their moves while the masses are outraged at the latest injustice Facebook or Twitter told them to be mad at.

Sorry to burst your bubble but there is no grand conspiracy of the wicked few manipulating the superstructure to oppress the masses.

He didn't say conspiracy, and it works without it, if it merely becomes a pattern.

The "privileged few quietly" manipulating the benighted masses sounds a lot like a conspiracy. It's not a pattern either. So (as usual) you're wrong, regardless.

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"It's funny how there is an "undiscussed" affirmative action track for the privileged few while the masses get angry over race-based affirmative action "

That's a bizarre line. There are plenty of articles written on exactly that subject. Tyler mentions it in his post. You linked to a Wikipedia article on it. To label it 'undiscussed' is mulpian level thinking.

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Quite the contrary. Every time someone complains about race-based affirmative action, a defender will say, "Why aren't you complaining about affirmative action for athletes? Or people whose relatives went to the school? Or whose parents gave money? Maybe you don't care about that because you're racist."

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Sorry Professor Cowen -- the shame here is not that higher education got caught up in a corruption scandal. (Legal) Pay to enter has been happening a long time.

The shame is that many well-meaning people (including yourself and Professor Tabarrok, both of whom are smarter than many of us could hope to me), promote policies that lead to this very outcome. You relentlessly promote online education for the masses, say the bottom 75 percent of the wealth distribution. You are perfectly content and happy for the top 25 percent to have access to the best schools and top-notch education (or at least top notch networks), but you could not care less if the masses end up looking at canned videos, unable to ask spontaneous questions of professors (ok, increasingly disillusioned adjuncts willing to give out A's to get good reviews), unable to build networks important for future success, learn the softer skills of interacting with peers, or develop the culture of doing independent work.

As legislators continue cutting funding for public higher education, rich parents will find one way or another to get their kids into good schools. Looks for more legalized bribes.

I will believe that you have good points to make about this corruption scandal when you stop supporting online education for the masses.

Look for online education to be the next marker of income inequality 10 years from now. If you could figure out the data, because certificates and transcripts might not say how many credits of the 120 were done at home behind a computer. Of course, economists, libertarians, and state legislators may see this differently. They will see the successful outcomes of elite schools and not blame the underfunding of public higher education as the problem, but call for more funding cuts for "underperforming" state universities.

On the other hand, if colleges are merely rent seeking institutions, exploiting the understandable desire of young people to get into good jobs, but essentially not really teaching anything useful, then Professors Cowen and Tabborok are doing the world a great service by providing the same information online for free. Hopefully, eventually, the world will realize the zero sum signalling game that is academia is total madness and people who were brave enough to refuse to pay the education mafia will be rewarded for their independent thinking.

1. Fair enough if the rich can't buy access to high-quality personalized education.
2. Given the inevitability that the rich will buy access (if only because of signaling as you would say), watch for a more inequitable nation in the near future.

Well I think the damage is already done in terms of rich people having preferential access to elite colleges - actually if anything it is better than in the past, I would bet that more people from elite backgrounds attended Ivy league, as a percentage, in the 1960's than today.

My view is that the view of people of the causality of elite people attending elite colleges is the wrong way round - in other words they are already elite, that's why they attend elite colleges. It's not the college making them elite. So making all colleges look like elite colleges won't result in everyone becoming like the elite. Sort of like giving people in a dry climate an umbrella won't make it rain, even though in rainy parts of the world people carry umbrellas. So expanding education beyond the small fraction of the population who are brilliant enough to work at the knowledge frontier won't improve things for the bulk of the people who are not, it will actually make things worse because now they are having to spend years in college doing BS stuff at great cost to them before getting a job. I am not sure if you attended a public school - but think back to then - most of the kids were not intellectual or interested in their school work. They have other priorities and interests. Which is absolutely fine. Making these people jump through endless academic hoops for 18 or 20 years to get an expensive degree in something they will never use is downright criminal in my view. It is only sustainable because of the Government subsidies to the Education industry, with direct grants and student loans. Even worse is the graduate industry, where the really smart people spend years studying some obscure subject to produce a thesis that about 10 people might browse before it sits on the shelf, so that they can get a shot at some tenure position. It is a terribly wasteful system, not necessarily economically, but as a waste of talent and motivation of clever people in the prime of their years.

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No one seriously believes that college STEM education is just signaling. Come on...

Bryan Caplan - The Case Against Education;

https://press.princeton.edu/titles/11225.html

Lots of peoplemwith physics undergrads get programming jobs. The physics degree signals "very smart," not "lots of prior programming classes."

True about the signaling, but lots of physics curricula involve a substantial amount of programming too.

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Take a look at the requirements to get a computer science degree at any state university. At best, 1/3 of it might be relevant or useful. Probably 25% of the coursework would be enough.

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No, I don't know anyone who says that. Even Brian Caplan, the most ardent defender of signaling theory I know of estimates only about 80% of returns to higher ed are from signaling, and specifically calls out stem fields as less signal-y than liberal arts fields.

Only 80% of the returns are due to signalling.......well that's alright then.

Of course the question is not whether college education is mostly signalling or not, it is whether the purported purpose of college education can be achieved in other more cheaper ways. Taking the case of computer science, is a 4 year college degree really the best way to grow the next generation of programmers?

Having seen both types of programmer in action: yes, the four-year degree is probably the best way to grow the next generation of programmers. There are exceptions, but probabilistically speaking, yeah, the four-year degree holder is better.

Of course you see an improved performance by the guys who go to college vs the ones who didn't. That's entirely consistent with the signalling model - high capital people go to college at the moment because otherwise they signal that they are not high capital. They realised they had to pay the education mafia.

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I would say signalling was at least 75% of my computer science degree, maybe as high as 90%. My first day on the job I had basically no idea what I was doing because my computer science classes all taught out of date information. If it wasn't for the degree requirement, I think I could have started my career after my intro to CS class I took as a freshman, and not been very far behind. I learned more real-world skills in the first two weeks of my career from one contractor that took a liking to me than I did in four years of college.

+1. I have a Chemical Engineering Degree and found the same. My company basically has to re-train all our new hires, including the ones from top ranked universities.

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Some very good points here. I see it differently. I believe that online education helps lower the barriers to learning complex subjects. I have a PhD from a very famous university and I still take online courses to directly educate me in topics related to my work.

Free online education is the best thing to have come along since cherry pop tarts, and I realize that is a very strong statement.

Apple cinnamon, but yes.

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Public colleges and universities are overfunded because too many of them are providing mostly remedial education (at best) at enormous cost.

I would say it has more to do with the extravagant growth in administrative positions.

"In all, from 1987 until 2011-12—the most recent academic year for which comparable figures are available—universities and colleges collectively added 517,636 administrators and professional employees
...
Part-time faculty and teaching assistants now account for half of instructional staffs at colleges and universities, up from one-third in 1987, the figures show.

During the same period, the number of administrators and professional staff has more than doubled. That’s a rate of increase more than twice as fast as the growth in the number of students."

https://www.huffingtonpost.com/2014/02/06/higher-ed-administrators-growth_n_4738584.html

Administrative bloat is undeniable, but that doesn't gainsay my point that debasing K-12 education by lowering standards so that no one is left behind has resulted in the debasing of a college degree.

If a BA is increasingly becoming the equivalent of what an AA was in the past (and eventually a high school diploma at the rate we're going), then the demand to make college "free" like K-12 education will only intensify.

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RM, there reasons why university education is continuing to become more expensive that have nothing to do with MOOCs - a captive market, entry of the world's middle class into the American university system (student migration), and bloated university budgets (feeding bloated administrative payroll and high salaries).

In a world without Cowan+Tabarrok pushing MOOCs but everything else the sam, you end up with likely the same costs for advanced higher education, but no alternatives for this for folk with little means and credit that at least allow them to say "I know the material equally well". That doesn't seem like a better outcome.

It seems better to focus this ire on containing university costs*, rather than stopping the MR guys trying to help provide low cost education for people who the university model is unviable (poorer people Middle Income Countries, people with autism, etc.)

*And "Free college" a la Millennial Left is not an alternative to containing costs; that just redistributes income from taxpayers, who may or may not be well educated, to the highly educated who already enjoy solid income advantages.

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This is stupid. It's stupid for people to pay millions of dollars for their kids to go to school. It's stupid to pay the sticker price at Wake Forest. The degree is not worth that much, not to mention multiple millions. It's even stupid to worry about this. Yes a few slots get taken away from more deserving kids. But this money is normally subsidizing their tuition! That's why the backdoor is legal but the sidedoor is not.

Overall, TC and Alex are doing a lot of good pushing people to approach college as what you actually are learning. The more society adopts that perspective, the better a value-proposition higher education will become.

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The condemnation of this scandal has been universal, even by those that sometimes deny that there exists such a thing as "merit", for example when discussing affirmative action. The fact that we all are offended by these cheaters' conduct implies that we all do, in fact, recognize the importance of merit in college admissions. No one has said, "Who cares if these applicants gained admission over more 'meritorious' candidates? Whose to say what constitutes 'merit', certainly not high standardized test scores."

No, we recognize that there is such a thing as merit, and we think it's morally wrong for wealthy parents' kids to be admitted over higher merit students. In fact, we can view these parents as having implemented a type of private affirmative action. Conventional political affirmative action empowers policy makers to elevate politically favored applicants over higher merit applicants. Private affirmative action empowers parents to elevate privately selected applicants, their own children, over higher merit applicants.

With the universal condemnation of these parents' cheating, it's hard to imagine that we could go back to denying the rightful primacy of merit in college admissions.

I'm far removed from the education environment, but I had assumed that donors knew they would be get preferential treatment in the future if needed.

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I thought it had something to do with bribery and cheating. It would be cheating even if people were chosen by casting lots. Anyway American universities don't care about merit. In Brazil, we use standardized content-rich tests to select students, not SAT and extracurricular hocus pocus (even affirmative action students are strictly ordered by their test marks). We don't ask whether students serve hot pockets to poor people, play Laotian musical instruments or whether their parents donated money. InnBrazil, merit is king!! The American system is a farce, a lie, a mockery of justive conceived to keep the poor in their place and explore tham and their children.

and yet you don't live there?!

Where is there?

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"In Brazil, merit is king!!"
Hahahahaha! Mate, you're such a troll!!

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The following quotes are translated from the headline and second headline of the link below.

"The "meritocracy" in Brazil unmasked by the numbers."

"Study unmasks the myth of "meritocracy" in Brazil. The poorest need to work hard for nine generations to reach middle income."

https://www.pragmatismopolitico.com.br/2018/06/meritocracia-desmascarada-brasil.html

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Private affirmative action empowers parents to elevate privately selected applicants, their own children, over higher merit applicants.

All the details haven't come out yet but the scandal is that bribes haven't gone into the university budget, outside forces have taken advantage of the admissions process to compromise coaches and use other factors to put a thumb on the scale. It's actually a teapot tempest that won't be eradicated as long as the current system remains in place.

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This shouldn't threaten affirmative action. One of the schools involved, the University of Texas, already reserves spots not merely for children of donors*, but for the children and relatives of state legislators, in order to secure their favor at the capitol. The practice is common, and occasionally draws brief scrutiny; the fact that many of the recipients of the largesse are Hispanic (and that the Rio Grande Valley is unusually well-represented in these memo-from-the-desk-of-the-UT-president college and law school admissions) actually helps to perpetuate the system. If it were merely the children of white Bubbas, the media (what's left of it down here) would of course take a much greater interest - but this is just Diversity by other means.

*And once, memorably, even overruled a faculty panel convened for such matters, on one of those she-said, he-said Beach Blanket Bingo things; the faculty had ruled in favor of the boy - that is, that there had been no "rape," and then shortly thereafter the girl's wealthy father dropped off a check, and the college president himself intervened and expelled the boy. What was interesting is, the folks at UT seem to have learned well the adage that the cover-up is what gets you in trouble, and they did not trouble overmuch, as I recall, to deny this series of events.

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"But what does that say about our understanding of these institutions as meritocracies? Parents pay illegal bribes, in part, because many of these institutions just don’t give enough students a fair chance to get in....the advantages of coming from a wealthy, well-educated, 'upstanding' family are extreme."

Not really on point in these cases. Despite their wealthy backgrounds, these kids would *not* have gained admissions without cheating, i.e., they would *not* have outscored less wealthy kids on the SAT, etc. The parents paid bribes precisely to thwart the merit-based system that would have otherwise allowed less wealthy students to have been admitted over their own children.

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If attending an elite university is the route to a sinecure, why, ethically is this bad? Competition for such elite places is zero sum, if one person gets in, another doesn't. So in either case (no corruption vs corruption) there is a person getting utils from getting in. But in the corruption case the person receiving the bribe also get's utils, as they are now richer. So if you are a utilitarian surely you should prefer corruption (at the margin) to the non-corrupt case? I agree that on a deontological view it is wrong - just arguing straight utilitarian here.

I think you've just explained why it's not relevant to think of this strictly in a utilitarian framework.

Perhaps the argument here is that there is value in an institution which does in fact reward merit in the longer term, and undermining the concept of merit undermines wider belief that hard work does in fact pay off. At the margin maybe this is exceedingly minor, but on the average it's fatal. There is value in enforcing the rule.

Small c corruption like this encourages rent seeking and lobbying instead.

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Using your utilitarian approach, you could make the exact same case with theft.

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If one of these kids becomes your brain surgeon, you will not be getting utils.

I predicated my remarks on the position leading to a sinecure, not an actual job. I think this is the general view now of elite colleges and big companies, with the idea that certain ethnic ior genders groups be given access on the basis of their share of the general population, rather than their merit. In other words, your personal capital is irrelevant because the job isn't actually about doing a real role, it is about extracting rents.

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I take it you fancy medical school admissions, medical schools, and surgical residency programs don't weed anyone out.

Yes, those programs require actual hard work. There's no chance these kids would have wanted or could even be dragged in kicking and screaming to a program that expected them to give up free time for course work.

For reference, this is a comment from Lori Laughlin's daughter:

"Olivia Giannulli, who has nearly 2 million subscribers on her YouTube channel, Olivia Jade, came under fire last year for saying that she was only at USC for the partying, rather than the education. “I don’t know how much of school I’m gonna attend,” she said in the video, citing her busy work schedule. (She works with companies to create sponsored content and now has a collection with Sephora.) “But I do want the experience of, like, game days, partying,” she said."

http://time.com/5549921/college-admissions-bribery-scandal/

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Can people really perceive paying someone to sit in and take an SAT exam fraudulently as similar to driving past the speed limit a few mph? Surely, anyone who does this knows it's wrong.

To play devil's advocate, nobody has ever died because of a fraudulent SAT score, but you can't say the same about speeding. A little bit over the limit is probably no big deal, but surely there is some threshold at which speeding becomes the worse crime, and it would be hard to get everyone to agree on where exactly it is.

That's exactly why it feels different. Speeding is an incremental offense, while SAT bribery is an either-or.

OTOH, the bribery here would be perfectly legal/acceptable if paid to the school. As would the result - preferred admission.

IMHO, the real sins here were: (i) that these upper-middle class parents found a way to claim a privilege normally reserved for the rich; and (ii) paying less than the going bribe amount made the schools' whales feel like chumps.

fake edit: That is, Tyler's concern that "In this case, those charged are mostly wealthy Americans of high social status" is misplaced. Those charged are moderately wealthy Americans of moderately high social status.

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"ii) paying less than the going bribe amount "

+2, this all feels like outrage because the parents didn't give the bribes to the 'correct' people.

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I don't know how these parents justified it to themselves, but I suspect it's the same way most of us justify embellishing our resumes when we're looking for a job. It's a game with fuzzy rules, and you're just trying to get your foot in the door, so why not cheat a little?

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'that many wealthy Americans perceive higher education to be an ethics-free, law-free zone where the only restraint on your behavior is whatever you can get away with'

Well, yes, that does describe many donors. Somehow, that is rarely a scandal, even when one is able to read the donor agreements. Of course, some people really don't like having that topic brought up, especially when they have personal experience of such.

'I suspect that most of those charged in this case never expected they might have to answer in court for their actions.'

Or have a university president apologize for donor agreements that violate academic principles, an apology being made mainly due to those agreements being made available as part of court proceedings.

'that too many Americans do not take seriously the idea that our system of higher education is a set of institutions bound by morality and laws'

Not just donors - some faculty, too.

'They take its governing rules as optional and conditional, depending on convenience'

Considering what happens to links demonstrating this happening over a couple of decades at one university, let's just call this the wealthy kettle calling the well funded pot black.

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The sad thing is that even with all the advantages of being born into an elite family, they couldn't even get into a top school. This makes them even less qualified than affirmative action students in my eyes and I'm against affirmative action.

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Au contraire, Tyler: this case illustrates what a low opinion our Cognitive Elites have of America and of Americans who are not members of any elites.

Our elites are illustrating the mobster mentalities they have cultivated among themselves in their own sectors and domains.

Corruption of all American elites is on display here: business, media, entertainment, "higher education", we know about government already.

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I'm a long time reader of this blog. And this is one of very few times that I feel like saying "Calm down!".
My perception is this : this situation can't be very general simply because there are not enough "sailing coaches" that would be willing to take bribes. So this is a fairly marginal activity in total.

And perhaps I'm wrong, but I believe that the Feds would be very interested in catching Harvard, Princeton, Columbia etc in this scandal. And the firm involved would be interested too. So this may be harder to engineer on a large scale than it appears, because these universities are not on the list.

"Coaches and professionals from USC, Yale University, Georgetown University, Stanford University, University of California at Los Angeles, University of Texas at Austin and Wake Forest University are implicated in the case. "

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If these people just bought a new building, it would be 100% legal. Their crime wasn't that they paid but that they didn't pay enough.

It's not the amount of money. They payed the wrong people.

In one case a high-school coach signed a document that stated the kids were part of the rowing team or something. That supporting document was later used on the university application to portrait a coach sloth as a successful young athlete.

It's like owning a popular restaurant reserved for months in advance. If one outsider hacks your reservation system and charge people to get ahead place in the reservation list, what would you do?

"They payed the wrong people."

+1, they tried to bribe someone besides the chamberlain.

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Maybe instead of trying to buy our way into school, we should legalize and utilize blackmail to get advantageous placement.

https://marginalrevolution.com/marginalrevolution/2019/02/why-should-blackmail-be-illegal.html

Good catch. The problem with a lot of the more novel solutions to social problems is that they don't mesh that well.

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Why don't you ask Caplan about what this might mean for signalling?

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I just can not imagine it happening i Brazil.

Well sure, why waste the money just to get your kid into some Brazilian 'university'?

Maybe he meant that it just wouldn't be a scandal in Brazil?

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No, it means corruption is unheard of in Brazilian universities.

No, it means Brazilian universities are crap and no one would bribe anybody to get in.

Many peopel tried to bribe people to get in, but Brazilian university workers are unbribeble.

So there are many immoral, corrupt would-be bribers in Brazil. Agrees with my priors.

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HAHAHAHAHA!!! Thiago, you're such a troll!!!
The following quote is translated from the first two lines of the link below.

"It was taking too long: the malignant tumor of corruption spread to the academic milieu. In fact, there have always been various forms of corruption in Brazilian universities, (…)."

https://www.campograndenews.com.br/artigos/enfim-a-corrupcao-chegou-as-universidades-brasileiras

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To a European outsider, it seems that what matters to succeed in the US is not your intelligence, your ability to work or what you learn in university, but almost exclusively where you "got in". I doubt the education you receive at a top 20 school is substantially better than that at a top 200 school.

It seems like an exhausting, meaningless game to spend all your youth perfecting your CV to get into Harvard et al so you will be freed of all worries once you got accepted. So, of course people will find ways to get that piece of paper.

I'm not even sure those who got in through bribery will be worse students than those who got in regularly.

I don’t know if there’s really that much economic benefit for most people. I agree with you, the education itself is about the same. It’s mostly a status marker.

I don’t get the point about “egalitarian values” — the Ivies are the most elitist institutions in America. And I don’t think it’s good for democracy to have so many high officials go to the samefew colleges.

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My own experience - I taught a course in grad school for several years at a top-30 school, now I teach the same course at a top-60 school, and there’s definitely a difference just because of the quality of the marginal student. I have to scale things back, give more background info, etc at my current school.

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Why do wealthy people cheat? Because they can. There's an estimated $30-40 trillion in offshore accounts that escape taxation. It's tax evasion, which is a crime, but the super wealthy do it with impunity. Then there's the "legal" tax avoidance schemes used by Apple an other large, multi-national firms, which avoid taxes by putting patents in a file drawer in tax havens and apportioning income to the file drawer. Recall that Apple executives and executives from other similarly situated firms were greeted as heroes by Republicans when they appeared in Congress to explain these schemes. But lawlessness among the wealthy isn't the only reason the wealthy cheat. In the case of higher education, the importance of a degree from an elite college has become so important that the wealthy feel they must resort to any means to get their kids into an elite college, even by fraud. A degree from a middling state university was at one time, my time actually, the ticket to a good career. Not any more. Why has opportunity in America become so stratified, the elite on the one hand and everybody else on the other? Cowen says we all cheat if we can get away with it, driving above the speed limit his example. Yes, we are all in this together, the wealthy who cheat on their taxes or cheat to get into an elite college and the rest of us driving over the speed limit to get to work on time.

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Why not auction off something like 10% of the spots at elite schools, conditional upon meeting some less stringent measure of quality than normal admissions?

Well, of course, they do that now but not so explicitly. Offering preferential admissions for the children of donors (rather than selling admissions slots on StubHub) is better because A) it's less obvious to the rubes, and B) the 'donations' are tax-deductible, so the federal government (e.g. taxpayers) get to kick in a third of the cost.

And speaking of StubHub, Universities used to run a penny-ante version of this tax fraud scheme where purchasing desirable football tickets required a (tax-deductible) per-seat 'donation'. After many years, the government finally put an end to that scam:

https://www.case.org/Samples_Research_and_Tools/CASE_Reporting_Standards_and_Management_Guidelines/Repeal_of_Athletic_Seating_Deduction.html

c) schools can take advantage of asymmetrical information to milk more money out of whales. A published price / auction would reduce that take.

For the same reason, personal seat licenses should be viewed as "pro-little guy." Athletic departments have always (and will always) gave better service to big doners. The PSL just published the price list.

Also, explicitly auctioning off slots would risk damaging the brand (and the mystique) of various elite universities. That brand/mystique is the thing that keeps the elite universities on top, so it's not something they want to mess around with.

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The last decade has not been a great commercial for the honesty and intelligence of our elites.

Honest question, which decade was?

As I get older, I get less idealistic, so politicians seem - not less bad- but more understandable. I do think the last decade has been worse though. I only vote for those politicians who try to stay out of my life the most.

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These places have been thoroughly corrupt forever and didn't everybody already know it? From the horse trading HS admissions counselors and high dollar 'admissions consultants' to the phoney, cynical CV padding, to the Asian personality downgrades, to the legacy and big-donor scion admits (whose parents were doing bribes the right way at the proper price point, not like these underfunded arrivistes) to the "everybody gets an A" grading system.

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Professor Cowen’s take is insufficiently cynical. The reason these people never expected to answer in court for their actions is because rich people are usually above the law. Criminal justice is for other classes — gangsters and mobsters. The indictments are embarrassing, but these people probably aren’t in real jeopardy. We can expect punishment to be meted out in inverse proportion to status. The coaches who accepted bribes will go to prison, but the people who paid bribes will get probation and community service.

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Have Americans no sense of decency left?!

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college is dumb.

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The dialogue in this article sounds like the witness was entrapping the defendant. Are we all being caught up in a narrative because it's so delicious?
"CW-1: What happened is, all the wealthy families that figured out that if I get my kid tested and they get extended time, they can do better on the test. So most of these kids don’t even have issues, but they’re getting time. The playing field is not fair.
CAPLAN: No, it’s not. I mean this is, to be honest, it feels a little weird. But.
CW-1: I know it does. I know it does. But when she gets the score and we have choices, you’re gonna be saying, okay, I’ll take all my kids, we’re gonna do the same thing. (laughing)
CAPLAN: Yeah, I will."

https://abovethelaw.com/2019/03/willkie-farr-chair-caught-in-college-admissions-scandal/

Entrapment is if it's the police offering the deal. This is just a crook offering someone his services. Then when caught he's squealing and being labeled a "cooperating witness".

If the cooperating witness was being taped with his knowledge, it seems like a distinction without a difference.

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These parents are cheapskates! I don't think I've read more than one figure over a million dollars. Frankly, $150,000 is not going to get you a lot of development office traction with admissions. So the real surprise here is the relatively low price B-listers are investing in their hopeless children than the more obvious "I'll build you a building" parents.

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I wish that I could find the quote that I read yesterday in the news by someone expressing outrage that how dare these rich people think that there's a set of rules for the rich and another for the rest of us.

I had to laugh. Universities, with affirmative action, geographic/race/gender quota systems, and anti-Asian policies, already established that the rules are arbitrary and unfair.

If anything, the wealthy were playing by the rules. Crappy rules, but still within the system. All another reason why the higher education bubble needs to pop.

This is only "like" affirmative action etc in the primitive sense that it might take "your" slot.

I mean, if you think shading admission for the underprivileged is the same as doing it for the overprivileged.

We should probably move to an affirmative action that identifies the underprivileged while pushing fewer hot buttons (income based, etc) for this reason. At least I hope that would help people understand what happened to "their" slot.

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It's a good day for the signaling model of education.

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Not sure I understand this. "I was admitted to Harvard because my dad was, a long time ago" is apparently OK. "I was admitted to Harvard because we all pretended that I would be on the rowing squad, when in fact I have never had any such plans" is apparently not OK.

I can't say that I find the cases all that different.

I agree, but having someone take your SAT is a more direct fraud.

As a middle ground, a local private high school accepts (rich) kids who "don't quite fit" in public schools, and for $40k a year or something gives them all As. I had hoped admission staff saw past that, but maybe they're part of it. Those parents will be ready to pay full freight wherever they go.

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its true that there is hypocrisy but reform always means hypocrisy. Before, you didnt enforce the laws and now you do. thats hypocritical.

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>"I can't say that I find the cases all that different."

Well, that's because you're Joe Torben, and you aren't very bright.

1 - A guy legitimately gets into Harvard, which is basically impossible to do. He does very well there, graduates, does impressive work afterwards, makes a lot of money, and makes the usual alumni donations. Goes on to do great things. He has a kid who appears to be about 90% on the same track as his Dad by age 18.... but not 100%. He gets into Harvard.

2 - A random guy pays $400,000 to bribe the Harvard rowing coach to say that his son is an Olympic-class rower, even though the kid has never once sat in a boat, and his high school has no crew team. He creates a fake portfolio by photo-shopping the kids face onto actual rowers, just to avoid questions. Then the kid never actually does crew at Harvard, claiming a four-year stomach ache.

If you're Joe Torben, you can't see these how these cases are "all that different."

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According to this Orange County Register story, the money was going to various athletic funds, so it is kinda like building a library or something.

https://www.ocregister.com/2019/03/12/newport-beach-is-at-the-center-of-nationwide-bribery-for-admissions-scandal/

It's just that the fraud was more rogue and low-level than the big gifts.

Good essay Tyler. It captures the dual problems of socially acceptable fraud, and the unfortunate fear we now have as a society that success for the next generation will be hard.

Many tweets on the order of "why didn't these parents send their kids to a state school, and put $400k for them into an index fund?" Good question. The answer has to be a tragic FOMO.

In the picture that dude is wearing Patagonia to his court appearance. That's funny.

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The athletics “nonprofit” was part of the money laundering scheme.

There is more than one entity. The top level "charity" was pure fraud, but as I understand that article, at least some of these coaches were accepting funds into legit sports foundations for their school. Newport Beach guy, and perhaps others took a skim along the way. Maybe some coaches pocketed the whole thing, I don't know.

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One could consider elite universities as taxes on the rich. What I've learned is these colleges and universities don't charge enough. We just need to figure out a way to spread the wealth, maybe to cover the costs for students at real institutions of learning.

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"To me, the number of people caught up in this scandal indicates that too many Americans do not take seriously the idea that our system of higher education is a set of institutions bound by morality and laws."

the "too many [whatever]" construction is as weaselly as it is ubiquitous. Write better.

To me, a small number of rich, privileged dicks doing whatever it takes to run interference for their kids says nothing at all about the hypocrisy of "too many Americans".

Dude, you're inside the corrupt edifice, lobbing hypocrisy grenades at people outside. Be more judicious.

That's a fair criticism.

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I liked this too. Something about throwing rocks in glass houses.

As far as I can tell the only the unusual about this is which exact pockets were lined.

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The moderator fancies the people participating in this scam are the moral inferiors of the faculty and administration. LOL.

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It seems to me that the core problem is competing models of what universities "should be." One side seems to believe that universities confer status, or at least status-worthiness. The other side seems to believe that if you can afford to pay tuition, the institution ought to let you in. Who really cares if a failing student keeps paying his tuition, anyway?

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Whatever happened to Ronald Coase? Isn't this "scandal" just another progressive temper tantrum? Scarce resources are allocated by voluntary exchange of services and cash. Sounds optimal.

If the colleges are private, I don't see where the crime is. If a student cheats on an exam, a college might discipline the student but the Department of Justice doesn't issue an indictment. Where is the crime?

The hypocrisy is ripe, I grant, and I am having so much fun following it. We could just auction off spots in elite schools to the highest bidder, and the college gets to keep the funds. Maybe the issue in this scandal is that athletic coaches get the cash instead of the school. As the Rep. Omar said, it is all about the Benjamins.

The value of elite schools is (1) signaling of upper class status, and (2) networking opportunities inside the school, and (3) a marriage market that allows the elite to greet and meet (assortive mating). Outside of STEM, you don't actually expect learning, do you?

In the UC system, subsidized Californian citizens are denied admission so that full-paying East Asian students can attend instead. Show me the money, baby! That is a state-run school. Why is that not a scandal?

Why is this scandal a scandal? Is it any different from "diversity" admissions? Is is less a scandal that Asians are capped at Harvard so that low-scoring minorities can get in instead? Is it any different from the way big schools admit dimwits to college free so they can toss a ball in a hoop, with all expenses paid? Did George Bush and his daughter got to Yale, did Chelsea Clinton get to Stanford, on the basis of their big brains or their social status? If admission is secured by cash payments, that creates a fairer and more competitive system. Really, if we ban Jay Gatsby from buying his way into Harvard, the result is not a more fair system but just more privileged upper class twits like Buchanan getting into Harvard instead of Gatsby.

Will we recognize that places like Harvard are just finishing schools for the upper classes and stop pretending that it is medievel bastion of scholasticism? Can we stop pretending that the Ivy schools are nonprofit and admit that they make money hand over fist?

It is said that politics is Hollywood for ugly people. And academia is Hollywood for smarter people.

The socialists are all upset! Of course, they want to forgive all the student loans also. How about socialists yank the nonprofit status of elite schools. Harvard can pay the corporate income tax. Maybe academics will start supporting lowering the corporate income tax rate!

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David Frum has a funny take:

"But if those parents had bought their children a security clearance over the objections of every high-level professional to enable their children to use the most precious secrets of the United States to advance their business interests ... totally no problem"

See, the gag is it's the same kid!

Jared and Ivanka had everything bought and paid for by their parents. Security clearances are just another thing.

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Why isn't it tax fraud when a university gives a receipt for a $5 million "donation" that was actually a purchase of an admissions spot? Mis-classifying the $5 million as a donation costs the Federal government $1.85 million if the parents are in the 37% tax bracket.

How about a piffling 1% annual tax on all endowments?

But universities are special filled with special people just like the French nobility who were exempt from taxes on their estates.

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In this discussion we should always keep in mind that going to an elite university does not seem effect life outcomes significantly.

Doing so allowed them to capture much more information about the students than SAT scores and grades do. Someone who applies to Duke, Williams or Yale may be signaling that he or she is more confident and ambitious than someone with similar scores and grades who does not apply. Someone who is accepted by a highly selective school may have other skills that their scores didn’t pick up, but that the admissions officers noticed.

Once the two economists added these new variables, the earnings difference disappeared. In fact, it went away merely by including the colleges that students had applied to — and not taking into account whether they were accepted. A student with a 1,400 SAT score who went to Penn State but applied to Penn earned as much, on average, as a student with a 1,400 who went to Penn.

So it is a very interesting question of why are people paying so much to get there children into these schools? I think it is so they can brag about there kid in Harvard/Yale. It is much easier to steer a conversation to an area were you can mention that your son is at Yale/Harvard than to steer a conversation to an area were you can say he got X on the SAT and all A's in AP class all while doing great volunteer work.

When I told my older son (the one good at school) that if got into MIT I would pay for it, a little self reflection revealed that it was bragging rights that I was seeking and not his benefit.

If Kushner had gone to a state school would he be messing up Mideast policy with his fellow failson, the Prince?

There is this follow on problem, that these idiot kids convince themselves that they are geniuses, and that they should be running the world.

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You think Trump picked Kushner because of his degree and wouldn't have done so if it had been from a state school? Really!?

If Trump went to Podunk State he might not have had to build this "very stable genius" because "good genes" psychosis.

If Kushner had gone to Pudunk State, Trump might have wanted him as special envoy to everyplace, but it would be harder to make it fly.

Of course "Jared from Harvard" is the veneer that makes it fly.

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"So it is a very interesting question of why are people paying so much to get there children into these schools? "

Partly because they just don't know about these results. I played golf with a guy last year who was really hoping his son would get into Stanford. He's an educated professional but had never seen the Dale and Krueger stuff. The next time I ran into him, he'd gone home and spent several hours on the web. Was he convinced by what he found? Maybe half convinced. The data is both counter-intuitive and counter to his existing beliefs and those of his peers--it's tough to internalize. And I pointed out that even if it really doesn't matter, believing that it does may help keep his kid motivated in high school. If he gets a rejection letter, that's probably the right time to share the information and not before.

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How much money are you going to save by going to the Penn St alternative to MIT? Not much I think. And it's a really nice school to be a student at. The study shows that on the margin, no difference emerge. But take the same 1400 SAT Penn kid and send him to community college. See how that works out.

All this says is don't overpay for a reach and especially don't overpay by millions for it. Depending on your level, instead of a fancy mediocre fancy university, send your kid to the local state school. Instead of paying for 4 years of a private 2nd tier commuter, go to 2 years of community college and then consider finishing out a 4 year degree. That's if you want to approach it from a cost-benefit perspective.

How much money are you going to save by going to the Penn St alternative to MIT?

If you're wealthy enough to be a full-retail tuition family, the savings could be substantial. The tuition delta between MIT and Penn State (for in-state students) is almost $30K/year. And if you're an MIT-qualified student, a school like Penn St will probably offer an academic scholarship. If you end up with a 5-year bachelor's degree (which is quite common now), the price difference could reach nearly $200K per kid.

But take the same 1400 SAT Penn kid and send him to community college. See how that works out.

If the kid transfers to a four-year university after a couple of years, it'll probably make no difference to prospective employers vs doing all 4 there (all they're going to see is the degree after all). Universities are more willing to take CC transfers with a track record of success than you might guess (not least because transfers don't count against their US News ranking).

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>"too many Americans do not take seriously the idea that our system of higher education is a set of institutions bound by morality and laws."

HAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHA

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Colleges get caught committing fraud. Ty's concern? That Americans will think colleges are committing fraud.

Ty, you might as well work for CNN. At that place, when Dems get exposed as frauds, liars and thieves.... the only concern is that Americans will start voting Republican. You'll fit right in!

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what is happening here is they are going after the local rate busters

Sad this didn't get more commentary. The schools don't care if you donate a bunch of money to the schools. It's when you cut out the presidents and deans and instead donate to the captain of the women's soccer team that they get angry.

+1

The only unusual thing here is where the money was going.

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Very good point. Analogies (so beloved of the SAT-makers, and pundits) are overrated. The ability to cut through the bull would be a useful thing to be able to test for, but I guess it's not what's wanted.

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Precisely, the wrong people were bribed.

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I think everyone that is making this argument is missing one, very large difference. When you directly "bribe" the university, it goes towards things like fancy new buildings, nicer dorms, scholarships for lower income students, and, yes, administration's pocketbook. When you bribe a coach to get you in, it goes to that coach.

The high-paying students are partially subsidizing the lower income students. Without them, the university could not operate at the levels they currently do. This is all above board, and everyone can see it. In the coach bribing case, two people are helped (the coach and the kid) and many people are hurt (the more deserving student that didn't get in, and all of the other students whose degree is cheapened by low quality students.)

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Let's see, it was 13-14 years ago that Sandra Tsing Loh wrote that really funny piece in The Atlantic about the rigors of getting your little kid into a fancy, nay a progressive - nevermind, a merely decent private kindergarten in L.A.

So this college fraud business seems right on schedule. Though the wrinkle has been added that we're cleverly hedging our bets, now you can work either angle: convince Admissions your kid is athlete-smart (leadership quality?) and a serious pole-vaulter, or on the other hand, that your kid is dumb-smart or "on the spectrum" or attention-debited and needs extra time and a safe alone space in which to take the SAT with a specially-attuned proctor.

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This is from the same class of people who tout their high social status and accomplishments in order to slam "Deplorables." Turns out they're no more moral and no more intelligent--probably less so--than the Republican grad of Central State U working in flyover country.

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Markets in Everything

Interesting that the vector for these leveraged admissions was female athletic coaches and athlete recruiting. The schools want their Title IX numbers up, but that creates a need for female athlete students, at least in recruitment. And this tight supply creates opportunities to sell the recruitment places...

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There is a fundamental contradiction here - elite schools are supposed to have high admittance standards because they are very hard, so only the best students can hack it. But the parent's who cheated to get their kids intomthe schools apparently think that the kids will pass efen if they don't meet the standards of the school.

If this is the case, what is the signalling value of the education? Why should Harvard have any elite signalling value if any student can graduate with a degree once they get in the door? Why is the value of a Harvard education so high?

The alternative is that what a Harvard degree signals is not that you are an academic elite, but that you are signalling that you are connected to wealth and privilege, and therefore one of the elites regardless of your individual merit.

Therefore a degree from Harvard doesn't signal that you are particularly smart or particularly educated, but that you are well connected. That brings real value to the firms that hire them. To that extent, it really doesn't matter that you got in through bribery or connections, because that signals the same thing - you are a creature of wealth and privilege.

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These mushy coastal neoliberals can't even do meritocracy right.

One fallout from this would be great fodder for grad student social sci papers to measure the sense of entitlement that these people held, their voting preferences, their race and socio-economic status! I'm betting that these weren't the deplorables that Hillary was talking about.

This is going to be great copy for Fox news and flyover territory hate.

Speaking of crony capitalism, the US mocks royal lineage but hacks and heirs like Megan McCain, Chelsea Clinton, and Bushes (and Trump kin) for some reason have outsized presence proportional to their level of talent, why is that?

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It would be much better for society if you shoplifted instead of driving too fast in a residential (25 mph) zone. 25 already makes the neighborhood unsafe, 33 (usually the scofflaws are much faster than this) makes it lethal.

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It's also interesting that no one is paying bribes to get their dumb kid into tech-oriented schools like MIT or Caltech. The kid would just flunk out after they got there. On the other hand, no real work is expected after admission at Harvard or USC.

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I think that in basically all education, it's a lot easier to get good results by cherry picking your students than by any other kind of educational intervention. That's true from private schools to magnet schools to good public schools in expensive neighborhoods. My guess is that the effect of selecting your students swamps almost anything else you can do to educate them.

That probably stifles a lot of potential innovation, and allows a lot of crappy education to be provided without much consequence. When people look at the best-performing schools (in terms of test scores, college graduation rates, career success, etc.), the ones with the best students coming in are almost always the ones with the best students coming out, too.

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Interestingly, the current scandal is sexy because it deals with sports and involves celebrities, but there was a bigger one that came out 2 years ago that I completely missed at the time (probably too caught up in the Trump election news). Reuters' expose on SAT/ACT cheating (especially with high-revenue-to-schools foreign students) is insane.

https://www.reuters.com/investigates/section/cheat-sheet/

That links to a ton of articles - but just start with this one:

https://www.reuters.com/investigates/special-report/college-sat-one/

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"many wealthy Americans perceive higher education to be an ethics-free, law-free zone where the only restraint on your behavior is whatever you can get away with." It's almost as if they went to an elite college, or something.

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Or look no further than political events of 2016, where a major politician was caught absolutely red handed doing something for which anyone else would do very serious jail time, but the Justice Department simply refused to prosecute. A good chunk of the country had no problem with this, because they perceived this person to be part of their in-group, and thus further perpetuated the idea that the law is for little people.

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