Tuesday, March 15, 2022

Early Decision

 by Michael C. Dorf

Last week, New York State Senator Andrew Gounardes introduced a bill that would forbid colleges and universities in New York State from advantaging legacies in undergraduate admissions. The bill would also ban such institutions from employing "Early Decision" admissions--in which the applicant commits in advance to attend the institution if accepted and the institution notifies the applicant of a decision earlier than it notifies regular decision applicants.

A couple of weeks ago, I wrote a Verdict column about a similar proposal in Congress to ban admissions preferences for relatives of alumni of and donors to colleges and universities that receive federal funds--which effectively means all U.S. colleges and universities. Because I addressed legacy (and donor) preferences in that column, I'll merely summarize what I wrote there before turning additional attention to the proposal regarding Early Decision.

I begin with a disclaimer. At Cornell, where I teach, the university president recently rejected a student assembly call for abolishing legacy preferences (as noted in this Inside Higher Ed story). As always, I express my own views, not those of Cornell.

Let's start with a brief discussion of legacy and donor preferences. In my Verdict column I ended up very tepidly endorsing the bill in Congress to eliminate them, but I almost came out the other way and even now I'm not sure what I think about the bill. My column expressed two sorts of serious reservations.

First, we live in an era when state legislatures in red states undercut academic freedom by micromanaging curricula to the point of banning whole areas of inquiry, such as critical race theory. Further, the Supreme Court seems likely to restrict or even abolish affirmative action. Meanwhile, although the term "cancel culture" is vague and much abused, the underlying phenomenon of using social pressure to influence personnel and policy matters in ways that stifle free expression is real. In this context, with colleges and universities already subject to excessive external pressure from both the political right and the left, any proposed additional limits on the institutional autonomy of post-secondary educational institutions deserve careful scrutiny.

Second, legacy and donor preferences serve (at least at some institutions and in part) as a fundraising mechanism to cross-subsidize financial aid for students who could not otherwise afford to attend. As I explained in my Verdict column, if a college is forbidden from accepting an under-qualified Jared Kushner simply because his father donated millions of dollars, it may try to make up the lost revenue by abandoning need-blind admissions in order to enroll more fully paying students. I did the math using Kushner père's inflation-adjusted $2.5 million donation to Harvard in 1998 and concluded that one Kushner-size donor preference allows 25 need-blind admissions. I asked: "Is it really worse to have one dope who only got into [a college] because of his wealthy father’s donation than to have 25 students who also wouldn’t have gotten in under a need-blind standard but are not necessarily quite as dopey as Jared?"

Although a handful of colleges and universities with very large endowments may be able to abolish legacy and donor preferences without shifting to admissions policies that even more strongly advantage applicants from wealthy families, for many highly selective institutions, the proposed federal legislation could thus end up having perverse effects. The real problem, I explained in my column, is affordability. Congress or a state legislature that really wanted to solve that problem would provide more financial support. Regulating admissions policies can make a positive difference mostly at the margins, if at all.

So much for legacy and donor preferences. What about Early Decision admissions? Readers might be wondering what admissions timing has to do with these other issues, which involve distributional equity. The key is pre-commitment. A student with financial need who applies and is admitted regular decision to multiple colleges can consider their respective financial aid offers before deciding where to matriculate. Colleges construct particularized financial aid offers based not just on student need and college resources but also on how badly they want a student and competing offers. I googled "can I negotiate for a better financial aid offer?" and got numerous hits for college application advice websites. The top one was typical. It contains five "dos and don'ts." Here is the advice on the very top of the "Do" list:

Talk about competing offers. Colleges are much more willing to work with you if they know you’ve received better offers from competing schools. This is one of the reasons why we urge students to apply to a minimum of 8-10 colleges. You can make a stronger case in your favor if you can point to multiple offers from colleges that will cost less than the college you’re negotiating with. Some colleges will match competing offers if you send them copies of those financial aid letters.

It now should be apparent why Early Decision is a bad option for applicants with financial need. Committing in advance to one college means effectively applying to just one college, rather than the minimum 8-10 recommended to obtain leverage for negotiating an advantageous financial aid package. To be sure, some colleges guarantee that they will meet 100% financial need, but the amount that comes via loans versus grants may differ, and colleges may have idiosyncratic definitions of need. The gold standard is: (a) need-blind admissions + (b) guaranteed 100% financial aid via grants, but most colleges--even most selective colleges--do not offer both. According to one source, only a dozen of the most highly selective colleges in the country do that. And only one such college is in New York State.

The fact that Early Decision is a bad choice for students with financial need means that, unless they apply Early Decision to one of those dozen colleges that meet the gold standard, they simply should forgo Early Decision. So they have to wait a few extra months. No big deal, right? Wrong. It appears that Early Decision applicants get an admissions advantage.

Or maybe they don't. One seemingly reliable source says that, with a few exceptions, there is no Early Decision admissions boost. Because colleges admit recruited varsity athletes with lower average grades and scores early in the admissions cycle, their presence in the pool distorts the picture and falsely suggests an admissions boost for everyone. However, another seemingly reliable source claims that after reviewing the data and controlling for all relevant factors (which presumably include whether one is a recruited athlete), applicants do indeed have a better chance of being admitted to a college to which they apply Early Decision than one to which they apply regular decision.

Without having reviewed the data myself, I don't know whether the Early Decision boost is real. If it is not, then there's no reason to legislate against Early Decision. Its existence doesn't disadvantage applicants with financial need, but it does provide some psychological benefit to applicants without or with substantially less financial need: being done with the stressful college application process in December or January rather than March or April reduces anxiety, depression, and other ill effects of the admissions process for an admittedly small percentage of our teens. Are there more important issues that affect more people? Sure. But if Early Decision benefits those who can afford it and doesn't actually disadvantage those who cannot afford it, then banning it makes little sense.

Still, there is reason to think that the data would support the existence of an Early Decision boost. Why would such a boost exist? The website that purports to find a boost says that partly Early Decision helps a college allocate its financial aid. I'm dubious that this is a substantial motive. If students with substantial financial need don't apply Early Decision (for the reasons noted above), financial aid planning cannot be doing much work. The more important reason for an Early Decision admissions boost, it seems, is the second one listed on the site: yield protection.

Magazines and websites that rank colleges based on quality include a variety of factors, including the GPAs and scores of students who matriculate, acceptance rate (which leads colleges to encourage unqualified students to apply so they can be rejected and thereby increase the denominator), and yield--the percentage of admitted students who matriculate. A college might reject a highly qualified applicant because it fears that the student would prefer to attend one of the college's competitors, but applicants who apply Early Decision eliminate that worry for the college.

Would colleges give an admissions boost to Early Decision applicants even if they were not ranked on yield? Perhaps. Other things being equal, there is probably some advantage to filling a class with more students who consider the college their first choice and fewer who are attending because they didn't get into some other college they preferred. Still, it's hard to imagine that there would be as large an Early Decision boost (if there really is one) in a world in which colleges were not sensitive to how their yield looks.

Ideally, then, colleges would not be ranked on yield. In this respect, as in so many others, self-appointed quality monitors have an unfortunate influence on higher education. To the extent that the rankers can be jawboned, they should be, but I'm not optimistic. Law schools have chafed under the effects of US News rankings for decades, with little satisfaction. Meanwhile, there's very little likelihood of a demand-side change. Applicants pay attention to rankings because other applicants do. This is a classic collective action problem. Regulation is the standard solution to collective action problems, but that's off the table because rankings are speech protected by the First Amendment, and thus cannot be regulated or banned by legislation.

So, where does that leave us with respect to the proposal to ban Early Decision? Here's my summary about what should be done:

(1) Do a deep dive into the data. If there really is no substantial Early Decision boost, then there's no reason to ban Early Decision.

(2) If there is a substantial Early Decision boost, and if that boost exists for yield protection purposes, think about perverse unintended consequences of banning it. If New York bans Early Decision but other states do not, then the legislature will be disadvantaging colleges and universities in New York relative to their competitors in other states. If the yield of a New York college declines and if that causes its ranking to slip, even a little, the college will try to combat that effect in other ways. One popular way to do so is by "buying" numbers, i.e., shifting some scholarship money from need-based to merit-based. A college that follows that course will end up disadvantaging applicants with financial aid.

(3) As with legacy and donor preferences, the core underlying evil is insufficient funding for college. Anything other than better subsidies for colleges (or cost containment measures) will have limited effect.

(4) In light of the foregoing, and applying a presumption against legislative micromanagement of higher education, the case for banning Early Decision strikes me as weaker than for banning legacy preferences, and as I noted in the Verdict column and above, the latter is itself weak. Accordingly, if I were a NY state legislator, I would not want to ban Early Decision and would be very ambivalent about the proposed ban on legacy admissions.