« August 2010 | Main | October 2010 »

September 2010

"The Prestige Racket"

The former president of my alma mater, George Washington Univ., asserts that the demand facing G.W. is (kinda) upward-sloping:

What Trachtenberg understood was that perception is reality in higher education—and perception can be bought. “You can get a Timex or a Casio for $65 or you can get a Rolex or a Patek Philippe for $10,000. It’s the same thing,” Trachtenberg says. The former president gambled that students who couldn’t quite get into the nation’s most exclusive colleges—and who would otherwise overlook a workmanlike school like the old GW—would flock to a university that at least had a price tag and a swank campus like those of the Ivy Leagues. “It serves as a trophy, a symbol,” he says. “It’s a sort of token of who they think they are.”

What’s amazing is that this strategy worked. During Trachtenberg’s tenure, applications for undergraduate admission increased from 6,000 to 20,000 a year, GW students’ average SAT scores increased by 200 points, the endowment increased to almost $1 billion—still quite low for GW’s size, but higher than the $200 million nest egg Trachtenberg inherited—and the university created five new schools.

Welcome to today’s increasingly elite higher education system, where lavish campuses, high tuition, and huge undergraduate debt loads have become the norm.

Also see "Colleges: Where  the money goes".