President Schapiro and his long-time co-author, Mike McPherson (former Williams professor and former president of Macalester College), have an article in the Chronicle of Higher Education on the subject of “Moral Reasoning and Higher Education Policy.” For those that don’t know, the Chronicle is sent to and read by many, many people throughout education. I saw copies in the math library at Williams; the Housing Office at UNH got them. The article deals with the moral implications of financial packages to incoming students.

The article itself requires a subscription, but the text was sent to class agents by the development office. It follows.

Many people in higher education think that “values talk” should be reserved for important ceremonial occasions, like commencements and reunions, or for remarks after a major scandal. In their view, values should take a back seat to the pragmatic reality of empirical evidence.

But, in reality, every interesting problem of policy or practice depends on principles as well as facts. Just as higher-education leaders should become good at assessing evidence and analyzing the consequences of particular decisions, so they should become good at identifying and understanding the values underlying the issues with which they wrestle.

To be sure, reasoning well about the moral dimensions of problems cannot by itself ensure sound decision making. Further, while moral reasoning can help you determine the right thing to do, it cannot make you do the right thing. That is not a matter only of reasoning well, but, as Aristotle stressed, of having a good character.

Still, we think it is important to consider examples of issues in higher education that have significant value dimensions — for example, issues concerning admissions and financial aid. Our aim is not to defend particular claims about what is, on balance, the right thing to do in each of the following cases. Rather, we want to show that bringing values aspects to the surface allows us to think about such issues more responsibly and constructively.

Enrollment management. Be more efficient! Higher-education leaders hear that from trustees, alumni, government officials, and others. With educational expenditures at most colleges well above tuition sticker prices — so that even students who pay full tuition receive sizable subsidies — being efficient implies that colleges should exercise great care when they offer discounts off those prices in the form of student aid. If an institution makes the most of its aid dollars, or “leverages” them, it can take the savings and invest them in improving the educational enterprise. Hence, enrollment management, which has become increasingly popular over the past two decades, can be thought of as a tool to promote efficiency.

How might that work? An economist would suggest that an institution examine the characteristics that determine whether a student whom it accepts will choose to attend. That will often vary with the student’s personal and family characteristics, as well as measures of demonstrated interest and achievement.

For example, the better the high-school record — GPA, standardized-test scores, teacher recommendations — the lower the probability that a student will accept admission to a particular college, given that a stronger record implies more college options and alternatives.

How does that translate into student-aid dollars? Improved options and alternatives mean that the college often needs a bigger discount off the sticker price — in other words, more generous aid. If we are talking about merit aid, that implies a larger scholarship, and if we are talking about need-based aid, that implies a better package with a larger grant and a smaller loan.
Many observers wouldn’t have moral problems with that situation. But what about leveraging aid dollars based on other analytical results?

A student whose father or mother attended the college will be more likely, all else being equal, to matriculate. The same is the case for a student who demonstrated interest by going on the college tour or signing up for an interview. Economics suggests a simple institutional response: Reduce the discount off the sticker price. In other words, if an admitted student appears eager to come or has a parent who attended, the college should trim the student-aid package.

What might be good economics now hits a moral barrier. Can you imagine what would happen if alumni found out that the enrollment-management gurus figured out that legacies should get lousy aid packages? Or that signing the guest book before a college tour costs a student thousands of dollars in financial aid? It is hard to determine how many colleges actually apply those methods to allocate aid dollars more efficiently, but some surely do.

At least two considerations make such practices morally problematic. First, unlike adjusting student-aid awards based on need or merit, it is hard to see how taking a tour or being the child of an alumnus connects with the institution’s educational purposes. Second, a policy such as offering less aid to those who demonstrate more interest or enthusiasm for the college has to be conducted in secret, and there are good moral reasons for colleges to be open about the admissions and aid policies that they use.

While it seems impossible to argue that, within the context of need-based aid, replacing grants with loans for tour takers or legacies can be defended on moral grounds, merit aid might just be a different story. If you are “buying” students, why not use all the information at hand? If there are indicators that a student is going to accept an offer of admission, why discount the price when the student’s family can afford the sticker price? (Although if students figured out that going on the college tour meant less merit aid, there would be lots of unemployed tour guides). Again, our goal isn’t to suggest what is right or wrong, but to illustrate that what works in pricing in other industries may not apply to higher education — and, in fact, raises significant questions about values.

Early admissions. Last year both Harvard and Princeton Universities made high-profile announcements that they would no longer admit students early. What are the arguments against early decision? You can’t expect a needy student to commit to attend a college or university before knowing the price. Asking a student to decide where to attend college by early November, the typical deadline for early application, increases the frenzy accompanying selective admission. Students admitted in December of their senior year may take the rest of that year less seriously than one might hope. And, given that economists calculate a sizable admissions advantage to applying early, certain students are able to game the system.

There are plausible responses to most of those objections. A college that gives generous need-based packages might be able to assure low-income applicants it will be affordable without requiring the student to collect competing offers from other institutions. Also, wouldn’t it actually heighten the frenzy if every student who is currently admitted in December instead applied to a dozen colleges in the spring? Finally, for some students, declaring victory in December might mean a more relaxed but more intellectually engaging senior year.

But debating the social benefits of moving away from early admissions isn’t our point — rather it’s that value judgments have come into play. Some colleges clearly think they are serving the public good by dropping their early-admissions programs. They are acting on their convictions even though it may threaten their comparative advantage against rival institutions for top students, and when individual goals are sacrificed for social ones, it deserves notice.

Needs analysis in student aid. Needs analysis, while quite technical in detail, rests on a set of ethical judgments that concern both families and institutions. The system, now heavily regulated by the federal government, began when a large group of colleges came together to develop a common standard for measuring families’ ability to pay tuition. The key normative assumption is that parents have a moral responsibility to pay as much as they can for their children’s college education. A number of judgments then come into play in determining just how much parents can afford.

One major principle is “horizontal equity,” an important concept in taxation. The idea is that people in similar circumstances should be treated similarly, and in particular, someone should not be able to take advantage of the rules by making different choices. For example, you wouldn’t want to treat two families differently just because one held its assets in the form of stocks, the other in the form of bonds. That principle — that ability to pay should be determined by a family’s circumstances, not its choices — leads to some difficult cases.

For example, if two families had similar opportunities to save, but one “lived it up” while the other was frugal, should the second family have to pay more than the first? In practice it is hard to figure out what a family’s opportunities to save were over a lifetime, but most financial-aid officers would say that if you could measure those savings opportunities well enough, you would want to judge the two families as having similar ability to pay. Yet at the same time, everybody agrees that a family who chose to have three children should get more help than one who stopped at two, even if the families had identical circumstances but simply made different choices. There are clearly tough moral issues here.

The corresponding moral expectation for colleges is that they will attempt to meet the need of those who can’t afford to pay. Fully developed, such a system would eliminate cost as a factor in students’ choice of college. Indeed, the needs-analysis system can be seen as a kind of moral bargain between families and the colleges as a group. The colleges in effect say, “Share with us these quite intimate details of your personal financial situation, and we in turn will use that information fairly, to identify those who need our help.”

Yet our current situation is rather troubling. The colleges still get families to provide that information, but the idea that they will not use that information for competitive advantage is largely obsolete. Many institutions use it, for example, to exclude students whom they can’t afford to aid. They also use families’ financial information to try to charge each family the highest “net” price they will be willing to pay. A good deal of trust has been drained from the system, and the issues go far beyond just the facts.

Need-based aid packages. Even within the agreed parameters of a needs-analysis system, moral questions arise about how to apply the results. Heavily endowed institutions have increasingly competed to offer the most-generous aid packages to needy students. The good news is that while those institutions are pursuing their individual interests, they are also confronting issues of economic inequity in our society. For example, “free to $60,000″ — or free tuition and room and board for families that earn less than $60,000 — is supposed to show students from low-income and middle-income backgrounds that college is indeed affordable.

But the slogan hides a more complicated reality. Does “free” mean no work-study expectation or merely no loan? Are colleges really expected to ignore assets including home equity and only look at last year’s family earnings?

Most important, what do such extravagant aid packages mean for the many colleges that simply can’t afford to match them? A similar issue arises when highly affluent colleges eliminate or drastically reduce loans — something most colleges can’t afford to do. Do the richest institutions have obligations to the vast number of other colleges when setting their student-aid policies? Competitive forces may press those other institutions to divert resources from the educational process to student aid. In particular, they may use the money for more merit aid in an effort to woo the most-desirable students — a practice that is itself morally problematic. This is tricky business, suggesting that the narrow pursuit of individual interests might come up against the general good.

College rankings. Although some institutions refuse to cooperate with the U.S. News & World Report rankings, the vast majority comply with the magazine’s request for data. But to appear more selective, some institutions count incomplete applications as denials to lower their acceptance rate. (Students may have mailed the first part but never submitted test scores or high-school transcripts.) Other colleges defer admission to the second semester and then don’t report those students as admitted to U.S. News. Similarly, some institutions record impressive increases in giving rates by purging their databases of graduates who haven’t given in many years. A number of colleges don’t require the SAT exam but proudly report high average SAT scores, ignoring the obvious fact that when SATs are optional, only the highest scorers submit their scores. Others omit the SAT scores of international students or recruited athletes.

A fundamental moral question is this: Even if a college feels strongly that the rankings are bogus, is it acceptable to fool around with the numbers?

Admissions decisions. A small fraction of private colleges are need-blind, admitting all domestic students without regard to ability to pay. While some critics point fingers at institutions with large endowments who are need-aware (in particular, some quite wealthy colleges that consider income when admitting students off the waiting list), we also worry that institutions might continue to spend limited resources on need-blind admissions past the point where it makes sense. If being need-blind leads to a decline in institutional quality as average class size rises, the quality of the faculty members falls, and the infrastructure deteriorates, shouldn’t it be abandoned?

Our concern is that those institutions that can afford to be need-blind might use excessive moral suasion to induce colleges that are far less wealthy to join that exclusive club or remain in it after their financial situations change for the worse. It is one thing for colleges to feel good about themselves for ignoring ability to pay or for offering student aid based only on need rather than merit; it is quite another to expect emulation. “Ought implies can,” the saying goes. Unless a college is rich enough, nobody should be arguing on moral grounds that it ought to follow in the footsteps of those privileged few at the top of the admissions heap. At the same time, it rings hollow when less-selective colleges claim the moral high ground because so many of their students receive price discounts when, in reality, they would readily trade many of those students for talented students willing to pay the full price.

Of course, there are other moral questions concerning admissions. Is it “right” to make the kinds of trade-offs between athletic ability and academic records that many colleges appear to have been making? Should children of alumni have a better chance of admission? What about students admitted because their families have great giving potential?

If nothing else, we suspect these examples have confirmed our claim that unpacking the moral dilemmas implicit in higher-education policy choices does not lead to clear right answers. Have we justified our claim that it improves decision making? We leave that for readers to decide.

Michael S. McPherson, president of the Spencer Foundation, is a former president of Macalester College. Morton Owen Schapiro is a professor of economics and president of Williams College.

Section: The Chronicle Review
Volume 54, Issue 2, Page B10
Copyright 2007 by The Chronicle of Higher Education

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