Economic Inequality and College Accessrecording...
Transcription by Lissa Minkel · Full speech and Q&A. Good transcript.
To our listeners on the internet, around the world, for our audience the Stirn Auditorium at Amherst College, we welcome you to the class of 1960's All-College Reunion Weekend seminar on "Economic Inequality and College Access." I'm Dick Hubert and on behalf of the class I'd like to welcome our panelists, president of Amherst College Tony Marx and my classmate, the former University of Maine chancellor Bob Woodbury.
Before we begin, a note about the program's format. I'm going to provide a brief introduction, President Marx and President Woodbury will offer their commentary, and then I'll roam the audience with a radio microphone taking your questions for our panelists. I'll be on this side of the auditorium. On the left hand side will be David Sang, the class of '06 will be handling the other radio microphone. The College Media Relations office has asked me to introduce a special audience member here at their invitation. He's Bill Simons of Business Week magazine. Bill is writing a major piece on the issue of socioeconomic equity in higher education, and he's going to be talking to students, faculty, administrators, and yes, alumni. We welcome him and all other journalists either here or listening on the internet.
The genesis of this seminar began more than thirty years ago when I produced a nationally televised special on class segregation in American education, "Class in the Classroom." It documented, in part, why the Minnesota State Board of Education chose the all-white community of Duluth as a test for desegregating schools where more than 30% of the students came from families below the poverty line. Over the years since I've watched Bob Woodbury deal with social class and class segregation issues in his official university role in Maine. And when President Marx delivered his speech on socioeconomic fault lines in higher education, it occurred to me that a seminar on the topic featuring these two educational leaders would be perfect for this weekend.
Needless to say, we did not anticipate the avalanche of media coverage on the subject of social class in America, most recently in the series in The New York Times. But in January, Adrian Wooldridge, of The Economist magazine, wrote what we all agree was the seminal article on the subject, at the time, and the most provocative, and to kick off the discussion I'm going to summarize that article now to provide some background. Adrian's article appeared in the December 29th issue of The Economist in 2004, and you can see what he said on the screen.
As you walked through the room you saw the sign, is American meritocracy in trouble, Adrian asked. The growing body of evidence suggests that the meritocratic ideal is in trouble in America. Income inequality is growing to levels not seen since the Gilded Age, around the 1880's. And then he provided us with some facts and figures. Between 1979 and 2000, in the growth of real income, the bottom 20% of households saw a 6.4% growth in real income, the top 20% of households a 70% growth in real income, and the top 1% of households a 184% growth in income, and as Adrian pointed out, the higher you go, the faster the growth.
Top 100 CEOs in U.S. corporations, in 1975 they earned an average of $1.3 million, or 39 times the average worker pay. In 2005, the average salary for the 100 top CEOs in America was $37.5 million, 1,000 times the average worker pay. In 2001, the top 1% of households earned 20% of all income and had 33.4% of all net worth. Mr. Wooldridge in The Economist pointed out this was the largest aggregation since pre-depression days, and that in the past couple of decades have seen a huge increase in inequality in America. And then he pointed to what he called the growth of social sclerosis among both political parties. The Democrats nominating John Kerry, the richest man in the Senate full of plutocrats, Boston Brahmin ancestry, education St. Paul's and Yale Skull and Bones. Previous to that, Al Gore, son of a senator, political aristocracy, education St. Alban's and Harvard. On the Republican side, George Bush, grandson of a senator, son of a president, a Yale graduate, a Harvard MBA, and Skull and Bones.
And The Economist came to the conclusion that elites in this country were perpetuating themselves and said that America was beginning to look like imperial Britain. In the entertainment industry, Wall Street, students in elite institutions, and, as mentioned, the political community. And they added, the United States risks calcifying into a European-style class-based society. They reported a study from Thomas Hertz from American University in Washington of 6,273 black and white American families over 32 years. In the poorest fifth, 42% of those families stayed where they started, 23% moved to the next to bottom group, and 6% made it to the top fifth.
And then in the headline that may aggravate some people, The Economist had the headline, "Pushy Parents, Driven Brats." Said the U.S. elite live in a competitive universe amongst themselves, only a tiny sliver of society is competing for admission to schools like Amherst and not the full range of society. Upward mobility is increasingly determined by educational level. He added that America's elite colleges and universities are reenforcing educational inequalities. Three quarters of the students in the top 146 U.S. colleges come from the richest socioeconomic group; 3% come from the poorest group.
In a debate with Harvard, The Economist got into this fight. They noted that, at Harvard, the median family income for students on financial aid is $90,000. The average estimated Harvard undergraduate's family income, no documented figures because Harvard refused to provide it, The Economist estimated $150,000 as the average undergraduate's family income not on student aid. And came to the conclusion that America's great universities are increasingly reenforcing, rather than reducing, these educational inequalities.
They then proceeded to attack the admissions procedures at elite colleges. Under a headline of "Flawed Admissions Standards," affirmative action more likely to benefit sons and daughters of those already achieving, in Ivy League admissions, legacy admissions, legacies make up 10-15% of every class, and they added, the students in America's places of higher education are increasingly becoming an oligarchy, tempered by racial preferences.
As the flood of articles on the subject came in during the time we were preparing for this seminar, this quote, from The Washington Post. "The mostly middle class academic stars who get into Amherst have all the motivation, family support, and academic skills they need to get a degree, and most of them do it in four years, not six. The less affluent and less self-confident students who go to Cal State Los Angeles of Texas State San Marcos often have families to support, full-time jobs and other distractions that make it less likely that they will ever walk across a university stage in cap and gown."
So, what do these trends mean for Amherst and other elite colleges, the enterprise of higher education as a whole, and the role of higher education in 21st century America? That is what our panelists are now prepared to discuss, and first, it's my great pleasure to introduce my classmate, Bob Woodbury.
Well, if anyone felt they were to go to sleep at this point, Dick sort of got things stirred up a bit.
Let me begin by taking note of Tony Marx's leadership on this issue. Some of you probably either heard or saw his commencement address a year ago, and other speeches he's given, and the topic, just frankly, in the last few months, has become hotter, and you see more of it. The book I brought with me--Bill Bowen, former president of Princeton has just come out with a book about a month ago dealing precisely with this issue. Some of you saw the series in the New York Times on class and equality, and Tony's one of the most prominent people in bringing that to our attention and helping us think through how we might address it, so I just wanted to note that at the beginning.
I'd like to make four points and then Tony's going to follow with a focus more on Amherst, and then we will open it up and have some comments.
The first comment, and it comes right out of what you've just seen is, that higher education in the United States, in both the private and the public sector, is highly stratified by family income. The more wealthy go to the wealthy, elite colleges, middle class Americans go to the range of state colleges and universities across this country, public universities, and community colleges are mostly populated with the lowest income groups in America. Just to repeat again--it's not up there--The Economist's statistic, which is widely quoted and used, which is if you take the 146 most competitive colleges, that's taken from Barron's, the 146, about three quarters come from the top socioeconomic quartile. Only three percent come from the bottom quartile in terms of family income and family in college--or into college. The economically disadvantaged are 25 times less likely to be found in elite colleges than the economically advantaged.
But I think it's important to point out, looking at the country as a whole, this is a public sector phenomenon and not just a private sector phenomenon. At the 42 most competitive public universities, 40% of the students come from homes with family incomes of $100,000 or more. At the University of Michigan, there are more students with families that earn $200,000 or more than there are coming from families that are at the median in America or below. The most startling one, and I hadn't realized this, I'm not even sure about it, at the University of Virginia, John Casteen, the president, claims that only 8% of the student body comes from the median or below, at the University of Virginia--we're talking about a legend public university. And I was also, I mean that was a hard one but I think it underlines what what's true at Michigan, the University of Virginia in numbers. So it's not just a private college phenomenon. The public sector, which is where three quarters or more students go, that stratification is already occurring there.
The second comment I'd like to make is that this stratification has grown increasingly rigid over the last twenty or twenty five years. I think some of us have sort of been lulled to sleep on this because we have become more diversified racially and ethnically, but we, under the radar screen, almost, this fact of income stratification has developed. The New York Times article said, at the 250 most selective colleges, that's public and private, the proportion of students from upper-class, upper-income families has grown, not shrunk. So in other words it's going in that direction. One of the best books on admissions and how this is going is done by a couple people we know at Williams College, and they say there's no question, the forces are aggravating this distribution of the rich for the rich and the poor for the poor that's happening all around us.
Let me cite a few examples of why this is happening and some of the forces that are making it occur, or contributing to it. And here's a case that was in the New York Times in April. It wasn't Amherst College, I know that much about it, but I don't know what elite college it reports. But here gives you a sense of a piece of this. On the director's desk--the director of admissions--was looking at the folders for two applicants. They have almost the same credentials--this is this year--they have almost the same credentials, but one is just a little better than the other. She has a 4.2 grade point average, the other has a 4.0. She attained a combined score of 1580 on her SATs, the other only 1440. Her family, the first person, has an annual income of $500,000 a year, the other's is only $30,000--single parent, $30,000. Now, twenty years ago, they both would have been accepted, the first one would have gotten no aid at all, and the second one would have gotten a free ride. As the article points out, that's not what happened. The person, the woman that came from the family with $500,000 or more--in order for the college to be competitive and compete with other merit awards that were being given, gave financial aid to the woman with $500,000 income or more. That left less money, and a poorer package, for the student at $30,000 income and below. Which points to what some of the forces are that are going on that are aggravating this.
If you also look--let me suggest a few other factors. Today, I think it's arguable, that institutional aid, in other words, not what's coming from the government, institutional aid at colleges and universities today, more is going on the basis of non-need than on the basis of need. It's happening in the private sector where we hear the term tuition discounting--that's a way of attracting students who wouldn't merit financial aid otherwise. Or in the public sector, you see more and more public universities, particularly the research and land grant ones, that are using money as a marketing tool by calling it a merit scholarship but not giving it on the basis of need and allowing more to go to people as a strategy.
Cost of attendance, as a percentage of family income. Here's another basic underlying force. For poorer or low-income students, the relationship between income and college tuition, college cost, the cost of college has greatly increased in percentage of income. But for the top quintile, the most affluent, in fact, the cost of going to college, the tuition, has dropped slightly in the last twenty years. Just ponder what the effect of that would have. SAT scores, of course, it's worth noting, are highly correlated to failing incomes, you might ponder what the implications of that are, or is. But the other thing is in the public sector, public funding, what is sort of not talked about, in the Pell Grant, which is the basic building block of financial aid, has not kept up with costs of college or even with inflation. In addition, this year's proposal preserves the Pell Grant but eliminates virtually every other program that gives financial support to lower income students.
If students who were less affluent went to a college like a community college or a state college and had the resources directed to their education that was true at the more elite colleges, you might not worry about it too much. But a study done a couple of years ago by Gordon Winston at Williams, pointed out that the average Williams student spends $26,000 going to Williams, that's after you give financial aid, so $26,000. The amount spent on a student is slightly under $75,000. I can assure you that's multiples of what supports the education at a regional public university or certainly at a community college. So there are a variety of factors that are aggravating these forces and making them more rigidified and more hierarchical. One of my favorites is the role of U.S. News and World Report in other ratings systems, but that's for another speech. But it's simply to say it's many of the indicators that U.S. News and World Report uses aggravates the situation much more than it helps anyone at making a decision.
Third, third point I want to make. One: the hierarchy exists. Two: that forces are aggravating and making it worse. Three: these trends are bad for our country. Bad for higher education. And I think questionable and bad for places of elite colleges like Amherst. The life-long premium, as The Economist pointed out, for people who go to elite colleges, is growing larger. There are other aspects of the issue that I think are bad for the whole idea of opportunity in this country. I think we've probably gone backwards in the last twenty five years. When we made the promise with the GI Bill, and the Higher Education Act of 1965, which really said, 'We're going to make a commitment to make it truly an opportunity, a society,' we've gone backwards on that commitment, I think, in the last twenty five years.
Well, is there anything we can do about it? Let me just make one other point about the, what I think is difficult and aggravating about the whole question of an education under these circumstances. I have an article. It was written by a sophomore at Bates College in Maine, it was published in Maine, and it talked about another dimension of this problem. And it said, and I quote from the article, this is a woman who comes from a family income of $30,000, single parent, "At Bates, and most liberal arts colleges, I'm an anomaly. As the poorest person in almost any room, I'm also the person most offended by my peers' barrage of trailer trash, rural incest, and ghetto jokes. Derogatory language about poor people is acceptable in circles where racial and sexual jokes are no longer politically correct, even at Bates. I sit in classrooms where it's difficult to have discussions about welfare policies. It's because students will not acknowledge knowing anyone who is, or has themself, been a recipient of government assistance. I listen to conversations where students blindly say they are not rich, because their families only earn $170,000 a year." Look, there are questions that are educational, as well as democratic, social, on this regard.
Finally, are there answers to this? Well, I think we can talk about this later. I think there are. I think it brings into questions of federal policies, state support around the country to higher education in your states, what's going on in elite colleges. I think there are many questions to ask but I think there are some solutions. Some of them are not--are very intractable. The extent to which much of America now is segregated, in more affluent communities, in places where school systems and social circumstances are very different, those are very hard to deal with. But there are things that can be done, and I think we will get to that and talk a little bit about it later.
But I'd just like to end my comments by saying, at one level, Amherst College is 1/100th--has 1/100th--of the student body of the United States, a miniscule piece. But Amherst has a platform, which Tony has been using, which is extremely important, and far beyond it's numbers. Thank you.
Welcome. First I want to thank Dick and Bob for organizing and joining in this discussion with this important topic. I also--let me make a few very quick reactions to the slides that we started with. The first is, we don't have time for this. It's not really the subject today. But the slide that showed that the bottom 20% is up 6.4% in real-income growth over the last thirty years while the top 1% is up 184% raises one of the most fascinating and difficult issues of social science, which is what matters to people if you are at the bottom of the economy? Are you paying attention to the fact that Bill Gates is getting farther and farther away from you, or are you noticing, and assuaged by, if you will, the fact that you can actually buy some things or have forms of life that you didn't previously think you could have. That is sort of the, if you will, the central question of social mobility and peoples' reactions to it, the politics of reactions to it, that the country now faces.
Beyond that, I just want to point out a couple things. One: yes, of course, the students that are applying to Amherst and places like it is a tiny sliver of society. We're talking today about the economic reasons for that, though, let's just be honest, no matter what we did on the economic front, the fact is, we'll always be a tiny sliver, both in terms of size but also because Amherst College and its peer institutions will never be representative, should never be representative, of the country, or of the world, in respect to academic talent. We will always be a tiny sliver in that sense.
The other thing, of course to note, is that for all the problems of economic disadvantaged coming to a place like Amherst, we are not the only--the reasons are not simply lodged here, nor are the solutions fully lodged here. Much of what we reflect in terms of our economic makeup is the disadvantages in terms of educational preparation leading up to college, which is another subject, a deeply impacted one in American social and educational policy.
And lastly, I just want to correct what I think is a misimpression given by the slide on affirmative action with the suggestion that minority students come from more advantaged backgrounds. At the entering class at Amherst College, our African American student body that will be joining us is 61% percent on grant aid compared to under 50% from the population as a whole. So that statistic, by itself, tells you that we shouldn't be too quick to jump at affirmative action, and I hope that the discussion today doesn't leave you with the impression that we're pitting the issues of economic justice and access against those of racial minority, geographic, or anything else. The fact is I believe the College is and should be committed on all those fronts.
That said, let me also start the conversation on Amherst by saying that within our peer institutions, within the institutions that Bill Bowen has looked at, the Ivies and the Little Ivies, the places that we compete with most directly, other than the state or public institutions, there are some great ones in the land, Amherst College has nothing to be ashamed of in this regard. Our percentage of students who come from the bottom end of the economy, are on Pell Grants, for instance, is the highest amongst out peer institutions. That is a source of great pride for us, as it should be, though the fact that I have been talking about this issue and that I'm happy to talk about it today, and in any venue, says that even though Amherst has taken a leadership position in this and in so many other regards, doesn't mean we should be complacent. It means, I think, that we can still do better, and can provide the kind of leadership that Bob suggested.
Let me take a breath and ask my colleague if we could turn on the overhead and simply demonstrate for you what Amherst's current situation is. This is not a perfect slide, but it gives you a snapshot of the current distribution of our students in terms of the economy. It says--it measures two things. One is distribution of students in the United States of America who get 1420 or above on the SAT. I'm not suggesting that's a perfect measure of academic quality, but it is the only measure that we have that goes across the national spectrum. And what it shows you is, again, I think largely because of inequalities of preparation and not because of differences of innate abilities as others might suggest, that the distribution is not even across the economy. So, what it says is in the top quintile of income in the United States, 46% of the students who get 1420 and above, which is roughly the average SAT score at Amherst college, are in the top 20% of income. That's that bar, and it distributes down, not terribly surprisingly.
The next thing to notice is Amherst College. In the top 20% of income, our student body is roughly 76%--this is at a college that's 50% of its students on aid, spends $20 million on aid, and does put a thumb on the scale, to use Bill Bowen's phrase, to try to credit that student as described by Bob who comes from disadvantage, and yet we're still 76% from the top and that leaves relatively little to distribute. You will notice, as a result, we are even less proportionally represented in the fourth quintile, in the third quintile, in the second quintile, we are slightly over-represented compared to the national distribution in the bottom quintile, but there the numbers are almost infinitesimal.
So, that is, very simply, the current state of affairs at a college that has paid a good deal of attention to this issue. It is also, of course I should note, in terms of Bob's comments, this is a college that does not engage in merit aid, that uses full need-blind admissions, we're one of a handful of institutions that is able to proudly maintain that principle. And yet, the distribution of the students across the economy is wildly misrepresented. I should note, if I put Harvard or Yale or Princeton or any of our peer institutions up on this chart, you would, I think, be even more amazed to see that they're even more disproportionally malrepresented in the top twenty percent of the economy.
This raises, I think, three questions that I'd like you to think about, and I'm trying to ask everyone at Amherst to think about. One is not a question, it's simply a statement. I believe this chart, by itself, says something is not working. I think the chart speaks powerfully in that regard. It says that we are not able to attract the most talented students regardless of ability to pay. And that means that we cannot do our job of ensuring the quality of leadership for this society and for the societies beyond the United States, because the basic belief that I have and that I think Amherst has, is that you need the broadest possible pool of applicants and of students to ensure the best quality of students coming to Amherst and providing leadership in the future. And if we have a constraint, economically, then we cannot claim to be doing everything that we aspire to be doing.
So then the questions are the following: What should the distribution on this chart look like? Do you believe that Amherst should look like the American distribution of students at the high end, so 46% of the top 20% of income? Should it look somewhere between 46 and 76, and distributed accordingly? Should it look better than the national statistics? That's question number one.
Question number two is once you decide what you decide what you're after, how would you get there? And there are two components of that. One is outreach, which is, there are students who come from economic disadvantage who don't about Amherst, who don't come from backgrounds that know about places like Amherst, who don't think they can afford to come to Amherst because they see our sticker price, and the current price of a year at Amherst is roughly 60% of the median family income in America. So if you don't understand how the financial aid system works, the sticker price in itself will scare you away. Never mind questions of not knowing about it, or whether you feel at home or feel like you would be at home at an institution like this.
So there's questions of outreach, but there's also questions of financial aid, which is, for all of our efforts, and as to say, Amherst has nothing to feel badly about, compared to our peers, but it is possible that part of what you see reflected here are the effects of financial aid, and there are two ways to break that down. RIght now Amherst is proud of the fact that we do not expect students in the bottom two quintiles to do practically anything in terms of loans. So if we're scaring students away, financially, in a way that we don't intend to do, then if you want to go after the people in the bottom two quintiles, where the numbers are going to smallest and therefore it's going to be hardest to find those students, you can't do it by changing the loan package. Those students don't get loans. They get grants. The question then is, can you do more in the way of grants, or reduce parental contribution, which is exactly what Harvard and Yale announced they were doing this year. They took the blunt instrument of saying, if you're under $40,000, so roughly in the bottom two quintiles, there won't be any parental contribution. For us there's already no loans, so that would be an explicit financial aid policy aimed at those bottom two quintiles.
It would be a different policy if you were aiming at quintiles four and three. There, the parental contribution is still a barrier, but those are the folks who get relatively higher portions of loan packages. And the question, the equity question that that brings up, is, is it fair for a wealthy student to come to Amherst, to be subsidized by the endowment by close to 45%, and to leave Amherst with no debt, while a middle class student in quintile four or three leaves Amherst with significant debt. And if you want to go after that problem then you have to go after the question of debt. So different policies, different policy levers will address different aspects of this particular problem.
Unfortunately, that makes it sound like the whole problem is one of money. And don't get me wrong, we're talking economic class and access here, so unlike some of the other social problems, this one is pretty closely connected to money by definition. But it is also, as I've suggested, there is a social problem, what people think, from the bottom four quintiles, think about a place like Amherst, whether they belong here, whether they know how it works, whether they've even heard of it. But there is another issue which I want you to think about because I'm thinking a lot about it. Let me give you an experiment, a little mental experiment. Imagine I've just given this very compelling speech, you have to imagine that part, and Howard Hughes walks in the door and says, "You know, you're right, this is outrageous. I'm writing you a check for a billion dollars, I've just doubled Amherst's endowment, you don't have to charge tuition anymore, you can go after whoever you want. Issues of economic access, of pricing, etc., financial aid, I'm just going to wipe those away."
First, there is of course, it's hard to imagine that Amherst wouldn't still have roughly half its students come from economic backgrounds that could afford to pay some significant part of the cost of coming to Amherst, and you'd have to wonder, as a student of social justice, whether that was the best use of those funds. But let's take that issue and set it aside. Imagine you could solve that problem. You'd still be left with what I think and Bob suggested as much is a compelling issue for us to think about at Amherst which is if Amherst could afford to do much better than it is currently doing, even though we are already doing better than all of our peer and competing institutions in the private sector, would it be necessarily the right thing for us to do? The fact that Harvard and Yale can afford to do what they did this year doesn't necessarily make it right.
The reason why I ask that question is what does it do to the higher education system of the country as a whole if the institutions that have the resources or the access to resources to address this problem more rigorously do so, cutting themselves off from the rest of higher education? In other words, I think I'm going to raise the standard of what Amherst has to address. It's not simply addressing our own issues of ensuring access and opportunity and talent which I believe, fundamentally and believe is our fundamental responsibility, but because we are leaders in higher education, because the rest of the higher education does and should look to Amherst for leadership, the question is, just because we can afford to do it and maybe a handful of other institutions in the country can afford to do it, what does it do to the rest of the system if we separate ourselves off, and there's a huge chasm between access to the Harvards, Yales, Princetons, and Amhersts, that's if we put our money where our mouth is, and everybody else, including some great institutions, that simply don't have the resources or the access to resources that the very top institutions do. Is that the leadership role that we want to play, and if that's a question that concerns you, where does that leave us? What is the responsible action for us to take?
And those are the questions that Amherst currently faces. Where do we want to be? What are the policy levers that we can use to get there? And how do we be sure--how can we be sure--that whatever we do is a responsible thing for us to do, not just to serve ourselves, which is of course important because we are serving the community, with access and with providing leadership and education, but in terms of serving higher education as a whole, as a community. And I would love your judgments and your thoughts to help us get through that issue which is very much on the front burner at Amherst College. Thank you.
I'm going to take questions now for our panel and I'm going to ask you to please identify yourself by name and class. Who's got their hand up? Right over here.
John McKenzie, class of '66. Approximately thirty five years ago, over in Michigan, I attended an Alumni Association meeting. What they mentioned at that time is Amherst didn't have any trouble getting people to apply who were in the upper classes or the lower classes. It was the middle class. And I wondered if you could comment on what Amherst has done in the past thirty five years to increase, I guess, knowledge of the college for the middle classes.
Tony, why don't you start with that, that's your question.
Well, I think Amherst...Look, the fact is, 6,200 people applied this year for roughly 400 attendee spaces at Amherst College. That number, by itself, suggests that Amherst's problem, at least in some grand scheme, is not lack of information or lack of applicants. In fact, you could argue that we are the beneficiaries of a frenzy in this society, which is partly fed by economic inequality, which is a frenzy to get into the best places in the expectation that that will increase your life chances, which is not an unreasonable expectation.
It is also true, as you saw from the graph that I had up, that we have a significant trough in the middle class, and I think that's not lack of information, I think that's money talking. I think that is the perception, the accurate perception, that even with the most generous aid policies in the nation, short of merit aid, which, for reasons Bob described, I think is remarkably inefficient to put it mildly, in terms of its distribution of help throughout society, that even with the most generous aid policies, it is still a stretch to come to Amherst if you are in the certainly $50 to $100,000 category. And there are great quality public institutions that may look to be less expensive. Now, they may not turn out to be less expensive, if you stick around and find out what our financial aid package is, but they certainly look to be less expensive. They also are rising in price, so this issue of access is getting harder for the middle class.
I think that is why we are having a very serious conversation of which this is a part. About what we should do, both in terms of outreach, as you asked, but also in terms of outreach through financial aid policies, and that raises questions about loans, it raises questions about parental contributions, but it also raises questions about being responsible members of the higher education community, and we do so, and not just serving ourselves, because we have the resources to do so. And that's the conundrum, if you will, that Amherst, being a moral leader, finds itself at the moment.
Okay, question here.
Sherm Katz, class of '65. Thanks so much for addressing these issues, President Marx. I'm sure my own inability, and my neighbors as well, I couldn't quite follow the last point when you were arguing, should Amherst do this even though there's so many others that can't do it. We can't control the fate of other institutions, but we can control what we do, and if we make a moral judgment that this is something we ought to do, shouldn't we do it, even if it may cause this chasm that you describe.
Let me ask Bob to help me, and I'll step in.
Yeah, I think there's--this is where the issue, I think, becomes complex, within the framework of particularly more elite institutions, which is what Amherst and Princeton and Harvard and Yale may be able to do puts an extremely difficult--poses an extremely difficult situation for the Bates', the Colbys, the Trinitiys, the institutions that are in a difficult situation. So the issue isn't just sort of setting the right pattern for the nation as a whole, it's also realizing you're part of an enterprise where what you do can have negative effects as well as positive. And I get that from talking to elite college presidents, not including Amherst, but I mean other places. That's one of the difficulties.
Let me be very graphic about this. Those of you know my biography will be able to figure out who I'm talking about. I had a conversation about this with a former president of an Ivy League institution who I used to work for. And he said, just because Amherst can do what Harvard and Yale is doing doesn't make it right for you to do it. He says, the fact that your competition is doing it may leave you with no choice. But the question is the following: if Harvard, Yale, Princeton, Stanford, Amherst, Williams, and two or three other places said we're free, or effectively, we're free, or moved in that direction, certainly Harvard and Yale have done that, for students whose families earn $40,000 or less, and the result is that those institutions put a thumb on the scale in terms of admission, make it financially possible to come, and steal the middle class and lower class kids from the Penns, the Browns, the Columbias, the Bates', the Oberlins. Right?
Then his question, a very poignant question, is what have you done? Right? You have diversified your student body by diminishing the diversity, small as it is, at the rest of the institutions that simply don't have the finances, the financial power to do what Amherst is doing. So, I think, the challenge that he raises, and it goes to the first question, is, it only makes sense, from a system point of view, to be more aggressive if you know that you're bringing into the applicant pool high-quality academic students who aren't thinking about any of these institutions, and therefore diversifying the applicant pool for elite higher education as a whole. That's worth doing. But if you're not sure that that's what you're going to do, if instead you're simply going to redistribute talent, according to money, then in effect you are doing merit aid, you are using money to buy the students you want, and you're not increasing access, opportunity, or the leadership base for the country as a whole.
And that's the challenge, right? How do we make sure that whatever we do, it isn't simply redistributing the scarce resources of talented, less affluent students. But increasing the pull, both making students think about elite institutions who aren't, and, I would say this is even more powerful, the final test will be can Amherst and Harvard and Yale change its policies and its access and its pull of less advantaged students in a way that signals to the country that we at the high end of higher education are looking for talent from across the economic spectrum and that we expect the public education system of the country to provide that talent in a way that it is not currently doing so, given the distribution of students. And that's the generation-long test that we currently face. It's a test that the Ivies and Little Ivies passed in affirmative action by demanding more qualified minority students. The supply of those students has increased over time. We need to do the same thing in terms of economic differences. That's the bigger challenge in front of us.
Dick Weissfelder, class of 1960. I have taught at the University of Toledo in Ohio for thirty years. We are a public university in the bottom quartile of public universities because by state law we're an open admission university that has to admit any student with a high school diploma from our state. Now there are two things today's questions said that affect us. One, what I would call the privatization of public education in Ohio. When I started, about 65% of the cost was paid for by state subsidy. Now it's down to 35%, roughly, and that puts a huge burden on the middle and lower classes. The second, to make teaching viable for our faculty and to give our universities some credibility, we have to attract good students, particularly to our honors program. What do we do? Every penny of university money for scholarship goes to merit scholarships regardless of need, to attract those students. The only money that's going to need-based is from the Pell Grants, the federal grants, and state aid. So that means the crunch for the middle class is enormous. From my perspective, we're not talking about the Colbys and the Bates', we're talking much further down in the pecking order, and if I think the elite schools draw away all of the good students from Toledo, not only does that enhance the brain drain from the Rust Belt, that is very much an impoverished part of our university.
I'd like to pick up on that, I mean, I understand exactly Dick's dilemma because this so permeates public higher education across the country. I mentioned the University of Virginia and how it's become very affluent institution. The other interesting this about the University of Virginia today is only 8% of its revenue comes from the state of Virginia. Here's a public university--8% of its revenue. You could try Michigan, it would be a similar thing, but if you look across the country, this is a role for leadership from the privates as well, you look across the country, a steady decline in public support, taxpayer support, for public higher education is aggravating it everywhere. It's being squeezed out by Medicaid and a variety of reasons, but there is a real limitation where the publics are being privatized in some cases--they're very private, with legislative harassment still around--or they're public, devoting fewer and fewer resources where there are difficult tradeoffs. That's led, in the competitive market, it's also led many to get into the merit. How do we--we establish an honors college, because you want to attract some different students. Financial aid flows there. I think the poverty that we're moving toward in the funding of public higher education, including Pell Grants and federal aid, is the real disaster that's going on in the country. That's the real question, and one where I think Tony Marx and presidents of the elite group can be enormously helpful in saying, that's a bigger problem, and we ought to be addressing that one too.
Let me just agree with Bob and say that the scariest thing we face, I say as an educator, and it would be true wherever I was in the educational system, is that if this country diminishes its investment in education and its commitment to providing a quality of education across the economic spectrum, then the consequences for our society, for our economy, for our democracy are as dire as you can imagine, all the more so in the global economy. That's number one.
Number two: the scenario that you describe is, if you will, the nightmare scenario, and it's one that I think we run the grave risk of coming closer and closer to. Which is, a small number of institutions may be able to maintain full need, need-blind, be proactively aggressive in looking for a more economically diverse student body, but it will be a tiny portion of America that will benefit. Not insignificant, because of the leadership value that Amherst or Harvard bring are not insignificant, but it will be tiny.
The next group of the higher education spectrum will resort to merit aid, will buy students, which will make less resources available for those students who really need it financially. The next sector, another big jump, will be those places, public institutions, that are charging too much for people to be able to afford, and people are scrambling, going into debt, trying to make that possible. And a huge chunk of the population will end up going to the University of Phoenix, to colleges that are virtual colleges in effect, because those are the only ones that will be affordable. We know from our Amherst experience that the quality of education that you can do through technology, which is improving greatly, is nothing compared to what happens around in classrooms with twelve students and a faculty member.
And if that nightmare scenario, which we're moving increasingly into, develops, then we have an educational system that results, that rather than be the solution to social and economic stagnation, rather than being the solution to growing inequality, becomes a part of the reenforcement of the economic inequality and stagnation of this country, and again, the implications and consequences, I think, for the country, are dire in need, and that's true for Amherst even at the high end, of finances and privilege and power and influence. We're part of this society. We have to worry about these educational trends throughout the system.
As they say in the broadcast world, we've reached the end of the program. The next audience is outside waiting to get in. There is another panel here in five minutes that will address some of the same subjects, that Tony will be on. I'm sure you can go out for say five minutes and the crowd is outside the door waiting.
The Amherst education doesn't lead to graduates who take no very easily. The next panel is entitled "Privilege and Responsibility." I suspect some of the same issues will continue, so those of you who'd like to are welcome to stay on.