Does Anyone Win When Colleges Compete?

Competition is supposed to be a good thing.

Sit in on any econ 101 class and you’re bound to hear the basic theory that competition is beneficial for consumers because it leads to innovation, better services, and, perhaps most important of all, lower prices.

But tell that to anyone who has gone to college during this century. Costs for both public and private institutions have risen astronomically over the last 50 years according to the National Center for Education Statistics. Yet, over this same period, competition has only increased, with colleges and universities doing everything they can to attract students, including offering enhanced financial aid packages, slashing tuition prices, and constructing more and more elaborate amenities, like lazy rivers and climbing walls.

And in this fight for students, no one is winning. Even with incentives and price cuts, students are still drowning in debt after graduation. Many colleges themselves aren’t much better off as they borrow more and more to invest in facilities and technology, hoping to boost enrollment, while at the same time turning to cost-saving strategies, like hiring contingent labor through part-time and non-tenure track faculty. And some schools simply have had to call it quits — 861 institutions closing since 2004, according to the Hechinger Report.

For historian and Ed School Professor Julie Reuben, these decades of excessive competition are a warning. In the pursuit of institutional advantage, she believes colleges have lost sight of their original purpose of creating, preserving, and disseminating knowledge for the good of society.

And she’s worried it could bring the whole system down.

A History of Competition

Today, much of higher education is predicated on gaining a competitive advantage, with colleges and their leaders focused on raising endowments and defining their distinctive qualities rather than, say, debating what higher education’s purpose should be.

Reuben is worried that this trend could threaten the entire higher education system. Already, the undergraduate degree, like the high school degree before it, may be losing its financial value, and more college graduates are now having to turn to a master’s degree to compete in the job market. According to the U.S. Bureau of Labor Statistics, employment in master’s-level occupations is projected to grow almost 17% from 2016 to 2026, the fastest of any education level.

“If these trends continue, it will be disastrous for all efforts to use higher education as an instrument of social mobility and a means to greater social equality,” Reuben wrote last summer for The Chronicle of Higher Education in her opinion piece called, “Hypercompetition is Harming Higher Ed.”

Competition among colleges is certainly not new. From as early as the 19th century, colleges and their students and alums have engaged in some form of “institutional boosterism,” Reuben says.

The earliest form of college competition came in the form, naturally, of athletics. But this student-driven school pride was a much more benign version of competition than what would eventually arise as colleges and universities began to seek to distinguish themselves as radically different institutions.

“In the 19th century, when colleges and alumni are organizing and doing college boosterism, the colleges were all very similar,” says Reuben. “They had a similar curriculum, and they conformed to a cultural understanding of what higher education was.”

That all changed in the early 20th century when new reforms encouraged experimentation in the higher education world. While differentiation within higher education offered many advantages, the stratification of the sector, which began after World War II, undercut some of the benefits.

“During the war, the government relied on universities for research and training,” Reuben says. “This ended up funneling large amounts of money to a small number of institutions. By the end of the war, those institutions had better facilities and other advantages that allowed them to distinguish themselves from the rest of the field.”

Suddenly, schools wanted to become like those “leading” institutions, imitating undergraduate liberal arts programs, creating graduate programs, and encouraging faculty research. That dynamic would remain strong until the 1970s, when an economic downturn forced many schools to shift their focus to vocational programs for undergrads. A clear hierarchy emerged, with elite research universities on the top, selective liberal arts colleges at the next tier, comprehensive universities and colleges below them, and community colleges on the bottom. At the same time, competition between institutions in the top tiers intensified.

“Over time, the dynamic shifted from everyone trying to become like the leading institutions to competition among relatively strong institutions. Establishing and maintaining a reputation that would attract applicants and other resources became a major preoccupation of institutional leaders,” Reuben says.

To set themselves apart, colleges borrowed from the playbook of private corporations and sought to establish “brand identities.” Features common across higher education have become the legal property of institutions. “The first-year college experience,” for example, was registered by the University of South Carolina. “Student life” was trademarked by Washington University in St. Louis. Most recently, The Ohio State University successfully trademarked “The.”

With the advent of college rankings by U.S. News & World Report in the 1980s, competition reached another level. By the 1990s, colleges realized they could use incentives like merit aid (based on extracurriculars and academic achievement) and other financial aid discounts to attract more students, in turn raising their rankings and their reputations.

“Despite an abundance of research demonstrating that merit aid favors students from upper-income families, most schools abandoned need-only financial aid policies in order to compete for students with high SATs and GPAs and to achieve high yield rates,” Reuben writes in the Chronicle piece.

The use of financial aid to attract students is still strong today. Recently, Princeton University made itself free for families earning under $100,000. Practices like this are good in that they “make once-exclusive universities financially affordable” for more families, Reuben writes, but adds that these policies don’t address the real problem of rising tuition across the sector, where the price tags of lesser-known colleges remain inflated just to stay competitive with the perceived value of elite institutions.

Colleges aren’t entirely to blame for all of this. As Wellesley College economist Phillip Levine has written in publications like The Hechinger Report, consumers of higher education, specifically students and their parents, are willing to pay more to attend some schools over others, providing those coveted schools with “tremendous market power.”

Was all this inevitable? According to Reuben, no.

Once upon a time, colleges actually tried working together. When the Higher Education Act was first proposed in the 1960s, one of the major debates was whether to send aid directly to institutions to cover expenses (and in turn lower tuition) or to students. Congress chose students, and in doing so, incentivized institutions to compete for students and their financial aid dollars.

Still, many leaders in higher education were against using financial aid for student recruitment. In the 1950s, 23 Northeastern colleges — including the Ivy League and MIT — formed what was called the “Overlap Group” to coordinate scholarships. This meant that a student applying to multiple institutions in the group received comparable financial aid packages. This practice also helped keep tuition costs down and limited resources being diverted from low-income to high-income students.

In 1989, everything changed. The U.S. Department of Justice launched an investigation into whether the Overlap Group violated antitrust laws. Two years later, they brought a civil suit against MIT and the Ivy League members. The Ivies agreed to stop sharing financial aid information. MIT went to court and lost.

To this day, the Ivy League and others remain worried of being accused of colluding, “and it interferes with what could be healthy collaboration,” Reuben says.

Enter Admissions

Reuben sees the Overlap Group as a missed opportunity for the sector as a whole to push back against the narrative that higher education is a private good, rather than a public good, furthering a false belief that “competition is the best way to ensure lower prices” of college tuition, she says.

“We’ve definitely seen this era of increased competition hasn’t led to lower prices,” Reuben says. “The situation with tuition and costs has gotten worse, not better.”

Reuben wishes that schools would be more aggressive in challenging government legislation and lawsuits that seek to paint cooperation among schools as collusion. But more than three decades after the Overlap investigation, a very similar story has played out, this time in college admission offices.

The National Association for College Admission Counseling (NACAC) was founded in 1937 in Virginia. Comprising nearly 30,000 counselors from the secondary and postsecondary level, plus admission and financial aid officers, one of its main purposes is to regulate the recruitment of students.

Included in the many provisions it lays out in its code of ethics is that schools cannot offer incentives to students applying early decision and they can’t poach students once they have committed to another college.

In 2019, NACAC removed those rules in response to a Department of Justice investigation into their organization and whether provisions banning incentives or poaching actually violated antitrust laws. By doing so, the NACAC avoided a lawsuit, and the Department of Justice said it had protected families from what it perceived as colleges colluding to take away student choice.

But in doing so, it has opened the door to even more serious ethical questions about how far colleges will be willing to go as they compete for students.

Tim Butterfield, Ed.M.’20, is the admissions marketing and communications manager at Grinnell College, a private liberal arts school in Grinnell, Iowa. He’s worked in higher education for nearly a decade and says the NACAC decision has been one of the biggest changes to the field he’s ever seen.

For years, schools couldn’t offer incentives to certain admissions rounds, but now, “we can tell students they can get an automatic scholarship or preferred parking or room lottery” for applying early decision, he says.

It’s impossible to talk about competition without talking about early decision, where a student applies early in the process and if accepted, the decision is binding. Early decision has risen in prominence in the last few decades, so much so that nearly half of the incoming class at many colleges is composed of early decision applicants.

The practice began in the 1950s, when Ivy League admissions officers would essentially hand pick students from secondary feeder schools. In response, smaller New England colleges began offering binding early decision options in order to compete.

Today, early decision, in many ways, makes an already difficult decision for young adults even more stressful. “If you’re considering a top-ranked school or a selective school, early decision is really the only way to go if you want to have a chance,” Butterfield says. Over the last five years at Grinnell, their average early admissions rate is nearly 60%, helping to drive the regular rate of admission to below 15%, and it’s only getting lower every year.

Schools push for early decision for another reason. The more schools a student applies to, the lower a college’s yield rate — the percent of students who choose to enroll after being offered admission. Yield is an important statistic for admission departments, and while many schools are seemingly becoming more and more selective, it’s partly driven by the fact that it’s getting harder for admissions officers to predict where students are actually going to go.

“Part of it is students are applying to more colleges,” says Sarah Fischer, Ed.M.’11, assistant vice president of admissions at Grinnell. Fischer says that trend has been happening for the last decade but particularly over the pandemic. With students more easily able to just check the box of applying to colleges with tools like the Common Application, admissions officers don’t know whether they are the first choice or the 15th choice for a prospective student.

A higher yield also carries significant weight when it comes to rankings.

The annual rankings published by U.S. News and World Report have long been decried as a flawed system. But while some elite medical and law schools, including Harvard Medical and Harvard Law, have pulled out of the U.S. News rankings, very few undergraduate institutions have followed suit.

“Rankings are a tricky thing to talk about,” says Bill Prescott, Ed.M.’20, an associate director of admissions at Washington University in St. Louis, who says doing away with them isn’t as simple as some people believe.

“I think whether we like it or not, it’s part of the decision process. It’s been interesting to see the shift in law school and medicine rankings, but not every school can afford to drop out of those rankings. And rankings impact other things, like college credit ratings.”

Brandeis University’s director of admissions Rebecca Simons, Ed.M.’09, takes a more measured view when it comes to how the system works.

“We always say you shouldn’t pick a school based on rankings,” Simons says. “When I’m out traveling, I like to talk about rankings as picking a top-10 destination to travel. Say the number one destination is Aspen, but you don’t like skiing. You’re not going to go there.” That same approach applies to picking the right school.

While Simons recognizes that rankings carry a certain prestige that make them “great cocktail fodder” for school leaders and parents, she believes there’s been a real shift about how important the rankings actually are. “I am hopeful they aren’t going to be with us much longer,” she says.

While rankings might be too big to ever completely exorcise, many in the field agree they need to change. Trisha Ross Anderson, Ed.M.’10, college admissions program director for the Ed School’s Making Caring Common project, says she would like to see a turn “to some alternative ranking systems that looks at things that generally matter to kids and advance equity by sharing important information.” Recently, for example, the Department of Education updated their College Scorecard to help prospective students and families compare a broader and more diverse set of college data, including average debt loads for students, diversity numbers, and post-college earnings.

“We’ve been doing things a certain way for a very long time, but there’s an opportunity to shake things up,” Ross Anderson says.

Room for Collaboration

There’s another side to this story of competition. First, while colleges are certainly competing against their peer institutions to win over the hearts and minds of prospective students (and the wallets of their parents), Butterfield says there’s a counterweight to this rivalry.

“We’re not hoping any of those competitor schools are going to fail. We need all our peers to be successful and strong to maintain the value of the liberal arts and college experience. When our peers succeed,” he says, “we succeed, too. We just want to be in a slightly better position than the others.”

Speak to most admissions officers, and there’s a clear sense of the abundant collaboration that actually occurs between schools. Grinnell, for example, is part of a cohort called “8 of the Best Colleges,” which includes Claremont McKenna, Colorado College, Connecticut College, Haverford College, Kenyon, Macalester, and Sarah Lawrence. Twice a year, deans and directors of admissions from each school travel together around the country to present to families. Then there are Amherst, Bowdoin, Carleton, Pomona, Swarthmore, and Williams which formed “Six Colleges,” offering shared resources, a website that hosts a series of virtual events, and provides students a single form to get admission information about each school.

Smaller schools that are struggling have also thought about ways to join forces beyond a shared website or events. Last year, Ohio-based Otterbein University and Antioch University announced plans to affliate with each other to create a first-of-its-kind national university system, sharing graduate and adult-learner programs.

While Reuben says she hopes that merging and sharing resources becomes a more popular option among colleges, there’s also a hard truth that not all institutions will survive. But just because they close, it doesn’t mean it has to be an end.

Reuben cites the example of Wheelock College, a private college in Boston that opened in 1888. Wheelock closed in 2018 and merged with Boston University. Reuben says there’s a lesson from that example.

“They really thought about how they could keep the mission alive even if Wheelock itself had to close,” she says. For Reuben, the example also represents the kind of tough conversation she wishes more colleges would have, thinking less about how to differentiate themselves and more about how to serve students.

Many colleges are also trying to shift their thinking when it comes to admissions. The Making Caring Common project has been an influential driver in that process. Founded to help schools and families raise ethical children, the project added a new lens in 2016 when it released Turning the Tide, a report that called for a reshaping of the college admissions process to promote greater ethical engagement among high school students, reduce achievement pressure, and create more equitable opportunities for students traditionally unrepresented in college.

“We did a lot of interviews with parents and kids and learned that a lot of young people were seeing college admissions as a barrier,” says Ross Anderson. Through those interviews, Making Caring Common learned that students wanted to give back to their community, but felt they had to focus on getting higher SAT scores or taking more AP courses in order to get into college.

Ironically, that was not the message most colleges wanted to send, she says. “Although colleges care about scores and grades, they were telling us, we care about students as whole people, and we don’t want a generation that’s hypercompetitive or taking 6 million AP courses and doing nothing else.”

Nearly 200 college admissions leaders endorsed the plan, which offered concrete recommendations on new ways to evaluate students, such as taking into account a student’s home life if they are helping a sick family member or working to contribute to the family’s income.

“We have to be aware of the impact of our policies that trickle down,” says Prescott. “For so many families, they see this as such a high stakes part of a student’s life. That’s something we have to be mindful of, and advocating for different policies like what Making Caring Common is doing and how we measure success.”

Simons says, “At Brandeis, we did a deep dive with Making Caring Common and talked to our faculty about how they see success from students.” Looking more holistically at how students will be successful both academically and socially on campus has become a real part of the school’s selection process now.

While these shifts are promising, Reuben would like to see even bigger changes.

“I don’t think we want to go back to the first half of the 19th century where most colleges were identical in their curriculum,” she says, but 50 years of competition has come at a high cost. She wishes more schools offered a similarly strong and relevant academic core so that “which institution they went to mattered less” for students and families.

In that way, students could trust that wherever they went, they’d be guaranteed to “get an education to help them understand the world and participate as a democratic citizen,” Reuben says. And that, in turn, might change how colleges view one another.

“I would also hope that in this fantasy world of mine,” she says, “we could shift away from this focus on competing for dominance and survival, and really try to think together about purpose, mission, needs, and the best way to fulfill those things.”

Andrew Bauld, Ed.M.’16, is a writer based in New York City. His last piece for Ed. was about the Young Historians Program based in New York City