Moneyballing College Admissions
A guest post by an old trader friend
Friends,
Today is a guest post by my friend Brent about college admissions. If it’s enlightening and maddening then you are reading it right. Onwards…
About Your Visitor to the Moontower
Hi, Brent here.
Recently, Kris and I have gathered monthly with another former colleague to discuss all things finance, trading, politics, kids, and life. A large portion of our time is typically spent trying to evaluate anything and everything under the lens of our collective trading experiences. Recently, we seem to be spending an inordinate amount of time talking about colleges and college admissions, primarily at highly selective universities.
A little background.
I’ve been friends with Kris from our SIG days in the early-aughts. I also happen to live across the Bay from Kris in Marin County, and we both attended Cornell as undergrads, although didn’t know each other then.
I unplugged my trading screens in early-2023, and embarked on a career in college admissions counseling. This move was not totally out of left field, as I worked at Kaplan immediately after college, and always suspected that I may return to that line of work post-Wall Street.
It’s from the vantage point of college admissions consultant that Kris asked me to write a post for Moontower readers. Although this is my work, I prefer to say I’m a quasi-expert on this topic – I say “quasi” because the randomness of the entire process disqualifies anybody from deeming themself a full-fledged expert.
But like trading, we can demystify aspects of the randomness by looking closely at the levers and incentives.
Let’s get to it.
The Higher Education Landscape
Higher education made front page news on a daily basis in 2023, and really since the 2019 Varsity Blues scandal. The headlines typically center around highly selective admissions, or, as Jeffrey Selingo titled his 2019 book, “Who Gets In And Why?” (If you have the slightest interest in this topic, Selingo’ s book is a must read). Most recently, headlines shifted to progressive campus politics run amok. But, soon enough, we will lament our best friend’s niece, who was the valedictorian of (insert elite suburban high school) with a 4.6 GPA, rocked a 1550 on the SAT, and was rejected from 8/8 Ivy’s. (She also was rejected from UCLA and Berkeley for good measure.)
The aforementioned student has become a rhetorical cliché of sorts, a prop at tony suburban cocktail parties or in Manhattan office towers. She is increasingly also a wedge in political debates over race-based and other “preferred” admissions policies. Terms such as “institutional priorities” or “holistic admissions,” are the typical euphemisms employed by university administrators to explain away the often difficult and impossible decisions that admissions officers face. Of course, all of this drives palpable fear (and loathing) among parents and students. Despite this, the fact remains that the vast majority of the 1.2mm applicants to American universities in 2022 want to attend the same 25 schools.
Recent discussions at our in-person Moontower sessions have centered on three key topics.
Is college still ‘worth it’, broadly speaking?
Is going to a highly selective college (and paying full price) ‘worth it’, versus attending a cheaper and/or less “brand-name” school?
If a student concludes ‘yes’, to #1 and 2, how should they optimize their chances of admission to “Brand Name U?”
For a detailed discussion of #1 and 2, check out Kris’s recent post The College Monopoly is a Tiger Trap, with a review of a New York Magazine article on the subject, along with a review of a recent Byrne Hobart The Riff pod. Additionally, scores of books and research papers have been written on the value proposition (or lack thereof) of college.
Broadly speaking, the answer to #1, for smart driven students, is “yes.”
The answer to #2 is difficult to generalize to the same degree, and is subject to more debate. The answer, in most cases, is “it depends.”
Several longitudinal studies indicate that the ROI of more selective schools, when adjusted for the applicants’ aptitude, is negligible. Perhaps, the best research on this topic is by Stacy Dale of Mathematica Policy Institute and Alan Krueger of Princeton, in their oft cited 2002 and 2014 studies, which I will link here:
Anybody who intends to embark on a highly selective college search should familiarize themselves with this research.
In this article, I will focus squarely on #3 -
How should students optimize their odds of admission to highly selective schools?
(Aside from common resume builders such as a 4.5 weighted GPA, founding a company, or coding an app?)
Playing the Admissions Game
A student’s college application typically consists of 5-10 key inputs, which admissions officers distill into a murky stew and promise to review under the guise of a “holistic admissions process.” Grades, course rigor, extracurricular activities, life experience, test scores, whether you are “an interesting person,” etc. All of these fall on the same side of the equation, and can look awfully similar across hundreds of thousands of students. And again, none of this is particularly interesting nor relevant at the Moontower- aside from perhaps, the enormously outsized impact of athletic recruiting of wealthy/white students to small liberal arts colleges. But, let’s save that for another day as well.
For now, let’s evaluate what has grown to become (arguably) the single most important factor in getting in: