What the College Admission Scandal Really Means

As usual, Americans lose their minds whenever money takes center stage, as it does in the college admission scandal. I mean that figuratively and literally, as in they go bonkers and then miss the main point, which in this case is that some people are willing and able to millions to send their kids to certain schools. That is good news, if properly handled.

The scandal is not without merit, of course, but the key problem is one of private emolument.
The admissions officers should not be personally enriched by the payments.
But their schools ought to be.
If you’re a statist, simply consider it a voluntary tax.
If you believe in the power of markets, it is just an instance of price discrimination.

But, some will surely protest, if college admission is based solely on the highest bidder, then only the rich
will be able to attend Elite U. Not so! If Elite U. only takes dumb rich kids,
it will not remain elite for very long. Unless it is sitting on a big endowment, it won’t last long accepting
only dirt poor geniuses either. The problem is simply one of optimization, of admitting some
rich dumb kids without having to water down the curriculum and some poor prodigies without breaking
the bank.

Most students will remain bright young people from a variety of socioeconomic backgrounds. And,
thanks to the Richie Riches’ fat checks, they will pay a little less for school and/or have a little better
experience.