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Ivy League: rising endowments can do more to combat inequality

Donations from rich alumni and high stocks are sending US college endowments soaring. Largesse for ostensibly needy scholars is one result, granting them access to elite power networks.

The dirty little secret is that Ivy League schools may still be selecting students who come, for the most part, from relatively privileged backgrounds.

Earlier this month, Dartmouth College announced it would extend its “need-blind” admissions policies to international students on the strength of a $90m fundraising campaign. It already ignored family resources when selecting American students, guaranteeing subsidies for poorer ones.

The comprehensive cost to attend Dartmouth now touches $80,000 a year, in line with peer schools. Overflowing college coffers therefore have to support students defined in US parlance as “upper middle class”. In the UK and EU, that denotes status in the centre of a rather wealthier middle-class category.

Wealthy students tend to achieve high grades. Athletes and children of alumni get preferential access to elite schools. If you are smart, poor and unathletic, getting in is still tough.

Lex chart showing that elite admissions are falling

According to data from Dartmouth, its average financial aid package in the latest school year was more than $50,000 a year. Students from households earning less than $65,000 annually attend free. Federal data show the net annual price for students receiving financial aid at Dartmouth is $25,000.

Dartmouth’s own data show that 48 per cent of students now rely on financial aid. Some 57 per cent hail from public high schools, where tuition is free. Public high schools educate 90 per cent of Americans.

In 2017, economists published a landmark study based on data from the early 2010s. They found 38 universities, including Dartmouth, enrolled more students from the top 1 per cent of the income distribution than from the bottom 60 per cent.

Back in 2011, the median family income for a Dartmouth student was $200,000 per year, with a fifth of the class from families in the top 1 per cent of earners. The school says today, however, its community is more open than ever, describing a quarter of its class as coming from a “low-income” background.

Last October, Dartmouth announced that its endowment hit a value of $8.5bn after appreciating almost 50 per cent in the previous year. That allows for new initiatives to promote economic diversity and equity.

The challenge is still to make elite college classes resemble society more closely.

The Lex team is interested in hearing more from readers. Please tell us what you think of elite colleges’ efforts to widen admission in the comments section below.

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