The Hidden Barriers of Education

PRINCIPLE: A quality education needs to be universal

The culmination of the modern knowledge economy is the college degree. On average, workers with a bachelor's degree earn about 65% more than those with only a high school diploma. College graduates take almost all of the world’s most desirable jobs. It’s the great equalizer.

So I want to start here.

Why is it that the best colleges in the world, whose mission is to educate people, pride themselves on how low their acceptance rate is? The more people they can reject, the better.

Indeed, the all-important U.S. News & World Report ranking of the best universities has embedded this into the very fabric of perhaps the most important “grade” that a university gets. The lower the acceptance rate, the more exclusive they are, and the higher the university ranks.

Desirability, like a Prada handbag or a nightclub with its velvet rope and long line, is in part defined by how many people are standing outside, not able to have this coveted thing. And so these bastions of education pride themselves on how many people they can not educate.

I had a conversation with our nanny the other day that struck a chord in me. She shared her experiences with the college application process. I was reminded of the harsh realities that so many young people face. "I had friends that were crying because their essays had to be perfect and they knew that everything depended on it," she confided. Even with an entire class dedicated to college applications, the pressure was overwhelming.

"There was no way that I could have asked my parents for help," she continued, her voice heavy with the weight of that admission. “The guidance counselor told me that there was no way that I would get into the schools that I wanted to get into, that they were for people like the kids of politicians who had connections." And it’s true. I got to meet the admissions officers.

As I listened, I couldn't help but think about the irony: Why do these institutions of knowledge puff up with pride based on how many young, hopeful, scared teenagers they can turn away? Those institutions whose purpose is to enlighten and empower the next generation seem to measure their success by how many dreams they can crush. The people are well intentioned. It's just the incentives that make for a system that leads billions of people standing in line outside the door.

It's a perplexing paradox that is at the core of what we must address to build a better future.

The book The Case Against Education argues that colleges have essentially become glorified recruiting machines. The hard part isn't the education itself - it's getting in. Once you're in, you've already proven your worth. On the other side, employers develop their hiring plans around which schools candidates attend. Goldman Sachs and McKinsey show up at the Ivies, harvest their cohort of smart young talent and go on their merry way to build their companies.

In this worldview, exclusivity becomes essential to the value of the degree.

People wonder why the best universities aren’t growing to accommodate the increased demand. In a normal market, when there is a lot of demand for something, people increase the supply. Harvard, with its 97% rejections, has increased supply by 0.15% per year for the past 50 years.

Why? There are many reasons. Like small batch chocolate, it’s hard to keep quality at scale.

But does that account for 0.15% growth? The core of it is this: universities maintain exclusivity to preserve prestige, as scarcity signals quality. For most people the university really has one job: to get you a job. The best universities need to be the best as recruiting agencies. If you “hire” them to get you a job, they have to deliver the best job. And in this modern world, the difference between the top 1% job is, well, the difference between being part of the 1% or not.

So, even graduating from Harvard, if 3% of people get in, I’m still competing to get that 1% job!

I remember graduating from Harvard and doing those interviews for internships. I’d show up in my oversized suit and a brown leather notebook to take notes, yearning to make an impression. Indeed, landing those jobs was the most important step to a bright future. Get into a top-notch job and I could have a million dollars a year and a nice vacation house in my future.

The pressure was palpable in those waiting rooms full of hopeful undergraduates. One in three of us - who have devoted our entire lives to getting into Harvard and thriving in an environment where everyone around you is the smartest person at the school - is going to get that 1% job.

Now imagine that Harvard doubled their acceptance rate. The number of jobs stays the same, but now there are twice as many people in that waiting room. Now do you start to see why it’s so important to keep Harvard small? It may be impossible to get into but it’s great for those who do.

If I’m “hiring” a university to get me a good job I want as few competitors as possible once I’m in.

The employers on the other side, meanwhile, are enamored with the idea that they are hiring the very best. As they say, “you’ll never get fired for hiring McKinsey,” and McKinsey will never get fired for hiring from Harvard. The harder it is to get into Harvard, the more likely you are to get an incredible employee when you sit in that interview suite with a room of people outside.

If I’m an employer “hiring” a university to find me the best talent, I want them to make it easy.

So we have a world in which the pinnacle of our education system is built on a scarcity mindset.

But here’s the thing: Harvard really wasn’t that good. The students were amazing. It did that so well. But professors were focused on their research, the university didn’t care about its students, buildings were rundown. Most importantly, students were unhappy. When I was there, I spent years wondering if I should transfer. I vowed never to donate a dollar to Harvard. I never have.

I feel guilty saying that, but that is how I felt. There is a better model. And it already exists.