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BUSINESS Monday 14 october 2019
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Liz Weston: Wake up to the truth about 'dream schools'

By LIZ WESTON nearly 30,000 college grad- cybersecurity . is going
NerdWallet uates found no correlation to come in at three times
Associated Press between a college's ad- the salary of someone
The college admissions missions rate and future job who graduated from Har-
scandal — which recent- satisfaction or well-being. vard with a soft degree,
ly led to a 14-day prison Earlier studies by the late you know, liberal arts, hu-
sentence for actress Felic- Alan Krueger of Princeton manities, whatever," says
ity Huffman — exposed a and Stacy D ale at Math- Hill, who also heads the
group of wealthy parents' ematica Policy Research nonprofit Educate to Ca-
obsession with getting their found students who were reer , which offers college
kids into the "right" school. admitted to highly selec- admission and outcome
Prosecutors say the fami- tive colleges but who at- data to families. "The skill-
lies paid bribes, faked test tended schools elsewhere set is what matters, not the
results and pretended their usually did just as well finan- name (of the school) on
kids were athletes to get cially. the diploma."
them into selective col- Elite schools did increase 'REACH' SCHOOLS CAN BE
leges. incomes significantly for RISKY
Unfortunately, many less black, Hispanic and low-in- Counselors and parents of-
affluent families also fall come students, and those ten encourage seniors to
for the delusion that some whose parents didn't grad- apply to "reach" schools,
schools offer golden tickets This April 2017, file photo provided by NerdWallet shows Liz uate from college, Krueger colleges where a student's
for their children's futures, Weston, a columnist for personal finance website NerdWallet. and Dale found. Another test scores, class rank,
says Lynn O'Shaughnessy, com. group of researchers, how- grades or other qualifica-
author of "The College So- Associated Press ever, discovered that high- tions are below the school's
lution." Whether it's an Ivy outcomes, including higher last year, Yale University (6, ly selective schools didn't average. The idea is that
League college or a high- dropout rates. University of Southern Cali- have a lock on helping even though the odds are
priced "dream school," too Here are the most impor- fornia (11% ) and George- disadvantaged students. against admission, students
many people believe cer- tant facts to know as you town University (14% ). Many of the schools that might get lucky.
tain educations are worth navigate the college ad- Looking at 2017 data, Pew increased opportunities Getting into one of these
endless effort, stress — and missions process and de- Research Center counted the most for low-income schools may not be a bless-
debt. cide how much to spend . just 46 schools with admis- students were much lower ing, however. Hill found
"Because somehow these MOST COLLEGES ACCEPT sion rates under 20%. Only cost public universities such that students in the bottom
are magical schools," MOST APPLICANTS 17 schools had single-digit as the California State Uni- 25% of those admitted typi-
O'Shaughnessy says, de- The frenzy around college admission rates. By con- versity and City University of cally get less generous fi-
scribing the fantasy. "If your admission — and the no- trast, 80% of the 1,364 col- New York systems. nancial aid packages and
child gets in, their lives will tion that it's hard to get leges and universities Pew MAJORS MATTER MOST are more likely to drop out
be paved with gold." into a "good" school — fo- studied admitted half or Parents mistakenly believe or flunk out. At most col-
In reality, the colleges cuses mostly on deeply more of those who ap- brand-name schools im- leges, he says, scrambling
your kids attend matter flawed ratings systems and plied. And 53% admitted at press employers and lead for a place at a school that
far less than the majors a handful of institutions that least two-thirds of their ap- to more opportunities. doesn't really want your kid
they choose, and multiple admit a fraction of their plicants. Researcher Paul Hill, who can backfire into a higher
studies have shown elite applicants, such as those Kids who don't get into analyzed millions of admis- bill and a discouraged stu-
schools don't offer any ex- involved in the college ad- one of the 46 highly selec- sions and salary records for dent.
tra payoff for most gradu- missions scandal: Stanford tive schools typically have student loan lenders, didn't "Parents get fixated on get-
ates. Inflated expectations University, which accepted plenty of other good op- find that to be true. Consis- ting their kid into the best
can even lead to worse less than 5% of applicants tions. tently, a graduate's major school possible," Hill says.
SELECTIVE DOESN'T MEAN had a far bigger impact, "They're setting themselves
Fed plans more Treasury BETTER OUTCOMES says Hill, president of Job up for frustration."q
Elite schools don't produce Search Intelligence in Los
purchases to control happier or more success- Angeles.
ful people. A 2014 study of "A kid with a degree in
lending rates

By CHRISTOPHER RUGABER above its target range.
Associated Press The Fed also says it will ex-
WASHINGTON (AP) — The tend a separate short-term
Federal Reserve says it lending operation through
will buy roughly $60 billion January that is also intend-
a month in Treasury bills ed to boost bank reserves
through mid-2020 to inject and guard against a short-
cash into the banking sys- fall.
tem and make it easier to Chairman Jerome Pow-
control overnight lending ell has said these Treasury
rates. purchases aren't intended
The action marks the Fed's to stimulate the economy.
latest response to a short- On Friday, the Fed said its
age of cash reserves that purchases are "technical"
developed last month and and "should not have any
caused short-term inter- meaningful effects on... the
est rates to spike, sending overall level of economic
the Fed's benchmark rate activity."q