The U.S. presidential election turned a spotlight on the great economic divide in our country — one that is ever-widening, shrinking the middle class in its wake. What is the root cause of that divide and can independent schools play a role in closing it?
A recent article in The New York Times examined one cause of that divide—the erosion of the American Dream of upward income mobility, which has been steadily declining since 1945. The study, carried out by a group of economists led by Stanford Professor Raj Chetty, shows that a child born in 1940 had a 92 percent chance of being more well off than his parents, while one born in 1985 had only a 50 percent chance.
The Equality of Opportunity Project is working to understand the drivers behind these numbers and to uncover clues to change the trajectory. The organization’s mission is to “develop scalable policy solutions that will empower families to rise out of poverty and achieve better life outcomes.” The project’s work centers on using big data to learn from places where the American Dream is still thriving to unlock strategies that could be replicated throughout society.
Two research initiatives of the Equality of Opportunity Project highlight ways for both K-12 and higher education to be part of the solution.
- Project STAR sought to determine the effects of early childhood education on earnings later in life. The study followed children who were randomized into a higher-quality classroom. Results indicated that “higher quality kindergarten classrooms raised test scores initially, but those gains evaporated after a few years. But, the effects of higher quality education then re-emerged in adulthood. The data suggest that this pattern may be driven by the effect of education on non-cognitive skills, such as the ability to cooperate well in groups.”
- A more recent effort gave Mobility Report Cards to U.S. colleges and universities based on access across income distribution. Researchers found that at Ivy League colleges more students come from families in the top 1 percent of the income distribution than the bottom half of the income distribution. Further, the research showed that some less selective colleges, which have a much larger fraction of children from low-income families, show those student earning outcomes later in life are nearly comparable to those at highly selective colleges. These colleges have very high mobility rates, that is, they have large numbers of students who come from poor families and end up with high incomes. Regrettably, many of these schools with high mobility rates are now enrolling far fewer students from low-income families; thus, the pathways to success are becoming less accessible.
Upward economic mobility is a key driver of a successful economy. Can independent schools drive upward economic mobility and be part of the solution to build a stronger economy? I think they can, but two mindsets are key:
- They must be intentional about investing in socioeconomic diversity.
- They need to adopt an opportunity mindset, not a scarcity one.
Being Intentional About How Your School Invests Resources
When I speak to heads, they readily name a commitment to diversity of all kinds as a high priority for their schools. Although the moral commitment is there, there also must be an intentional commitment of resources and a blueprint for execution throughout all school processes to make that commitment a reality. Achieving socioeconomic diversity, in particular, is tough in this economy and at independent schools’ current price point. Some may say it is impossible to fully achieve our goals for socioeconomic diversity at a time when we are struggling to balance our budgets.
I believe we need to push against that notion and experiment with ways to achieve our vision even in a time of scarcity. In his podcast, Revisionist History, Malcom Gladwell devotes three segments to how both colleges and schools make financial choices around students and resources and the impact on what he refers to as capitalization of talent, that is “the rate at which a given community capitalizes on the human potential… what percentage of those who are capable of achieving something actually achieve it.”
The second segment in his series brings this point home in a case study of two colleges: Bowdoin and Vassar. In examining choices they have made about resource allocation, Gladwell contrasts Bowdoin’s investment in a healthy food program with Vassar’s in financial aid. You can make the case that his analysis is overly simplified, but I believe he leaves us with an important message. If we believe that how we provide access to education and then nurture that talent is a top priority, have we made it a resource priority in every way possible? Here is Vassar’s statement about its commitment to financial aid:
Vassar meets 100% of the full demonstrated need of all admitted students, international or domestic, for all four years. Vassar adheres to a need-blind admission policy for all first-year students who are U.S. citizens or permanent residents. This means that admission decisions for those applicants are made without regard to their financial situation. The goal of the college is to make a Vassar education affordable and accessible to all admitted students. You do not have to be wealthy or even well off to attend Vassar. Financial aid is awarded to 60% of Vassar students, exclusively on the basis of need.
Now you can argue that Vassar is an asset rich institution and is able to make that commitment, but the school does so at the expense of investing in other things that could make it more attractive in this competitive recruitment market.
Moving from More for More to More with Less
Vassar’s story brings me to my second point. We often approach issues like financial aid with a scarcity mindset. We say we can’t provide more financial aid, even if demonstrated need is there, because we simply can’t afford it while meeting other high priority goals.
In a recent article in Academic Impressions, Amit Mrig describes the problem with a scarcity mindset in this way: “The danger in this thinking is that we operate in a passive mode — reacting to events as they occur — as opposed to a proactive mode — responding thoughtfully and opportunistically to changing conditions. We become skilled at advocating for resources, but not at creating them.”
Navu Radjou, author of the book Frugal Innovation: How to do More with Less, offers an interesting perspective on how we approach innovation in our society. He demonstrates that when we try to innovate, our tendencies immediately go to creating “more for more.” We can certainly see that in our schools. As our costs have escalated in the last decade, we’ve felt increasing pressure to justify our value. At many schools, this has led to the addition of service after service.
Instead of more for more, Rajdou challenges us to turn an “age of austerity” into an “age of opportunity” by approaching innovation in a very different way. He lays out six principles:
- Engage and iterate — observe your customers and understand how your product or service can be more relevant to their needs.
- Flex your assets — explore how you can satisfy ever more demanding customer needs at less cost.
- Create sustainable solutions — develop systems to make innovations more sustainable over time.
- Shape customer behavior — explore how you can influence the way your customers think.
- Co-create with “prosumers” — take advantage of the desire of millennials to be prosumers, that is, consumers who are no longer passive users, but empowered “prosumers,” who collectively design, create, and share the products and services they want.
I also urge schools to think differently about the challenge and to make certain they are asking the right questions. For instance, if a school is facing declining enrollment, we could assume that it is simply not communicating well about its offerings. But digging deeper, we might find that there are not enough families in the school’s draw area who can afford the tuition. Or we might find that parents’ motivations have shifted. Perhaps consumers in the school’s area are not seeking the Rolls Royce of schools. Perhaps they’re looking for the Prius or the Tesla. Rather than asking families, “What features can we add to make $35,000 a year worth it?” ask them, “What are you hoping your child will get out of his or her education?” or “What does your child need to grow?”
At this time in our history, I think independent schools have the opportunity to do well by doing good, but we can only do that if we are very intentional about our goals and values and align our resources with them. We can make a dent in the rates for capitalization of talent, which are at a historic low in this country. We can begin by being intentional about investing in socioeconomic diversity and looking at our future through an opportunity mindset instead of a scarcity one. This is not an easy proposition, but I believe that independent schools have the mind and vision power to change the trajectory for economic opportunity in this country.
Does your school have a commitment to diversity? How do you see your role in addressing challenges in our society?
Have you had success curbing tuition growth? How have you managed the push to add services?
