You Won't Believe How Much Money Colleges Make on Rejected Applications

[Zinhead]

From the USA Today:

http://college.usatoday.com/2017/04/10/you-wont-believe-how-much-money-colleges-make-on-rejected-applications/

Already, Harvard alone makes nearly $3 million in gross profits off of rejected applications each year, according to a new study conducted by UCEazy, a company that assists first generation immigrants with the college application and admission process. Over 600 public and private universities in the U.S. were included in the study, which used data gathered by U.S. News and World Report. Statistics include data from first-time freshman undergraduate applicants and show that all told, universities are making over $200 million, annually, from rejected college applications — many from students who are unqualified or under-prepared.

The five universities that earn the most from rejected application are these:

1. University of California-Los Angeles: $5,369,840
2. University of California-Berkeley: $4,681,320
3. Stanford University: $3,632,130
4. University of California-San Diego: $3,608,290
5. University of Southern California: $3,419,440

[prof2dad]

I read the USAToday article and read the UCEasy article, and no where I could find the methodology for estimating the profit universities earned from rejected applications. What there two articles have are just statements! They said nothing about the unit cost of processing application at all. The substance of this statement is no different from that of a rumor. Please show us some beef so that we can exercise some critical thinking. Thank you.

[sybbie719]

UCEazy gave USA TODAY College an exclusive look at the study, conduced by its founder, Vinnie Gupta. To develop the numbers, Gupta subtracted the total number of applicants accepted into a school by the total number who applied and multiplied that figure by the application fee amount.

Seriously?? Does Gupta know exactly how many students applied using fee waivers (College board, NACA, Common APP) and how many international students that Harvard waived the application fees for?

note to Gupta; Maybe research is not your strong suit.

[Pentaprism]

You Won’t Believe How Much Money Colleges Make on Rejected Applications

No, I don’t believe it.

Even assuming there are no fee waivers, application fee to UC is $70. That is probably sufficient to pay for, say, 1 hour of a clerk. I think processing an application takes more than 1 hour (note that even the computer requires the initial investment, and ongoing upkeep).

No. I don’t think they make any money.

[PurpleTitan]

Evidently, he thinks all those people reading essays in the adcoms office, going to college fairs, etc. work for free.

[LVKris]

That’s ridiculous! Each UC application is read by at least two people. To handle the workload, staff outside of admissions is used to help with the reading. Training them costs money. UCLA got over 100,000 applications this year. They must need a small army to handle all the work. None of these folks are low wage workers, either.

And what about the financial aid staff? Most of the applicants also apply for FA, and I imagine that even with an electronic application process at least a few hours of human time go into preparing an offer. That’s expensive, too.

Marketing materials don’t appear out of thin air. Admissions office staff doesn’t work for free. Overhead costs exist.

I bet the money brought in through app fees doesn’t come close to covering even the expenses of application processing, let alone the total costs associated with recruitment.

[mom2collegekids]

Are you sure each UC app is read by two people?

I would bet that some are filtered out before they are seen by human eyes.

[hop]

They do read them all, even the obviously unqualified.
Here’s this from a couple of years back.
Lifting the Veil on the Holistic Application Process at University of California Berkeley

http://www.nytimes.com/2013/08/04/education/edlife/lifting-the-veil-on-the-holistic-process-at-the-university-of-california-berkeley.html

[romanigypsyeyes]

Dumb clickbait article is dumb.

[1Dreamer]

Are you sure each UC app is read by two people?

They claim they do.

This is from UCLA which says it adopted Berkeley’s system in 2007.

Further, each application is reviewed in its entirety by at least two readers, and the overall score is averaged. To ensure consistency and fairness, if there are meaningful discrepancies in the rankings given by the two reviewers, the application is further reviewed by senior managers within the admissions team. . . . . . .

Rather than examining a candidate’s academic record or personal achievements in isolation, as occurred under the prior admissions scheme, holistic review reflects multiple readers’ thoughtful consideration of the full spectrum of an applicant’s qualifications, based on all the evidence provided in the application and viewed in the context of the applicant’s academic and personal circumstances and the overall strength of the UCLA applicant pool.
http://newsroom.ucla.edu/stories/080905_holistic-admissions_reed

And this from UCSD

Every application, including the personal insight questions, is reviewed by a minimum of 2 individuals. Consideration is given for the academic and personal factors listed below.

http://admissions.ucsd.edu/freshmen/eval-process.html

I don’t see how they could possibly make money off of application fees given the costs of such a review process.

Harvard alone makes nearly $3 million in gross profits off of rejected applications each year

Perhaps the author skipped economics class when they covered gross vs. net. Big difference

[TomSrOfBoston]

More fake news. (

[3puppies]

Sad

[calmom]

I’m a little skeptical of the claim that each UC application to each campus is viewed by at least two readers, given that the UC’s have very clear minimum standards to apply, including very specific course requirements and a numerical score based on test scores and GPA. There must be a certain fraction of applicants who simply don’t meet the minimum standards but apply nonetheless, hoping that somehow whatever is missing from their application will be overlooked. It doesn’t take two people to figure out that a California kid who has only 2 years of high school math or an a below-minimum AI score is ineligible for admission --that can be done by a computer. See: http://admission.universityofcalifornia.edu/freshman/requirements/ &
http://admission.universityofcalifornia.edu/freshman/california-residents/admissions-index/instructions.html

So whatever statements they are making about application readers, I am sure they are referring to apps that have already passed a pre-screen.

That being said, I agree that the funds from admissions fees are not direct profit to the college – although I also doubt that the colleges are losing money on the process either. Given that the colleges are run as not-for-profit institutions, they aren’t looking for financial enrichment in any case. Their goal is to bring in adequate revenue to fund everything their institution does without having to tap into the principal of their endowments.

I do think that the rejected applicants are helping fund the colleges marketing and outreach, which tends to encourage other student who are likely to be rejected to apply and perpetuate the cycle. Something to thing about when reading glossy college brochures from elite schools.

[TooOld4School]

The article should have said “You won’t believe how much money colleges lose on rejected applications”. The $50-$70 application fee doesn’t even come close to the printing, mailing, traveling etc. that it costs even to generate an application. Chicago must have spend over $50 in brochures and mailing costs to our home- and my kid didn’t even apply.

[Periwinkle]

According to Ruffalo Noel Levin,

Four-year private institutions spent the most to bring in new undergraduates in 2015, spending $2,232 per new student at the median.
Two-year public institutions used fewer staff for their recruitment and admissions operations, with a ratio of 225 new students per each full-time-equivalent (FTE) staff member (225:1).

So, let’s say a median private institution enrolls 1,000 new students. That means it’s spent $2,232,000 to enroll that class. For that to be covered by application fees, they’d need to have 29,760 applicants. However, that would give them an acceptance rate (leaving out yield) of 3.4%.

This leaves out the fact that colleges do waive app fees for students who qualify.

So I’d guess the Ivies might cover their costs, once the fee waivers and cost of admissions is factored in.

At the very, very competitive end, for the students who do not qualify for waivers, there may be the hope that a fee may serve to lessen demand. The Ivies don’t need more applicants. The process is so crazy in part because so many students are applying to so many colleges.

[MassDaD68]

No surprise here for me. Have any of you seen your kids e-mail boxes. these college solicit $50 application fees like charities solicit donations. They are relentless. They make it sound like some person has been following your kid since grade school and is anxiously awaiting his application because he is soooooo special. My son was only allowed to apply to those schools he wanted to attend and had a great shot at getting in.

[Periwinkle]

Some of the colleges sent postcards in the mail and emails offering to waive application fees. So not all applicants pay fees. As those colleges hadn’t been on our children’s lists, I figured it was a way to increase the number of applicants with high test scores.