Here’s a funny thing about all those prestige colleges and universities that are so adamant about continuing with racial preferences in admissions: At the same time, they admit plenty of academically inferior students (and almost always white) simply because they calculate that doing so will pay off in donations. Harvard et al wouldn’t have to employ quotas to keep down the number of highly talented and motivated Asian students if they didn’t reserve so many places for “legacies.”

In this National Affairs essay, Rick Hess takes a penetrating look at the practice of “payoff-based” admissions and argues that it ought to stop.

Hess writes, “This is all unfolding at colleges that avow themselves bastions of equal opportunity and access. These same institutions are all too content to sell seats to the wealthy and connected and to reap the rewards. In so doing, even private universities are not acting as private actors making private decisions; their actions are effectively subsidized by the federal tax code.”

In his analysis, the practice of what amounts to selling places to academically weak kids from rich families began with Duke under Terry Sanford. It was a big success, and other prestigious schools quickly followed suit.

For all the talk about social justice, the folks who run our big universities are intent on maximizing the monetary haul. As Hess notes, “For campus bureaucrats, admissions routines that cater to rich donors are a feature, not a bug. After all, this is how campuses erect buildings, construct new stadiums, add boutique programs, and finance their sprawling bureaucracies.”

What does the tax code have to do with this? Hess explains that donations to universities are tax exempt, but not if donors receive value in return. If a family member promises to give a university a million bucks after his grandson is admitted, then the gift should be subject to tax up to the value of the degree. If the IRS were inclined to look closely at this, it could be curtailed.

Read the whole essay.