The Economics of College Admissions

Ivy Day has just passed by the High School Class of 2024, and while many families cheered at acceptance letters, another year of the lowest acceptance rates led to more rejection letters than ever before seen. In a society with so many competent students and widespread high statistics/scores, how do colleges determine who to admit? 

In determining who to accept, it is imperative for analyzers to understand that the “harsh truth” in university admissions is that “colleges are a business,” and despite various Supreme Court Cases attempting to limit the actions of colleges in their admissions processes, who a college admits or denies is at their own discretion (The Guardian). 

One contributor to the large quantity of applicants is that now, the world population has also doubled since 1975, from 4 billion people to over 8 billion people in 2023. With more students, it makes sense that there are more applications submitted. Similarly, more than ever, after high school years students are expected to attend college and pursue degrees in studies they feel passionate about. There is an ongoing social phenomenon that expects high school seniors to apply to and attend college. As per the National Center for Education Statistics, only 51% of high school seniors in 1975 decided to immediately enroll in either 2 to 4 year colleges. However, as of 2024, that number has crept up to almost 70%. However, despite this population growth and a larger percentage of high school graduates seeking bachelors/associates degrees, most colleges have not opened up more seats for the larger pool of students; this is the main reason for these historically low acceptance rates. 

Additionally, many U.S. institutions use “holistic” application review practices to determine which students they will admit; this process does not set direct standards for applicants to meet. That allows students who do not meet typical admission criteria to apply. While this may benefit students who have extensive extracurricular experience with poor test scores, it blurs the line for what makes an admitted student qualify for their spot. In contrast to Canadian and U.K. institutions such as McGill University and the University of Oxford, which establish fixed grade criteria for admission, U.S. schools do not create admission cut offs, allowing for students who do not meet baseline qualifications to compete for a space. This increases the influx of applications, which thus contributes to plummeting admission rates. 

With more students than ever applying, non-demarcated standards, and a societal shift in the valuation of college, admissions rates are at an all time low, and likely, will continue to plummet in upcoming years. Oftentimes universities must reject qualified students due to space limitations, and so goes the economics of college admissions: a high demand for a scarce supply of seats causes the notable plummet in admission rates.