How Colleges Are Complicit In Raising Tuition

You might be an honor roll student, varsity athlete, and great humanitarian, but if you’re not the son or daughter of an affluent person, good luck getting off the wait list. At least that’s what George Washington University just confessed by revealing it gives preferential admissions treatment to applicants who need less financial aid. It’s the latest in a series of “affirmative action for the wealthy” cases.

For years, GW claimed to be “need blind,” in other words, unbiased in factoring one’s financial status when deciding between two similarly qualified candidates. But earlier this month it retracted that position despite touting it as recently as the previous weekend in an admissions information session. GW’s new status is “need aware,” meaning the university can shift applicants from the “admitted” pile to “waitlisted” if they depend on getting financial support.

“I would love to see us become a need-blind institution. As matters stand today, however, we believe that our current practice is the best way to meet the financial need of as many students as possible while recruiting an academically strong and diverse student body,” University President Steven Knapp told GW’s student newspaper The Hatchet.

The paper also reports that the university’s endowment of $1.37 billion “pales in comparison” to peer institutions that are need-blind, citing Northwestern’s $7.1 billion endowment. But let’s be honest, GW is really part of an unremitting arms race, in which they’re vying with competitor schools to entice wealthy students (who can afford to pay face value for their education). Why? Because in the world of college endowments, the size of your proverbial war chest equates to your amount of prestige.

Look no further than the notorious US News & World Report rankings for guidance. The rankings reward colleges on their financial resources per student (in essence how much they spend), and it just so happens that the five top universities on its list all have endowments bigger than $7.5 billion. This is where the interest of colleges and their students are no longer aligned.

For example, GW just built a new $130 million “super dorm” and $33 million textile museum. It is not alone. The University of Pennsylvania’s gym recently underwent a $10 million renovation to include an Olympic-sized swimming pool, co-ed sauna, juice bar, golf simulator, and climbing wall. Kenyon College, a liberal arts school, has a $70 million athletic center with similar country club features.

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This article originally appeared on October 28, 2013 in finance.fortune.cnn.com by Matthew Segal.