The “Undermatching” Problem

A perpetual problem in higher education is how to encourage talented lower-income and minority students to apply for – and enroll in if accepted – colleges that will challenge them yet be within their capabilities. The less successful we are in doing this the less likely it is that these students will move up the economic ladder in later life.

This “undermatching” is an enormous problem but now is receiving more attention.

Recently Stanford University economist Caroline Hoxby and Christopher Avery of the Kennedy School analyzed the issue and found that low-income students are far more likely to apply to non-selective schools than are high-income students with the same SAT scores. This despite the fact that thanks to scholarships and other assistance the lower-income student generally has higher out-of pocket costs at the less-selective school than at a more demanding institution. The authors found some important though perhaps not surprising patterns among the low-income students. Those most likely to aim high tend to come from more selective high schools, tend not to live in the central city, and are surrounded in high school by more confident, higher achieving students.

It’s not that top schools are not trying to attract lower-income high schoolers with potential. But as the New York Times reported in its coverage of the study, students who know few examples of family members or neighbors who have aimed high are themselves very reluctant to take the chance of moving out of their comfort zone.  

What can be done about it? One simple but surprisingly effective part of the solution may be to apply a few “nudges” of the kind favored by behavioral economists.  It turns out, for example, that teenage lethargy is a major factor in the non-enrollment of students, especially those from neighborhoods where few other students are applying. A recent study found that just sending a few text messages to low-income students during the summer before college – to remind them of deadlines, availability of assistance – pushed up eventual enrollment by 4-7%, at a cost of about $7 per student.

In another analysis, Hoxby recommended building on such results through a focused effort among more selective colleges to provide lower-income students with information on applications and aid in ways that are better designed for today’s more media-savvy young people. The College Board has also begun to send out packages to the top 15% of seniors on the SAT or Preliminary SAT whose family is in the bottom quarter of the income distribution.

It’s true that the absence of good college counselors in many public high schools in poorer neighborhoods is a roadblock. This makes it harder for students to be matched with the appropriate college for them and for the students to get through the application hoops. Fixing that part of the problem is costly for many districts. But it also appears that applying a few of the lessons of behavioral economics may make a significant difference.

Posted by: Stuart Butler

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