Is Bribing Your Kid's Way Into College Actually a Good Investment?

A college degree isn't worth what it was in the 1980s. Why would the wealthy pay huge sums to get their children into college?
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Lori Loughlin and her husband Mossimo Giannulli—two figures at the center of a United States government indictment over a college-admissions scandal—both never went to college themselves.

The 54-year-old actress, who was arrested along with her husband, grew up in the Long Island, New York, hamlet of Hauppauge. As a public-school student, she commuted into Manhattan for casting calls at 5:30 a.m. with her father, a foreman for the New York Telephone Company, and commuted back for school. With a full acting and modeling slate, she maintained a B- average all through high school and, in a December of 1981 profile in the New York Times, was "still undecided about attending college" despite her impending graduation. She never matriculated anywhere.

For his part, Giannulli—Loughlin's husband of 22 years and founder of the mid-2000s eponymous designer brand and Target fixture "Mossimo"—reportedly eschewed a degree in favor of funneling his parents' college tuition checks into a mid-range fashion label.

Their daughter, Olivia Jade, has grown her own fashion "influencer" brand into a lucrative beauty business and didn't even want to attend college, as she stated multiple times in YouTube videos.

Loughlin and Giannulli allegedly paid nearly half a million dollars to the University of Southern California to secure Olivia Jade's place there, according to the U.S. government indictment—yet all three have managed to forge successful careers without a single college degree among them.

So what was the point of her going to college? Olivia Jade answered the question in a recent video: "Mostly, my parents really wanted me to go because both of them didn't go to college."

Of the 50 individuals indicted by federal prosecutors in the admissions scandal, Loughlin and her family most capture a core contradiction at the heart of the fraud: In a society where the economic value of an undergraduate degree remains under siege, college has become a purely social ritual for a growing segment of wealthy Americans.

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A bachelor's degree is, by most objective measures, a valuable commodity. According to the Social Security Administration, a bachelor's degree means about $650,000 and $450,000 more in lifetime earnings for men and women, respectively, than their high-school-diploma-holding counterparts. In 2014, Department of Labor data indicated that college graduates earned 98 percent more hourly than high school grads, up from 85 percent more a decade before.

That pay gap hit a record level in 2017: As Anthony Carnevale, director of Georgetown University's Center on Education and the Workforce, put it in an interview with the Associated Press, "The post-Great Recession economy has divided the country along a fault line demarcated by college education."

On a year-to-year basis, these incremental gains help trace the contours of the post-recession workforce, especially since degree-holders overwhelming capture the majority of new jobs created. But on a generational scale, these gains obscure a larger shift in the value of higher education in America.

A 2016 study on the wage gap between college and high school degree recipients, conducted by the Federal Reserve Bank of San Francisco and published by the National Bureau of Economic Research, indicates that wage gains for higher education have, in fact, flattened in recent years compared to the gains unleashed by the electronics boom of the 1980s. Indeed, the dollar currently has a purchasing power on par with 40 years ago due to lagging wage growth, according to recent analysis from the Pew Research Center, "and what wage gains there have been have mostly flowed to the highest-paid tier of workers."

College grads aren't all reaching that tier. This is due to two competing factors, according to the NBER study: a technology-driven shift away from "middle-skilled occupations" and "a general weakening in the demand for advanced cognitive skills." In the case of the former, "routine" jobs like clerical and repetitive-motion work are largely eliminated by computers, squeezing overall demand for labor. In the case of the latter, individuals with college degrees are funneled into jobs that don't require them.

"Overall, the results suggest rising competition between education groups for increasingly scarce well-paid jobs," the authors write. "Some of this is reflected in the movement of individuals holding only a college degree into routine jobs, consistent with polarization or skill downgrading, and some is reflected in the wage advantage of those with graduate degrees over the college-only group within broad occupations, suggesting skill downgrading."

Taken along with the meteoric rise in the cost of attending college and ballooning national student debt, an undergraduate degree doesn't necessarily come with the same payoff it used to. And while this flattening trend in wages "should not be interpreted as suggesting that college and graduate training are no longer sound financial investments," the NBER authors write, "the flattening of returns as costs have continued to rise suggests that college may be an unfavorable financial investment for rising numbers of individuals."

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Which brings us back to Loughlin and her family.

The NBER study, the authors argue, "raise[s] the possibility of an eroding relationship between technological advance and the returns to investment in higher education." As communications technology continues to transform the workplace, it creates new types of celebrity. The soap opera that owned the airwaves in the 1970s and '80s and brought Loughlin into Manhattan at 5:30 a.m. every day or the social media platform that gave Olivia Jade the wealth of vlogging—a job that didn't exist a decade ago—are testaments to this.

But they're also a testament to the real value of college, especially the top, elite colleges: higher education may bestow a monetizable skill set, but a degree itself is, at its core, now a status symbol—especially in the overlapping organs of power that actually shape the flow of influence through American society. Loughlin and her husband attained fabulous wealth without a college degree, but made it such a priority for their daughter that they allegedly committed fraud to get her one.

Both of Loughlin's daughters have now withdrawn from USC; they would have been fine before she had blemished their names with this reported crime—all over what feels like a Gatsby-esque grasp for the nouveau riche version of a Long Island mansion.

There's mounting evidence that the college-admissions system is largely a matter of graft, from securing a family friend's brother for your in-person interview to donating a building. The big scandal of the Loughlin moment is not the fraud and bribery and lawbreaking: It's that college education is, for a growing class of Americans, so unfettered from its actual monetary value that it distorts the system for everyone else. Every matriculation that deviates from the so-called standard of meritocracy that purportedly defines the college admissions process means another student denied an opportunity—and undermines the legitimacy of belief in admissions as intellectual pursuit.

In a 2004 interview with the Washington Post, Loughlin described her first big break as a matter of, well, who she knew. "My mom had a friend that was going into Manhattan to meet with an agency for modeling," she told the newspaper. "She was taking her teenage daughters in and she asked my mom if I wanted to go along. My mom reluctantly let me go, but I don't think she ever thought anything would come of it. And I went in and they handed me a contract and said, 'We'll take you.'"

Perhaps that's what Loughlin assumed college admissions is like.

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