People have always gamed the university system. When they forget the rules, more than academic careers suffer in the backlash.
We all know that the successful way of making sure your kids get into an elite college is through the gift planning office.
Donate as little as $500,000 and hint at more and you make a different kind of dean’s list where the admissions team goes out of their way to say “yes.”
As dozens of celebrities and CEOs alike have learned in the past week, anything more blurs the line between overkill and outright fraud.
And when the family pushes too hard, they not only risk their kids’ reputations but an extremely cold shoulder for themselves — effectively sinking a would-be “dynasty” from both ends.
It’s going on now. Extremely privileged people who usually get everything they want are hitting a hard ivy-covered wall, with embarrassed partners pulling the plug on big business deals.
The backlash is fierce
Lori Loughlin, Felicity Huffman and other parents just wanted to get their kids into the school of their choice.
Slots are limited and the number of applications has swelled over the years, making each acceptance fiercely competitive.
Yale and Harvard don’t have space for 95% of the people who send in the paperwork. USC turned down 87% of applicants last year.
Multi-generational legacies are respected at some schools and those kids get special treatment. But when you simply have your heart set on a school with no family connection, the process is grueling.
Wealthy people have gotten used to paying extra to avoid disappointment. Apparently this particular admissions scheme brought in $25 million over the years.
However, the mood around ostentatious displays of privilege has gotten a lot more bitter over the last decade. Social media backlash is sudden and savage.
Huffman has already pulled the plug on a business venture, ironically a parenting advice website. It was in the early stages and wasn’t worth much, but that dream is dead.
While Loughlin’s acting career may recover, her current show has apparently cut her out of unaired episodes. As the wife of the founder of fashion chain Massimo she isn’t exactly hurting for cash.
However, her kids wanted to be Kardashian-style social media stars with big brand promotion deals with companies like Amazon and Sephora.
Those deals just crashed. The sponsors don’t want the whiff of fraud around their products and definitely don’t want to pay for the association.
The kids got into the schools they wanted. But it’s already cost them the careers they were trying to build.
Again, Huffman and Loughlin are already set for life. They can retire and live well on their career savings as well as what their husbands have built.
(Huffman is married to William H. Macy. Both couples are easily worth $30 million if not a whole lot more in the case of Loughlin and her share of the $135 million Mossimo buyout.)
If they have unrealized business ambitions, they can still create new careers for themselves outside the public eye. But their family-friendly public personas are dead.
And the kids’ college experience has had the opposite of the usual desired effect. They haven’t made useful connections or learned skills and habits that will serve them in their adult careers.
They’ve gotten a reputation as cheaters who took their spots in school from someone theoretically more deserving. That’s a huge setback in a world where social media presence counts more than your transcript.
Literally doing it wrong
The problem is that elite universities have a system in place for accepting rich kids who wouldn’t normally qualify for admission.
Buying your way on campus isn’t a crime. Specialized coaching so they can pass the tests and sign up for the right extracurricular activities isn’t either.
That’s what any reasonable consultant would’ve told the HNW parents now charged with using fraud to get their kids into schools like USC and Yale.
Helping rich kids get an edge on the U.S. admissions cycle is now a thriving global business. Just about anyone can read a test prep book or hire someone to run some practice interviews.
I know people who make a good living training kids in the Persian Gulf to tell Ivy League admissions officers exactly what they need to know. They get a bonus for Harvard.
Nobody cracks down on these practices because they’re just gaming what insiders know about the admissions process to make sure that kids who pay avoid mistakes and hit all the right notes.
It’s a little like knowing what a standardized test will cover without being actually told which circles to fill in.
But that evidently wasn’t enough for these people. Maybe their kids didn’t cooperate. Maybe it was just leaving too much to chance.
Paying people inside the schools and testing facilities to doctor the paperwork crosses the legal line. Suddenly there’s a clear quid pro quo.
In the relatively genteel world of academic endowments, the quid pro quo is never spelled out. Applications simply get sorted into stronger groups. The mechanics are left vague.
Consultants earn their pay decoding the signals. Officially their job is often to align a wealthy family’s philanthropic activities with the separate question of where the kids go to school.
Think of politics. Respecting the wall between the contribution and the policy is critical, even if it’s only a legal fiction.
This particular scheme funneled money through what the consultant called “side” doors. The kids weren’t confidently marching through the front gate with great applications and they weren’t simply buying their way in, either.
The money moved from the parents to university employees via clandestine channels. Coaches showed up on non-profit tax returns as extremely highly compensated consultants.
Presumably they distributed the income to confederates in order to perpetrate the illusion that the kids played the right sports.
Sometimes the “donations” went straight to the athletic departments and were allocated by insiders there.
Either way, following the money’s convoluted path in and out of parental pockets and educational charities suggests at least a token effort to obscure the details.
And it was expensive. Supposedly a few of these parents spent $500,000 per acceptance letter, which is really all it theoretically costs for the development office to fast-track your application.
Going around the system was what got them in trouble.
Where does it go from here? The system was never 100% merit based. In fact it’s come a long way from the days when legacy was everything.
Truly diverse student bodies are now more rule than exception. Some of the most desirable schools make sure tuition is affordable to everyone accepted.
And those who can pay still get perks.
But real value-added education consultants are now on notice. College planning means a lot to UHNW families as well as their less affluent counterparts.
The kids and parents get their hearts set on a specific school. Sometimes that’s doable. Sometimes they need to be gently pointed somewhere else.
Either way, it’s good when everyone is clear on what the benefits of this experience will be. For some families, college is a window to a bigger world and a better career.
For others, it’s another all-expense-paid vacation. Even when your parents are only worth $30 million, there’s no need for a career track.
The question is what you want to do with that money and your life. Maybe the school will help you figure that out. That’s up to you, provided you get in.
