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Applications dip after scandals at prestigious universities

A big scandal can cost a prestigious university as many new applications as falling 10 spots in a prominent college ranking, research finds.
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The national admissions scandal that broke last month will likely cause a brief dip in new applications to the universities involved, research finds.

“There is a common hypothesis that negative media may increase demand for institutions of which awareness is the primary challenge,” says Jonathan Smith, an assistant professor of economics in the Andrew Young School of Policy Studies at Georgia State University. “However, we’ve found that not all press is good for all universities and colleges, especially the more prestigious ones.”

A high-profile scandal that generates significant media coverage at a prestigious university can lead to as much as a 10-percent drop in the university’s applications the following year that may last as long as two years, researchers say.

This reduction is similar to what happens to applications if the institution falls 10 places in a prominent college ranking, such as US News & World Report.

For the study, researchers constructed a dataset of college-related scandals at the nation’s 100 top-ranked universities from 2001 to 2013. Scandals affected more than 75 percent of the institutions in their study.

“Potential applicants should understand that these institutions and scandals are not unique,” Smith says. “While the colleges should not be rewarded for improper behavior, the campus cultures are pretty similar to those of peer institutions that may have had a scandal last year or will have one next year.”

The researchers estimated the impact of the scandals in four areas: applications, incoming student body SAT scores, yield—or the percent of students who choose to enroll after acceptance—and donation rates.

They found no impact on competitiveness, yield, or alumni donations. They did find a small but suggestive effect on deterring future scandals.

“While the overall impact of these scandals seems to be small across most outcomes, it’s important to note that a reduction of 10 percent in a college’s applications is quite large in magnitude,” Smith says.

“On the positive side, news generated by a scandal can serve as a deterrent, making the campus less scandal-prone—and hopefully safer—while the spotlight shines on the issue.”

Researchers from the University of Toronto also contributed to the study, which appears in Contemporary Economic Policy.

Source: Georgia State University

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