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My current university has numerous top-tier graduate programs but is sometimes the butt of jokes about the quality of its undergraduates.
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The criticism is not entirely without merit, but broad generalizations about any university with 20,000 undergrads are inherently unfair. In reality, every school has some mixture of brilliant students, students who are just along for the ride, and students who absolutely do not belong in a college environment. The ratios may be different (Yale vs Community College) but all three types are present at every university. From the Ivy League to the local night school, there are a lot of people in the higher educational system who utterly lack the skills necessary to succeed and should not be there.

That's a harsh, elitist thing to say in America 2008, isn't it? Well, "Professor X" at the Atlantic Monthly lays out the argument quite nicely in "In the Basement of the Ivory Tower." This essay should be mandatory reading for everyone involved in the business of higher education. If you've ever taught courses beyond high school I think you'll identify with his committment to teaching and frustrating realization that he is dealing with students who are devoid of some very fundamental college-level skills.

I've had students who are more than intelligent enough to write their own ticket in life, students whose eagerness and ability to understand complex arguments exceed that of some of my colleagues. They're both smart and committed. And they're not terribly rare. At IU, I'd estimate that they are about 25% of the undergraduate population. The next 50% are the people who are just shuffling through. They are easy to deal with, because either they will do the work and pass (they're capable of doing what we ask – if they bother to do it) or they will do nothing and fail. They don't participate in class, know why they are here, or care; they're thrilled to slide by with a C-.

The remaining 25% are Professor X's students. I mean this with the utmost respect toward undergraduates and none of my characteristic condescending prickness: about 25% of the students I deal with are, in the words of Nigel in Spinal Tap, "not exactly university material." Like Prof. X, I am not talking about people with a few learning or academic problems. I'm talking about students who are utterly devoid of the basic math, writing, research, communication, and problem-solving skills required. They do not know how to write a basic research paper. They don't understand the difference between fact and opinion, sentence and fragment. They often lack basic computer skills. Frankly, they don't merely lack college-level skills; some do not even have high school-level skills.

Like Professor X, I can spot these students immediately. And no matter how many times I explain what a research paper is, I inevitably get a sprawling, poorly-researched, barely-in-English summary of their opinion. Of course I do not hate these students or think they are incapable of learning. In most instances they simply have not been taught these skills (or were taught poorly).
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It is beyond frustrating for me, because I cannot turn political science classes into High School English 101. I do not have the time (or the training/expertise) to teach them how to write.

Who is to blame? Well, I'm glad you fucking asked.

High schools and parents play a role. The former pass students who lack basic skills, often because the latter have taught those students to do shitty work and then complain/negotiate their way to a B. But a far larger burden rests with the colleges. We are culpable. The admissions criteria in most colleges these days (with elite exceptions, of course) revolve around the means to pay.
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If you (or Mom and Dad) can write out the tuition check and you meet some ridiculously low standard (21 on the ACT), you're in. The universities goddamn well know that a relevant portion of the students they accept – especially in borderline-fraudulent moneymaking scams like "distance learning" or "extension" programs – can't hack it. They aren't prepared. They will not succeed. And we take them anyway because they can write the checks.

This is a serious ethical dilemma for universities. The folks in the state capitol cut the budget and the schools respond by admitting lower and lower tiers of applicants to make up the revenue. Rather than honestly telling some applicants "I'm sorry, but you are not ready to succeed in this environment" we smile and take a few semesters of tuition from them before they fail out. We take students – usually white, upper- or middle-class kids who lack college skills but have well-off parents – to subsidize other students. And the people who teach have to deal with the fallout – the emotional pleas, the poor nights of sleep, and the profound sadness that accompany handing a D- to a student who tried but simply isn't able to produce at the required level. The $12,000 per year grad student on the bottom of the food chain is left to deliver the bad news. As the author says,

Telling someone that college is not for him seems harsh and classist and British, as though we were sentencing him to a life in the coal mines. I sympathize with this stance; I subscribe to the American ideal. Unfortunately, it is with me and my red pen that that ideal crashes and burns. … (the students) are not ready for high school, some of them, much less for college. I am the man who has to drop the hammer.

Bill Clinton and that dude from the West Wing like to say "Education is the silver bullet. Education is everything." Some vague, unspecific "education" for "everyone" is the key to solving our problems. In the reality-based community, postsecondary education simply isn't for everyone. But what is the alternative? As we've seen blue collar employment disappear or settle into the $10/hr-no-benefits trough, the futility of one commonly proposed "solution" – that we should expand vocational or technical education as a college alternative – becomes clear. Why sink money into training people for jobs that will be in Mexico or Indonesia when they graduate?

No, instead we have financially able families sending unprepared people to college in the desperate hope that doing so will turn Billy into a lawyer. As working class jobs disappear in droves, people panic and buy into the delusion that the world needs an infinite number of engineers, doctors, lawyers, accountants, and pharmacists. Even if that were true (hint: it isn't), the ability to pay for an expensive education isn't going to turn some of these students into white collar professionals any more than buying an expensive set of golf clubs will turn a talentless, uncoordinated person into Tiger Woods.