Return to Transcripts main page

CNN SPECIAL REPORTS

Scheme and Scandal: Inside the College Admissions Crisis. Aired 10-11a ET

Aired December 29, 2019 - 10:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


[10:00:18]

ANNOUNCER: The following is a CNN Special Report.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: I hope I am going to find out either tomorrow or the day after if I'm getting into my dream school.

(END VIDEO CLIP)

ZAKARIA (voice over): The unbearable weight of the 18-year-old, chasing the college dream.

How did it become?

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: Operation: Varsity Blues.

UNIDENTIFIED MALE: You don't need to work anymore. You don't need to study harder to be well rounded. You just have to write a check.

(END VIDEO CLIP)

ZAKARIA (voice over): A nightmare.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: Coaches, entrepreneurs and celebrities.

UNIDENTIFIED MALE: It may have looked like a Hollywood premier at times.

UNIDENTIFIED FEMALE: I do want the experience of like game days, partying? I don't really care about school.

UNIDENTIFIED MALE: Are you satisfied?

UNIDENTIFIED FEMALE: Do you want to say anything to your fans, Felicity?

JAKE TAPPER, CNN HOST: Two famous actresses caught up in what prosecutors are calling the largest college admissions scam ever. (END VIDEO CLIP)

ZAKARIA (voice over): Crazed parents doing whatever it takes.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: It's unbelievable. It is so competitive to get your kid in to school today.

UNIDENTIFIED MALE: The parents are terrified.

UNIDENTIFIED MALE: It's parents who are driving a lot of this craziness.

(END VIDEO CLIP)

ZAKARIA (voice over): A fierce competition.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: Top schools like Yale, Wake Forest, Georgetown --

(END VIDEO CLIP)

ZAKARIA (voice over): And it starts early.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: The youngest we've got for our college consulting would be in third grade.

UNIDENTIFIED MALE: They are pushed, they are prodded. They are in the hands of tutors, coaches, test preparation.

UNIDENTIFIED MALE: You may begin.

(END VIDEO CLIP)

ZAKARIA: It's a big money business.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: We will create packages that can bring a million dollars.

(END VIDEO CLIP)

ZAKARIA (voice over): And the real scandal may be what is legal? A side door for rich kids sports.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: There's only certain families that can afford to have their kids play some of these sports.

(END VIDEO CLIP)

ZAKARIA (voice over): Donors' children getting a leg up.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: We allow them to play this corrupt game in admissions.

UNIDENTIFIED FEMALE: The system is broken.

(END VIDEO CLIP)

ZAKARIA (voice over): Who is to blame?

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: They set up a system that favors wealthy people and that made this scandal possible.

(END VIDEO CLIP)

ZAKARIA (voice over): Finding the road back.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Dig deeper, dig deeper, dig deeper into which path is the clearest one to take.

(END VIDEO CLIP)

ZAKARIA (voice over): To what college is supposed to be.

In America in 1945, anything seems possible. With the World War II over, the country was revving its engine.

And for a surging middle class, the American Dream had a new name.

The GI Bill.

For the first time, almost all who had served could go to college for free. Millions jumped at the chance. But the most elite schools still remained close to many.

They were private clubs open mostly to members of America's aristocracy - White Anglo Saxon Protestants.

At Harvard, one man wanted to open the gates. The school's President James Bryant Conant, asked himself, what would Thomas Jefferson do? Jefferson had written that America should create an aristocracy of talent to replace the aristocracy of birth and wealth.

Most Harvard men, when they were still all men came from prep schools with the right pedigree.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: They had servants who went into Harvard. They would put on their tuxedo every night like a debutante ball.

(END VIDEO CLIP)

ZAKARIA (voice over): Good manners often trumped good grades.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: He is extremely handsome and charming. He writes wonderful thank you notes.

[10:05:02]

ZAKARIA (voice over): Out there in America, James Conant believed farm fields, working with their hands were Jefferson's diamonds in the rough, just waiting to be discovered.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Let's find those people and bring them to Harvard.

(END VIDEO CLIP)

ZAKARIA (voice over): But how to find them? Conant decided that we needed a test, not to measure knowledge Greek or higher mathematics that would favor the well schooled.

Instead, we need a test that measures innate aptitude. Harvard had such a test for scholarship students.

And it became America's SAT, a test for all Americans.

Last year, two million students took it. James Conant's dream of a meritocracy of the smartest out shining the most privilege seem to be coming true.

ZAKARIA (on camera): The SAT was meant to be the great leveler. It would give everyone a chance to climb the ladder of success. And for decades it did, bringing millions of new faces into America's establishment.

But how did we go from creating an aristocracy of talent to spawning a criminal conspiracy?

(BEGIN VIDEO CLIP)

DON LEMON, CNN ANCHOR: This college admissions scam story, the biggest one ever prosecuted.

UNIDENTIFIED MALE: You want to say anything to your fans, Felicity?

(END VIDEO CLIP)

ZAKARIA (voice over): The college admissions scandal.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Is there anything you want to say to the charges against you?

(END VIDEO CLIP)

ZAKARIA (voice over): From the moment it hit the headlines.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: We have no comment. No further comment.

UNIDENTIFIED FEMALE: The massive sting exposing the ugly truth.

(END VIDEO CLIP)

ZAKARIA (voice over): America was appalled.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: It is morally outrageous.

UNIDENTIFIED MALE: You don't need to work anymore. You don't need to take your time and do the right thing. You just have to write a check.

UNIDENTIFIED FEMALE: It seems like we're working for nothing if they're just coming and just buying their way into college.

UNIDENTIFIED MALE: having a lot of money is not part of what makes a person a person.

(END VIDEO CLIP)

ZAKARIA (voice over): The story behind the scandal was the stuff of tabloids.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: The who's who of coaches, entrepreneurs and celebrities --

(END VIDEO CLIP)

ZAKARIA (voice over): The actress Felicity Huffman pleaded guilty to paying $15,000.00 to inflate her daughter's SAT score.

(BEGIN VIDEO CLIP)

FELICITY HUFFMAN, ACTRESS: I want to model for my daughters having a voice in the world and you know that means having influence and having power and to tell you the truth having money.

LORI LOUGHLIN, ACTRESS: We may have -- well, he may have embellished, lied a bit on our application.

(END VIDEO CLIP)

ZAKARIA (voice over): Lori Loughlin and her husband pleaded not guilty after allegedly spending half a million dollars to concoct phony profiles of their daughters as accomplished rowers.

Daughter Olivia Jade got into USC, even though she was neither a rower nor a scholar.

(BEGIN VIDEO CLIP)

OLIVIA JADE, DAUGHTER OF LORI LOUGHLIN: I do want the experience of like game days and partying. I don't really care about school. As you guys all know.

UNIDENTIFIED MALE: This is a game. Just realize that this is a game.

(END VIDEO CLIP)

ZAKARIA (voice over): At the center of the scheme, independent college counselor Rick Singer.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: Sir, why did you game the system?

RICK SINGER, INDEPENDENT COLLEGE COUNSELOR: My key method unlocks the full potential of your son or daughter and sets them on a course to excel in life.

DANIEL GOLDEN, AUTHOR, THE PRICE OF ADMISSION: Singer showed an ability to con and dazzle even very successful people.

SINGER: They send their plane to come pick me up. Come to the meeting for a couple hours, two or three hours. Put me right back on the plane, send me to the next place I need to go.

(END VIDEO CLIP)

ZAKARIA (voice over): The Hollywood names made the headlines. But some other parents were the most dumbfounded.

Singer charged this woman $50,000 to have a stranger take her son's ACT. Her name is Jane Buckingham, and she is a parenting expert.

(BEGIN VIDEO CLIP)

JANE BUCKINGHAM, AUTHOR AND TREND FORECASTER: Every working mom comes to me and says how do I do it all? Well, guess what? You can't. No one is Superwoman. So don't try to be.

(END VIDEO CLIP)

ZAKARIA (voice over): She even gave her son's handwriting sample to make the forgery easier.

(BEGIN VIDEO CLIP)

BUCKINGHAM: Also don't let guilt be your guide.

(END VIDEO CLIP) ZAKARIA (voice over): But Buckingham did plead guilty to fraud.

[10:10:07 ]

(BEGIN VIDEO CLIP)

MALCOLM GLADWELL, THE NEW YORKER: Corruption is almost inevitable. It doesn't surprise me the least that some people will try to game the system. The system is inherently phony.

SINGER: It's unbelievable. It is so competitive to get your kid in the school today.

(END VIDEO CLIP)

ZAKARIA (on camera): Frenzied parents lying and paying bribes to give their children a leg up. Not exactly what Thomas Jefferson had in mind when he envisioned the meritocracy.

But the Founding Father could not have foreseen this crazed competition. It's all because a four-year degree has become the great economic divider in America.

People who have one will earn about twice as much in their lifetimes as those who don't. And those who get the golden ticket, an Ivy League degree can, government figures, show earn more than double the income of others college graduates.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Parents get more and more anxious that's why they turn to independent counselors. You know, they're desperate.

(END VIDEO CLIP)

ZAKARIA (voice over): There are at least 15,000 private college counselors in America. You can find dozens of them on YouTube.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: Hey guys, have you ever wondered how to get that elusive wow factor?

UNIDENTIFIED MALE: Today, I want to speak about what you should never speak about during an Ivy League admissions interview.

(END VIDEO CLIP)

ZAKARIA (voice over): Many are reputable. But they are largely unregulated, even as their business is exploding.

(BEGIN VIDEO CLIP)

ALLEN KOH, CEO, CARDINAL EDUCATION: We decline families all the time. A C average isn't going to get you into Harvard. And there's nothing any consultant is going to do about that or any legitimate consultant.

(END VIDEO CLIP)

ZAKARIA (voice over): Private counselor, Allen Koh likes to start his clients early.

(BEGIN VIDEO CLIP)

KOH: Ideally, the first time we're talking to them is fifth grade. The youngest we've got for college consulting would be third grade.

(END VIDEO CLIP)

ZAKARIA (voice over): You heard that right. Third grade. Co-shared clients with Rick Singer, but says he had no idea what Singer was doing.

(BEGIN VIDEO CLIP)

KOH: I was shocked that I knew someone who did this. I was shocked that this was even possible.

(END VIDEO CLIP)

ZAKARIA (voice over): And something else surprised him. The sums of money involved in the scandal.

(BEGIN VIDEO CLIP)

KOH: I think a lot of people were shocked because they were so big. I was shocked because they were so small.

Our most expensive college application package is $350,000.00.

(END VIDEO CLIP)

ZAKARIA (voice over): That price doesn't even include test preparation.

(BEGIN VIDEO CLIP)

KOH: Everything is ala carte for a test prep. For families who have special circumstances, we will create packages that can break a million dollars.

(BEGIN VIDEO CLIP)

QUESTION: Mr. Singer, do you have anything to say to the students who are in college right now and what they're going to do to their life?

(END VIDEO CLIP)

ZAKARIA (voice over): Money is at the heart of the college admissions scandal, but more troubling than the bribes paid are the legal ways that money is used to corrupt the process. Wealthy parents spend lavishly to prepare their children. (BEGIN VIDEO CLIP)

DANIEL MARKOVITS, AUTHOR: From childhood on, they are pushed, they are prodded. They are in the hands of tutors, coaches, test preparation.

(END VIDEO CLIP)

ZAKARIA (voice over): And it pays off. If you make over $200,000.00 a year, your kids will score on average 400 points higher on the SAT than kids from low income families.

Wealth also give students a big advantage if their parents are donors.

(BEGIN VIDEO CLIP)

SINGER: At some schools, giving $10 million isn't enough because $10 million makes no impact on their school. They want $30 million, $40 million, $50 million.

(END VIDEO CLIP)

ZAKARIA (voice over): Rick Singer convinced parents that his schemes were actually a bargain.

(BEGIN VIDEO CLIP)

DANIEL GOLDEN, AUTHOR: He was saying to the parents, yes, you're paying the hundreds of thousand dollars that this is going to save you money. Otherwise, you'd have to give $10 million to one of these schools to get your kid in.

(END VIDEO CLIP)

ZAKARIA (voice over): Dan Golden is a Pulitzer Prize winning journalist. He wrote a bestselling expose a called "The Price of Admission."

At his own alma mater, Harvard, he looked at how often the children of big donors gained admission.

(BEGIN VIDEO CLIP)

GOLDEN: Harvard has this group called the Committee on University Resources, something like 400 people. Then I came across Jared Kushner's parents on this committee. And I was interested because most of the people on the committee were alumni. And Jared Kushner's parents had no affiliation with Harvard.

(END VIDEO CLIP)

ZAKARIA (voice over): White House adviser, Jared Kushner, then an unknown teenager applied to Harvard.

(BEGIN VIDEO CLIP) GOLDEN: I began speaking with people were familiar with Jared

Kushner's high school record. And it turned out he was not a particularly outstanding or motivated student. And there was no lack of people willing to to attest to that.

(END VIDEO CLIP)

ZAKARIA (voice over): Charles Kushner had donated $2.5 million to Harvard, Jared got in.

(BEGIN VIDEO CLIP)

GLADWELL: So what I don't understand is how is it that Harvard can let Jared Kushner buy his way in, but it doesn't take a hit reputationally.

We should adjust and just say, oh okay, so that's what a Harvard degree means. All right.

[10:15:09]

ZAKARIA (voice over): The Kushner family has said there is no connection between the donations and Jared Kushner's acceptance. Harvard does not comment on individual applicants.

Ivy League schools do point out that large donations give them the chance to educate students who could not otherwise afford them. They also contend that some children of large donors are rejected.

What is clear is that in this meritocracy, it still matters who your parents are, especially if they went to the school of your choice.

Legacy admission give strong preference to the sons and daughters of alumni.

(BEGIN VIDEO CLIP)

GLADWELL: Legacy admissions, the idea that you got a special break as your parents went there. Why? Is this feudal England? I can't even imagine what the thought processes is.

GOLDEN: They're terrified of what would happen to their fundraising if they got rid of legacy preference, you know, they believe that a lot of alumni donate in the hopes of getting their children into the school.

(END VIDEO CLIP)

ZAKARIA (voice over): According to "The Harvard Crimson," about one third of last year's freshman class had relatives who went to Harvard.

Legacy admission is deeply entrenched at many top tier schools. To understand where it all began, let me take you back to a troubling chapter from more than a century ago.

(BEGIN VIDEO CLIP) UNIDENTIFIED MALE: They founded a school that their sons might absorb

the accumulation of man's knowledge and wisdom.

(END VIDEO CLIP)

ZAKARIA (voice over): In the early 1900s, the number of applications from Jewish boys to elite schools began rising.

(BEGIN VIDEO CLIP)

NICHOLAS LEMANN, AUTHOR, THE BIG TEST: They tended, on average to over perform academically and to have a sort of education obsessed culture.

(END VIDEO CLIP)

ZAKARIA (voice over): Anti-Semitism was far more prevalent then and concern grew over the number of Jews at Ivy League schools.

(BEGIN VIDEO CLIP)

LEMANN: They came knocking at the door of the Ivy's. And the Ivy's were very uncomfortable with that.

(END VIDEO CLIP)

ZAKARIA (voice over): At Harvard, President Abbott Lawrence Lowell openly called it the Jewish problem. His solution, count the Jews to see how quickly their numbers were rising.

(BEGIN VIDEO CLIP)

GOLDEN: They felt that, you know, Jews will take over.

(END VIDEO CLIP)

ZAKARIA (voice over): According to the historian Jerome Karabel, the administrators poured over records, but it wasn't always clear who was Jewish. So a ranking system was used.

J1 for students who were clearly Jewish, J2 more than likely Jewish, J3 could be Jewish. The findings in 1922, Harvard was 21 percent Jewish.

The President Abbott Lawrence Lowell decided to take action.

(BEGIN VIDEO CLIP)

GOLDEN: I am instituting a Jewish quota.

(END VIDEO CLIP)

ZAKARIA (voice over): There was strong push back to the ugly idea of counting Jews.

(BEGIN VIDEO CLIP) GOLDEN: They looked for ways to hold down Jewish enrollment without

actually having a specific Jewish quota number or anti-Jewish policy.

(END VIDEO CLIP)

ZAKARIA (voice over): Several other Ivy League schools -- Yale, Columbia -- we're also dealing with the so-called Jewish problem.

One answer turned out to be legacy admissions.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: They want another greater society of free and enlightened men.

(END VIDEO CLIP)

ZAKARIA (voice over): Schools began giving preference to the sons of alumni. The idea was, if they did so, they would not be able to take in as many Jews.

Up next, the real corruption. Sports. Rick Singer's dark scheme.

(BEGIN VIDEO CLIP)

QUESTION: What do you want to say to your former players?

(END VIDEO CLIP)

ZAKARIA (voice over): To cash in on the enormous power of college coaches.

(COMMERCIAL BREAK)

[10:21:48]

(BEGIN VIDEO CLIP)

QUESTION: Mr. Meredith, what do you want to say to your former players? Do you have any remorse, Mr. Meredith? Your former players who trusted you --

(END VIDEO CLIP)

ZAKARIA (voice over): Yale's soccer coach took over $400,000.00.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: John Vandemoer pleaded guilty to taking hundreds of thousands of dollars in bribes --

(END VIDEO CLIP)

ZAKARIA (voice over): Stanford sailing coach agreed to take over $600,000.00 for the sailing team.

(BEGIN VIDEO CLIP)

QUESTION: The F.B.I. believe that you UT tennis head coach was paid more than $90,000.00.

QUESTION: Any comment?

(END VIDEO CLIP)

ZAKARIA (voice over): In all, 10 coaches and athletic officials were accused in Rick Singer's scheme. Five pleaded guilty and five not guilty.

(BEGIN VIDEO CLIP)

QUESTION: All the students that were qualified, they were cheated out of scam.

QUESTION: Students were kept out of schools because of what you did. What's your reaction --

(END VIDEO CLIP)

ZAKARIA (voice over): It's no coincidence that college sports is at the heart of the biggest college admissions scandal in history.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Singer worked with the parents to fabricate impressive athletic profiles for their kids.

(END VIDEO CLIP)

ZAKARIA (voice over): Singer knew that the recruitment of athletes was a weak link in the admissions process.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: The student's athletic credentials have been fabricated.

UNIDENTIFIED FEMALE: Charging documents say Erns accepted millions of dollars in bribes.

(END VIDEO CLIP)

ZAKARIA (voice over): Coaches had enormous choose their recruits. power to

(BEGIN VIDEO CLIP)

QUESTION: What made you want to plead guilty?

(END VIDEO CLIP)

ZAKARIA (voice over): It was tough to bribe a whole committee, but you could bribe one person. Schools say they were addressing the problem, stressing that they were

victims in Rick Singer's scheme.

But the system they created lives on where some kids get huge advantages in admissions through the side door of athletics.

(BEGIN VIDEO CLIP)

GOLDEN: They weren't the victims. I mean, that's ludicrous. They set up the system that favors wealthy people and that made this scandal possible.

(END VIDEO CLIP)

ZAKARIA (on camera): When people think of college sports, they often think of all American favorites like football and basketball, sports with lots of publicity and many low income and minority students.

But there is also rowing and lacrosse and water polo, and other sports that a lot of rich white kids play and that many college applicants can afford.

The elite colleges reserve a huge number of slots for all athletes. More than 30 percent of the class in some schools, and they dramatically lower admission standards to let the athletes in.

(BEGIN VIDEO CLIP)

GOLDEN: Of all the preferences, the preference for recruited athletes is the biggest in terms of how much it helps candidates.

(END VIDEO CLIP)

ZAKARIA (voice over): Take Harvard for example. Every applicant's academic record is ranked on a scale from one to six, with one being the highest.

Those who scored a four who were not athletes got in less than one percent of the time, but the athletes who scored a four got in around 70 percent of the time.

Harvard claims that no one is admitted based on one single trait. Still, admissions at elite schools for athletes like lacrosse players is often effectively affirmative action for rich white kids.

[10:25:15]

(BEGIN VIDEO CLIP)

GLADWELL: You can play this absurd game where you have Affirmative Action Program for which white people because you have a backdoor for these sports.

(END VIDEO CLIP)

ZAKARIA (voice over): Rich parents spend loads of money to help their kids become recruit worthy athletes. Paying hefty sums for coaching and camps.

Meanwhile, of course, many public school kids don't even have access to posh sports like golf and sailing.

(BEGIN VIDEO CLIP)

GOLDEN: There's only a certain families that can afford to have their kids play some of these sports.

(END VIDEO CLIP)

ZAKARIA (voice over): So why do elite American colleges favor athletes in the first place? After all, other countries don't have these kinds of preferences for baseball players or skiers?

(BEGIN VIDEO CLIP)

GLADWELL: People would look at you over in England or in Germany and say, wait, what?

(END VIDEO CLIP)

ZAKARIA (voice over): One big reason for the favoritism is tradition.

In the early 20th Century, American colleges saw athletics as a way to mold young men's character.

College sports grew wildly popular with the public spawning powerful athletic departments and loyal alumni.

(BEGIN VIDEO CLIP)

LEMANN: I think if you gave the average college president at these kinds of colleges a few drinks and said, do you want to dial this down? They'd say yes, but they'd say the alumni, just hear from them immediately, and they put up a big fuss.

(END VIDEO CLIP)

ZAKARIA (voice over): College presidents like to talk about meritocracy, but in fact they kept key elements of the old aristocracy in place, like athletics and legacies.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Yale was founded more than two centuries ago by 10 congregational clergymen.

(END VIDEO CLIP)

ZAKARIA (voice over): When one college president tried to take on legacies, all hell broke loose.

Kingman Brewster was Yale's President in the 1960s, famous for finally admitting women to the college. He was eager to make Yale more inclusive, recording more applicants from public schools. And he slashed legacy admissions by almost half in just one year.

(BEGIN VIDEO CLIP)

LEHMANN: Disaster, immediate disaster.

(END VIDEO CLIP)

ZAKARIA (voice over): The Alumni revolted. Yale graduate, William F. Buckley Jr. lamented that the son of an alumnus now has less of a chance of getting in, then some boy from PS 109 somewhere.

(BEGIN VIDEO CLIP)

LEMANN: Alumni contribution just fell off a cliff.

(END VIDEO CLIP)

ZAKARIA (voice over); Eventually Brewster gave in. And ever since, no Ivy League school has dared to take on the admissions preference for alumni children.

(BEGIN VIDEO CLIP)

GOLDEN: They're terrified of what would happen to their fundraising if they got rid of legacy preference.

(END VIDEO CLIP)

ZAKARIA (voice over): But there are all great schools out there that avoid legacy preference. And they're doing just fine.

CalTech doesn't cater to our alumni kids. And it has one of the largest endowments in the nation. Even Oxford and Cambridge with their centuries of hallowed tradition refuse to favor alumni children.

Their endowments are well into the billions.

(BEGIN VIDEO CLIP)

GOLDEN: We like to think in this country that England is the land of social class and aristocracy and America is the land of democracy, but at least in college admissions, the reverse of appears to be true.

(END VIDEO CLIP)

ZAKARIA (voice over): When you add up all the admissions preferences at elite schools, like legacies, recruited athletes and children of wealthy donors, you get an astounding number.

At some schools, it's around 50 percent of the class.

(BEGIN VIDEO CLIP)

GLADWELL: That is the behavior that's typical of some more of an irrelevant, corrupt private club.

(END VIDEO CLIP)

ZAKARIA: Coming up, there's one school in America that's doing admissions entirely differently.

At Berea College in Kentucky, in order to get in here, you must be poor. When we come back.

(COMMERCIAL BREAK)

[10:32:44]

FAREED ZAKARIA, CNN HOST (voice over): Graduation day. It is a celebration of one of America's most cherished ideas. If you're talented and work hard enough, you can make it to the top.

(BEGIN VIDEO CLIP)

TIM COOK, CEO, APPLE: It's time for you to lead the way.

MICHELLE OBAMA, FORMER FIRST LADY OF THE UNITED STATES: You are the living, breathing proof that the American Dream endures in our time -- it's you.

(END VIDEO CLIP)

ZAKARIA (voice over): To make it into Yale Law School, the top law school in the country, students must compete in a rigorous academic contest.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: You're sitting here today because you ranked among the top three tenths of one percent of a massive meritocratic competition.

(END VIDEO CLIP)

ZAKARIA (voice over): Owning the degree from Yale is considered a golden ticket to the American elite. It's an exclusive club that includes Bill and Hillary Clinton and four sitting Supreme Court justices.

But in 2015, students at commencement got some bad news from this man. The meritocracy is a broken system.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: We've constructed a gilded cage that ensnares the rich and excludes the rest.

(END VIDEO CLIP)

ZAKARIA (voice over): Yale Law School Professor, Daniel Markovits told students that the payoff they've been working for their whole lives is actually a trap.

(BEGIN VIDEO CLIP)

DANIEL MARKOVITS, YALE LAW SCHOOL PROFESSOR: Working from 8:00 a.m. until 8:00 p.m., six days a week, without vacation or sick days, for every week of the year.

(END VIDEO CLIP)

ZAKARIA (voice over): In other words, the system isn't even working for the winners.

(BEGIN VIDEO CLIP)

MARKOVITS: We're now in a state in which a narrow elite is much too rich for society's good, and works much too hard for its own good.

(END VIDEO CLIP)

ZAKARIA (voice over): Markovits' main argument is that by rewarding a specific kind of achievement above all else, the meritocracy is making Americans miserable, and creating a hyper unequal society.

(BEGIN VIDEO CLIP)

MARKOVITS: If you're a middle class kid or a poor kid, you simply can't compete with the education that rich kids are getting.

(END VIDEO CLIP)

ZAKARIA (voice over): That's one of the reasons why at 38 of the most elite colleges including Yale, Princeton, and Brown, you'll find more students from families in the top one percent than the bottom 60 percent.

[10:35:10]

ZAKARIA (voice over): But there is another way, an alternate universe if you will. At a small Liberal Arts college in the foothills of Appalachia.

Berea College only admits high performing low income students who have been excluded from our modern meritocracy.

Rich kids need not apply. You heard that right. Berea will reject their applications. It doesn't want their money. This college is completely free. Ninety eight percent of freshmen are Pell Grant recipients and come from families that earn an average of $28,000.00 a year.

These are some of the poorest kids in the country.

The President of Berea, Lyle Roelofs believes this is one of the key ingredients to its success.

(BEGIN VIDEO CLIP)

LYLE ROELOFS, PRESIDENT, BEREA COLLEGE: At Berea, no student feel stigmatized because all students come from the same economic context.

(BEGIN VIDEO CLIP)

ZAKARIA (voice over): All students are required to work for the college at least 10 hours a week.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: I know some students who looked at free college and found Berea.

UNIDENTIFIED FEMALE: This sounds fake. I was just like, there's a catch.

UNIDENTIFIED MALE: I thought it was a scam. There's no way.

(END VIDEO CLIP)

ZAKARIA (voice over): But there is a way. In 1855, the college was founded to provide an education for students excluded from elite colleges, including women and freed slaves.

How did they do it? Well, it now has a $1.2 billion endowment.

While Ivy League schools still admit the children of wealthy donors and legacies, largely for the sake of their endowment. Berea has made it to the list of America's hundred richest colleges another way. Shrewd investing and good old fashioned generosity.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Come join us. It's giving day.

ROELOFS: There's a fundamental impulse in American philanthropy to give opportunity to those who deserve it, but lack the means and we've tapped into that for many, many years.

(END VIDEO CLIP)

ZAKARIA (voice over): If you're wondering how Berea ranks academically, this year, it jumped 15 points in the U.S. News and World Report rankings, making it one of the top 50 Liberal Arts colleges in the country.

But Berea's President has pledged not to publicize its rankings. He believes they fuel the college admissions frenzy by focusing on the wrong metrics -- money and status instead of quality.

Berea's admissions office doesn't obsess about test scores or grades. Instead, it identifies students who display extraordinary potential like, McCall Engle, a senior who had always dreamed of going to college.

McCall now works in the Admissions Office as a student manager and studies Marketing. He spends any moment he can on his true passion, making music. (BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: I feel like this is somewhere I belong. I felt very welcomed as soon as I got to the college and was shown like all these different resources like, wow, these people actually want to help me succeed.

(END VIDEO CLIP)

ZAKARIA (voice over): The College has built a culture in which students help each other to succeed.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: It means the world to me, I feel like this is home for me. I do feel like this is home for a lot of people.

(END VIDEO CLIP)

ZAKARIA (voice over): Dan Markovits thinks that Berea's model provides one possible solution to the madness of the meritocracy.

(BEGIN VIDEO CLIP)

MARKOVITS: Excellent education is an education that teaches you what you need to know, the knowledge and the skills that you need in order to do good work that's useful.

UNIDENTIFIED MALE: Dig deeper, dig deeper, dig deeper into which path is the clearest one to take that will make you become successful.

MARKOVITS: The universities are realizing that their current business model is just too hungry for assets and status and privilege. And they've got to diversify.

(END VIDEO CLIP)

ZAKARIA (voice over): Up next, the explosive battle in college admissions over affirmative action.

(COMMERCIAL BREAK)

[10:43:09]

ZAKARIA (voice over): Affirmative action --

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: Affirmative action is leveling the playing field.

(END VIDEO CLIP)

ZAKARIA (voice over): To understand just how politically charged the issue is, consider this.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: One of the most important Civil Rights cases in over 20 years.

(END VIDEO CLIP)

ZAKARIA (voice over): One landmark Supreme Court ruling still stands as the benchmark for minority college admissions, but it came over 40 years ago.

And it involved a white man. Allan Bakke sued the medical school at the University of California Davis for reverse discrimination.

The university had a quota. It reserved 16 spots for minority students. Bakke argued he was academically more qualified than the students who filled the quota.

The Court ruled in his favor in 1978. Racial quotas were deemed illegal.

But affirmative action wasn't dead. The court also said that race could be considered in admissions, but only as one of many factors.

And now, another legal battle, threatening to end affirmative action once and for all. This time the scene is Harvard.

Asian-American sued the school charging that Harvard Admissions Offices disregard their sterling test scores and grades and hold them to a higher standard. And though a Federal judge ruled earlier this month siding with the university, the case is far from over.

[10:45:11]

ZAKARIA (voice over): That's because the man behind the lawsuit is Edward Blum, one of the nation's most influential and conservative opponents of affirmative action.

(BEGIN VIDEO CLIP)

EDWARD BLUM, STRATEGIST: Harvard systematically raises the bar for Asian-Americans and systematically lowers it for whites, African- Americans and Hispanics.

(END VIDEO CLIP)

ZAKARIA (voice over): Blum has vowed to appeal that decision and many believe it will end in a national show down at a Supreme Court dominated by conservatives, many of whom are longtime skeptics of affirmative action.

(BEGIN VIDEO CLIP)

DANIEL GOLDEN, AUTHOR, THE PRICE OF ADMISSION: One of the ironies of the Harvard case is while it wallet pretends to be about discrimination against Asian-Americans in admissions, it's really not. It's really an attack on affirmative action for blacks and Hispanics. (END VIDEO CLIP)

ZAKARIA (voice over): But many colleges feel that affirmative action is still badly needed in admissions. A recent analysis done by "The New York Times" found that black and Hispanic students were more underrepresented at elite colleges than 35 years earlier.

ZAKARIA (on camera): At the center of all this is a complex question with no easy answer. If as Thomas Jefferson once posited, we should have a meritocracy, what he called an aristocracy of talent, then grades and test scores should be the deciding factor.

But the opposing argument goes, those are just numbers that do not always tell the story of how deserving and how enriching students from different cultures races and backgrounds may be.

ZAKARIA (voice over): But here's what happens when only academic merit is considered in admissions.

Stuyvesant High School in New York City. It is one of the nation's top public high schools. Graduate from here and you are likely to get into an elite college. So how do you get in? Take a single standardized test. It might sound fair. But this is the meritocratic outcome.

In a city that is less than 15 percent Asian, Stuyvesant is almost 75 percent Asian. These demographics raise the question, can and should a standardized test decide who has access to the best schools?

(BEGIN VIDEO CLIP)

MARKOVITS: The way in which New York tried to deal with elite education and inequality is by having something like a fair test as a way of deciding who gets the elite education.

And the consequence of that has been more and more unfair outcomes.

(END VIDEO CLIP)

ZAKARIA (voice over): In this year's freshman class, only seven black and 33 Hispanic students were offered places out of nearly 900 coveted spots.

(BEGIN VIDEO CLIP)

NICHOLAS LEMANN, AUTHOR, THE BIG TEST: If you want to admit by those kinds of tests, it is at war with also wanting to admit more black and brown students. There's a historic racial gap on average in these kinds of academic test scores. It's one of the most consistent findings in social science.

The gap is actually closing. But it's always been there and so you have to dial down the importance of the test to dial up your racial diversity.

(END VIDEO CLIP) ZAKARIA (voice over): Mayor Bill de Blasio has called to scrap the

current admission system in the name of diversity.

The furious reaction from parents and lawmakers led the Mayor to say he was going back to the drawing board.

(BEGIN VIDEO CLIP)

MAYOR BILL DE BLASIO (D-NY): The attempt we made to address it was not the just was not effective, and we have to come up with a new approach.

(END VIDEO CLIP)

ZAKARIA voi: Meritocracy versus diversity. Must one come at the expense of the other?

(BEGIN VIDEO CLIP)

LEMANN: The two are in conflict. It's really one of the big fights in higher education.

(END VIDEO CLIP)

ZAKARIA (voice over): Coming up next, my solutions.

(COMMERCIAL BREAK)

[10:52:25]

ZAKARIA (on camera): Let me begin with a confession. I'm a member of the meritocracy. I went to an elite college and then graduate school on full scholarships. I later served on the Board of my undergraduate alma mater.

So I both benefited from the merit based system and also seen it from the inside and know that college admissions officers are overwhelmingly decent and honorable people, actually trying very hard to balance all the factors that they are being asked to consider when passing judgment on 18-year-olds.

And yet, there is obviously a problem with America's meritocracy. And the admissions scandal only revealed a small part of it.

The critiques generally take one of two angles. The first is that America's colleges don't practice what they preach. That merit based selection makes sense, but in fact, almost all colleges have retained or even enhanced some of the old aristocratic elements of admission, such as legacies and athletic recruitment.

Or they forsake merit and lower the bar for well-intentioned reasons to lead and more students from certain minorities at the expense of others.

This view holds that what is wrong with the meritocracy is that it is actually not meritocratic enough. There is another critique though that is more sweeping. It argues

against the whole idea of meritocracy itself. It believes that tests are arbitrary and not fully indicative of talent, that using them to organize and select societies elites as nuts, that it creates an atmosphere of crazy and relentless pressure for those on the inside, and permanent exclusion for those on the outside.

And because performance on these tests and associated rankings can be greatly enhanced by wealth and good education, it does produce a hereditary aristocracy, rather than churning out a set of elites based on ability.

Both critiques have merit. Though I have to confess, I am more drawn to the first, the idea that we need a better meritocracy.

I understand the problems with the idea of merit, but what would you replace it with?

The old system based on bloodlines and birth? Or an entirely subjective process in which admissions officers just pick their favorites?

When you're dealing with tens of thousands of applications, and are able to admit a small number, it means you have to rely on some blunt instruments like tests and grades.

Many criticize the reliance on these kinds of objective indices. But few have been able to propose a workable alternative to them.

ZAKARIA (voice over): That means universities should live up to their ideals rather than admitting athletes and legacies who are unqualified.

[10:55:10]

ZAKARIA (voice over): They should focus on finding bright children from poor backgrounds who have great potential, but don't score as well on these testing measures.

Many elite colleges today take in more students from the top one percent of the income distribution, then from the bottom 60 percent.

It cannot be that those millions of students have no talent. It's just that we don't have a good enough mechanism to find them.

Elite colleges should be taking in many more students anyway. Even as the endowments have grown stratospherically, the class sizes have expanded very slowly.

ZAKARIA (on camera): This emphasis on access should also animate politicians. The biggest problem with American education is that it does very, very badly for poor kids.

As Dan Markovits points out --

(BEGIN VIDEO CLIP) MARKOVITS: ... it comprehensively separates the rich from the rest

in an increasingly unequal America.

(END VIDEO CLIP)

ZAKARIA (voice over): The educational gap between the rich and poor today is greater than between blacks and whites in 1954 when Brown versus Board of Education outlawed school segregation.

ZAKARIA (on camera): The American system of education does not provide many paths for poorer bright kids to move up, which is at the heart of the scandal of our declining social mobility.

Finally, let's take to heart some of the broader critiques of meritocracy itself. Many people succeed in life, even though they do badly on tests.

Tests are not the measure of one's true worth in life nor is it where you went to college. Perhaps the worst aspect of meritocracy is that it allows people who rise to the top to believe that they are better. That they deserve their success, and that those who do not do so well deserve their failure.

It makes us smug and insensitive, reproducing the worse aspects of the clubby aristocracy of old. That is the greatest moral failing of meritocracy. And one that is best countered by recalling the wisdom contained in the Declaration of Independence, the Bible and most of the world's scriptures that all people are created equal and are of equal worth, no matter where they got into college.

I'm Fareed Zakaria. Thanks for watching.

(COMMERCIAL BREAK)

[11:00:00]