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Elite colleges and inequality.

It’s college admissions season, which makes this the perfect time to note that our national conversation about income inequality has mostly spared from criticism one of the country’s principal culprits: elite universities. Perhaps because Ivy League schools and their peers are so frequently attacked by conservatives, liberals have come to reflexively think of them as allies. And it is certainly true that the vast majority of professors, and probably students as well, at elite colleges are liberals. But that does not mean that these institutions always behave in a manner that is consonant with liberal principles.

Take admissions first. It is true that many elite colleges have aggressive financial aid programs that aim to ensure anyone can attend, once they are admitted. But elite schools do far too little to seek out excellent students from low-income backgrounds and underperforming high schools—the very people who are poised to live the American dream of upward mobility.

How do we know that schools are badly failing in this department? Because student bodies at elite colleges tend to dramatically overrepresent students from wealthy backgrounds. As David Leonhardt noted in The New York Times in May, a freshman entering the University of Michigan in 2003 was more likely to come from a family earning $200,000 or more a year than from a family in the country’s lower half. In other words: More students came from the top 5 percent than the bottom 50 percent. What’s more, Leonhardt wrote, the numbers were not much better among elite universities as a whole.

All this while the country’s most selective schools continue the deeply unfair practice of favoring legacies in their admissions process. According to journalist Daniel Golden, 33.9 percent of legacy applicants to the University of Pennsylvania were admitted in 2008, compared with just 16.4 percent of the overall pool. The numbers are even more dramatic elsewhere: At Princeton, in 2009, 41.7 percent of legacies were admitted, compared with 9.2 percent of overall applicants. What sort of institution devoted to meritocracy more than quadruples its admission rate for the children of the well-connected?

But just as significant as who enrolls at the country’s elite colleges is the question of what they do after they leave. This picture is not as clear-cut as the situation with legacy admissions or the income distributions of student bodies. Nevertheless, it still gives reason for concern. In recent years, elite colleges have generally reported that between 10 percent and 20 percent of their students go into financial services, and the numbers grow when you include consulting. These statistics may not seem outrageous on their face, and they have fallen somewhat since the 2008 crash. Yet we would argue that they are still too high. Students who opt for these careers frequently say that they didn’t really want to pursue them, but got tugged toward Wall Street by the prevailing culture on their campuses. This culture often seems to make finance the default option for anyone who is unsure about his or her future. And it would be naïve to think that schools have no control over it. A recent Los Angeles Times story described how, at Columbia, Citigroup recruits students in the university’s candlelit Faculty Club over “French cheeses, strawberries and raspberries served on silver platters.” At Stanford, the Career Development Center offers special access to students for companies that pay a $10,000 fee—a boon to financial firms and other wealthy employers.

Many elite schools do say the right things about trying to push more of their graduates toward public service. And there are plenty of well-intentioned people trying to reverse this situation. At Harvard, one professor has led reflections on the purpose and direction of higher education in America, asking questions like, “Are Ivy League schools simply becoming selecting mechanisms for Wall Street?”

But the fact remains that there is much more elite schools could be doing. They could use their deep pockets to expand fellowship opportunities for students who have just graduated. They could limit the ability of financial services firms to recruit on campus. And, in their admissions process, they could prioritize the selection of students who make clear that they are inclined toward idealistic careers. Combined with more aggressive recruitment of low-income students and an end to legacy preferences, such steps would help elite schools to fully live up to their lofty self-images.

This article appeared in the December 1, 2011, issue of the magazine.