Nobody In Authority wishes to make explicit the extent to which diversity status offsets academic deficiencies.  It's clear, though, from an Inside Higher Ed report, that graduate school admissions and aid committees recognize a trade-off, sort of.
[Michigan education professor Julie] Posselt said that many faculty members justified their reliance on traditional measures of merit by talking about why they are "risk averse" in admissions decisions. A classicist in one of the departments she studied told her that "there’s always a tension here because we’re always under pressure to have good numbers for completing a program, completing it in a reasonable amount of time, and so on. The effect of that is to make you risk averse because it’s not that hard just to go for the students you’re pretty confident can get through.”

A physicist told her: "If you work with the student so closely and then he walks away or doesn’t make it, then it’s a waste of his time and in a way, I mean, it’s our mission to teach, but I’d rather spend my time teaching somebody who actually can continue my mission and then teach other students than somebody who realizes, 'It’s just too difficult. I can’t do it.' "

Grades and test scores are also highly valued by the minority faculty members who were interviewed, even those who said that they planned to make a push on diversity issues later in the process. One minority sociologist is quoted as saying: "You have to be above a bar, and then we can ask the diversity question."

Posselt also found that faculty members frequently were convinced that an emphasis on high grades and test scores protected them. Several used the word "spooked" to describe reading the application of someone who reminded them of an unsuccessful past student.
At one time, "affirmative action" referred to breaking ties among otherwise similarly capable applicants. Perhaps that lives on among admission committees.  Or perhaps experience teaches.

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