5 Ways Wall Street Is Transforming the Country’s Top Campuses into its Farm System
Across the country, college students are returning for the spring semester, and on many campuses they will be greeted by a swarm of recruiters eager to hire top talent. When I was a student at Duke University, this semiannual recruiting season reminded me of Iowa in the leadup to the presidential primary caucuses—a dizzying number of candidates launch campaigns, with the underdogs struggling to steal attention from the front-runner.
At Duke—and many other elite and Ivy-League schools—I quickly learned that Wall Street’s investment banks, with more funding and more muscle, are the clear favorites.
The Wall Street troops arrive in waves, a veritable force trained to stay on-message. Their tactics are as slick and superficial as any presidential campaign, and in many ways, as pertinent to the country’s future. That’s because Wall Street is winning over the best and brightest with one simple message: if you want to earn the highest return on your college degree, you need to work for us.
This alarmingly effective recruiting operation—which occurs in the fall for full-time hires, and the spring for interns—reveals a dark side of a higher education industry that is under mounting scrutiny. Here are five ways Wall Street is transforming the country’s top campuses into its farm system, as universities eagerly comply.
1. Even freshmen are targets for Wall Street. During my freshman year, three lessons became abundantly clear: 1) summer internships are not an exclamation point on a rÃ©sumÃ©, but a prerequisite; 2) for freshmen and sophomores, nearly all internships are unpaid; 3) the exception is Wall Street, which hires and pays sophomore interns.
By offering what almost no other employer will—paid summer internships for underclassmen—the investment banks stake their claim on top talent, and set a troubling precedent: it is never too early to gain a headstart on your peers. More recently, some banks have even extended their reach to freshmen, wooing them with internships and exclusive networking events. By the time other industries make an appearance during students’ junior years, Wall Street has established its front-runner status.
2. The campaign is relentless and practically unavoidable. In Wall Street’s effort to reach as many students as possible, money appears inconsequential. Bankers fly to campus for a day to hold informal one-on-one “chats” over coffee. They host breakfasts, panel discussions, banking tutorials, interview-prep workshops, and even game shows.
Material decadence becomes a stand-in for more important criteria. The banks’ salaries are the highest, their bonuses the fattest. At their campus events, they forgo the dingy classrooms for a ballroom at a snazzy hotel and fly in a small army of bankers, instead of a single representative, to make a coordinated, convincing pitch. They offer catered spreads in place of free soda, and branded backpacks instead of logoed pens. They treat candidates to dinners at upscale off-campus restaurants, and fly final-round candidates to Manhattan for interviews and an overnight stay.
Students who flirt with Wall Street will likely find that playing its recruiting game is not too different from flying first-class: once spoiled by the luxury, it is difficult to imagine returning to the cramped conditions of coach.
3. A Wall Street intern can earn more in one summer than the average American makes in a year. Wall Street interns often earn the prorated salary of a first-year employee. This translates to about $13,000 for 10 weeks of work, plus a signing bonus or “living stipend” of a couple thousand dollars. Some interns also receive overtime pay.
Consider this: an intern who works 80-hour weeks (as is often the case) and receives time-and-a-half for the overtime work can earn over $30,000 in just one summer, plus a $10,000 signing bonus for accepting a full-time offer at the end of the stint. Walking away at summer’s end with $40,000 may be a best-case scenario, but it can instantly become a campus legend that other students are determined to repeat.
4. The economic collapse barely changed a thing. Wall Street’s recruiting dominance could, and should, have ended in 2008 when the industry collapsed, brought the economy down with it, and asked the taxpayers to pick up the tab. But elite campuses remained what was perhaps the banks’ only safe haven. Colleges and their students casually overlooked abuses that were widely considered to have defrauded taxpayers out of $700 billion. Meanwhile, Wall Street did not bat an eye, doing little to cut back its recruiting efforts.
Today, post-crash, the story remains the same: for the class of 2012, the finance industry attracted more graduates than any other from schools like Harvard, Columbia, Duke, Georgetown, and even the University of Pennsylvania’s engineering school. At Princeton, the number of graduates heading into finance was nearly three times higher than the number entering medical school.
5. Universities are doing nothing to stop this. Elite universities seem unconcerned that their campuses are becoming a Wall Street breeding ground. They indirectly encourage the industry’s presence by charging such exorbitant tuition levels for both undergraduate and graduate degrees, implicitly endorsing lucrative careers over paths like public service, engineering and medicine. And colleges serve as direct enablers by providing these recruiters with facilities and by offering students, via career centers, ample resources to prep them for the finance job search.
If the economic collapse could not reverse Wall Street’s influence on campuses, it is difficult to foresee what, if anything, will. Sure, money and power will always hold appeal, but the rising levels of student debt and the attitude of indifference among universities have created a perfect storm—one that Wall Street has brilliantly exploited.