Case Structuring Contest

I came across the following television interview the other day.

The person being interviewed is a leader of a group of college students demanding that all student loans in the U.S. be forgiven, and that college tuition be free.

She was not prepared, and ended up humiliating herself on live national television.

Specifically, she was not familiar with the relevant facts on the issue, did not do her math, and presented her opinion as a conclusion.

The interviewer asked her a few legitimate questions, which quickly revealed her lack of preparation.

In short, she violated every rule of the CEO Code, and all my guidelines for what NOT to do during a case interview (which is a proxy for interacting with senior level clients).

First, the video is worth watching because it discusses a controversial issue. Such issues are precisely when consultants are called in to help make a decision.

Second, the interview very much illustrates the dynamic between an MBB partner and a first year consultant or intern that isn't prepared. In this case, the TV interviewer plays a role similar to an MBB partner, and the student being interviewed plays the role of the new consultant.

Partners do not like people who waste their time (CEOs hate it too). They absolutely will let you humiliate yourself, in part out of a morbid curiosity to see if you will recognize you screwed up and acknowledge it, or continue to insist on the validity of an argument you haven't thought through yet.

Third, rather than solely using this video as an example of what not to do, I thought it would be more constructive to hold a contest to re-write the student leader's argument.

Because you and I don't have access to factual data, it's not realistic to expect anyone to rewrite her entire argument. However, what is reasonable is to structure this "case" and lay out how you would determine your conclusion, what analysis you would do (if you had the data), and why.

In other words, state your hypothesis and how you'd structure a way to test it. For the purposes of this contest, you must assume the same position as the student leader. Your hypothesis must be that it's a good idea to make college tuition free and to forgive all student debt.

The winner gets a $100 donation made in your honor to the U.S. charity of your choice, and will be publicly acknowledged (with your permission) by me for your excellent case structuring skills.

If you're one of the approximately 10,000 people reading this that currently works or previously worked at MBB, you are not eligible to win the prize (but are welcome to participate).

I will post the winning entry on my blog and include it in my email newsletter.

I've never held a contest like this, so I'm curious to see what happens. To submit an entry, post your answer as a comment below.

I will contact the winner privately first to offer my congratulations and to communicate with him or her before posting the winning answer.

UPDATE as of Tuesday, November 24TH AT 8AM ET: New entries are welcome, but not eligible for the prize, as contest has closed.

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79 comments… add one
  • Jan Wilczak Nov 19, 2015, 10:52 am

    Let us restate the problem one more time – make college tuition free and forgive all student debt.
    Firstly – why do we need? What is the problem? How can our society benefit from it? We could say e.g. that providing equal access to education and making it dependent on talents and hard work and now on one’s wallet is one of the basic duties of country. And inequality and discrimination of poorer people is a big problem – if you cannot have rich parents you cannot get good education. And yes, if we make more talented people study, then our country will become more innovative and our economy will thrive.
    We need to know all the facts such as: How many students do we have? How many of them come from rich families? How much are the student loans?
    I believe it’s good to find any good, working examples of our thesis which were successfully introduced somewhere in the world. Among many countries you can study without any tuitions in Austria, Denmark, Finland, Norway, Scotland, Sweden and Germany. Furthermore, even overseas students can study free in those countries. Going step further – many of those countries provide big grants and loans for living for students. So yes – it is possible, while still remaining rich country.
    Probable questions (or proactively mentioned):
    1. Financing? I would make thorough analysis about how it works in other countries. We need to know exactly how much it would cost and where to take money from. We could have some professors, economists confirming our analysis. Maybe we could also take money not only from the government but also from private corporations? The conclusion should be that is will pay off as this is some kind of investment in our society. Meaning – we will have better doctors, engineers, and so on…
    2. How long can a person study free? Can I study my whole life? Certainly not. One could be allowed to study one subject, or when abandoning it he could study something else the remaining years.
    3. When would it start? What about students who are in the middle of studies?
    4. What about overseas students?
    The same applies to student loans. We should do our math. Maybe it would be good idea to make student loans forgiven and tuition free based on income (in case the math wouldn’t be on our side). Meaning that poorer people will have free studies and the richest would have to pay.

    • Victor Cheng Nov 25, 2015, 2:34 am

      Jan,

      You narrative asks many interesting questions. However, its unclear to me (and you didn’t explain) how EACH question has the potential to prove or disprove your hypothesis. For example “How long can a person study for free?” if the answer is 2 years does your recommendation switch from free tuition to no free tuition? What if it is 3.5 years? Does your recommendation change?

      If your recommendation would not drastically change due the answer of EACH question you ask, perhaps that question is merely interesting but not essential to disproving the hypothesis.

      -Victor

  • Lou Nov 19, 2015, 10:50 am

    “I’m fighting for free college and full forgiveness on student debt. Given that the burden of college education is bore by either state money or students themselves (assume no scholarship/financial aid), let’s start by looking at state funding. I’d hypothesise that non-ability of states to fund free college is due to less state money as a result of slow economic recovery. I’d test both the numbers of state money and economic trends in the past for information on that, but there are also strong economic recovery evidences that supports an interest rate hike already.

    If there are strong economic recovery data already, then the burden to remain on student selves would only be justified if the lifetime value for these students are lower than the state’s investment. I’d test this by looking into data of average GDP produced by college grad vs. non-college grad, taking inflation into account, and compare with the average tuition fees.

    It would be of able-state’s interest to invest into students if their lifetime value is beyond the investments required to put them through college.”

    • Victor Cheng Nov 24, 2015, 7:44 am

      Lou,

      Your last sentence is the most insightful sentence you wrote. The structuring prior to that sentence seemed loose and not cleanly organized.

      I would suggest starting with your last sentence, making it your first sends, and the explaining what you would have to calculate to determine the two key facets of your argument.

      Victor

  • Nicolas Devriese Nov 19, 2015, 10:49 am

    Hypothesis: it’s a good idea to make college tuition free and to forgive all student debt.

    This case can be broken down into 2 parts:
    In the first part we should analyze if it’s a good idea to make college tuition free and in the second part we should analyze if it’s a good idea to forgive all student debt.

    Firstly, I would like to start looking at the total amount of college tuition spent per year in the US.
    Knowing this number will enable me to know how much additional revenues or decrease in costs we need in order to make college tuition free. At this step I would like to analyze possible new revenue streams (such as increase in taxes, corporate sponsorship etc) and see if it is possible to decrease costs (decreasing professors’ wages , optimizing the colleges’ capacity etc). Then, I would like to see if the additional revenue streams and decrease in costs can counter free tuition by doing the following calculation: (amount of college tuition spent per year in the US) – (new revenue streams + decrease in costs). If this result is equal to 0 or bigger than 0, this means that mathematically we could make college tuition free. On the opposite, if this result is lower than 0 this would mean that it would not be possible to make college tuition free.

    Secondly, I would repeat the same process for the student debts.

    After this analysis I would have a good idea if it’s possible or not to make college tuition free and to forgive all student debt.
    If my analysis is favorable (meaning that we should indeed make college tuition free and forgive all student debt), I should however state some possible risks linked to this decision such as for example: a decrease in quality of education due to lower wages of professors, unsatisfied population due to high taxes etc. that we should take into account.

    • Victor Cheng Nov 24, 2015, 7:39 am

      Nicolas,

      Your structure in part 1 seeks to determine if it is feasible to make college tuition free. By your logic, if you could raise taxes enough could,you make tuition free.

      However, your structure doesn’t account for whether doing so would be s good idea or beneficial.

      The size of the U.S. Economy is approximately $13 trillion gdp. (This information was not provided in the video, so you were not expected to know it.) Total outstanding college debt is $1.3 trillion according to the video. Assuming student loans have a loan duration of multiple years and the portion that is financed is moderate to significant, it’s a reasonable assumption that annual college tuition is less than $1.3 trillion. Given the U.S. Economy is 10 times the $1.3 trillion figure, mathematically one could raise taxes enough to pay for the tuition.

      But just because it is mathematically possible does not necessarily mean it is a good idea. Your structure doesn’t answer that question.

      Victor

  • Nadir M. Nov 19, 2015, 10:44 am

    Same commenter as above, just fixing the formatting since the comment box removed some spacing i had:
    —-

    Hypothesis: its a good idea to make college tuition free and to forgive all student debt

    1-what are the overarching goals
    — Social impact/justice
    — Students will be able to perform better in college
    — Graduates will be able to focus on finding better jobs
    — increase productivity

    2-Economics of the proposal
    — Cost
    — 1 time
    —– What is the total current student debt
    — On-going
    —- Annual tuition fees payable
    —– US Population x college going age people x % that
    actually go to college (include raise in this % since
    more will go to college) x annual tuition fee
    — Benefit
    — Increased productivity (More people able to go to
    college, perform better jobs, make more scientific
    discoveries)
    — Increased taxation from more productive and well
    earning labour force

    3-Viability (Is this even possible)
    — How will this be funded?
    — Increase taxation by x% for top 1% earners/increase
    taxation by x% for upper 50% earners
    — Reduce defense budget by x%
    — Increase corporate tax rate
    — Are there enough jobs for increased # of college
    graduates
    — Due to increased supply will wages for college grads
    drop?
    — Will people who don’t even want a college degree now
    get a college degree
    4-Indirect effects
    — Is there enough supply of colleges? will there be
    congestion in colleges?
    — What will happen to wages of unskilled people?
    — Will college education standard be maintained
    5- Alternatives
    — Mandatory college savings account for each family to
    fund college education from their own income for each
    child

  • Badarinath Grandhe Nov 19, 2015, 10:40 am

    STEPS:

    1.) Understand the core issue in implementing the three options proposed – Obviously costs involved and possible sources of money

    2.) Calculate the total extra costs that are going to incur in implementing the three conditions – Based on current figures and estimating a ball-park figure of possible number of extra students who may join the college

    3.) Feasibility analysis of implementation – Analyze the various sources of revenues, understand the current spending of the government on various sectors and a possible squeeze from those for example defense and increase of taxes and finally come up with a few options

    4.) Understand the implications – Do a benchmark analysis if any other country has implemented such thing and see whether they are successful or not. If yes, try to replicate with some changes to adapt to the home country’s requirements and if no, understand what can be done differently

    5.) Evaluate these multiple options based on the feasibility analysis and come up with three final options or combinations of options to propose a solution to the core problem of how to implement these changes

    6.) If its not feasible, think of any other alternatives to these demands – relax them a bit and come up with some viable demands

    • Victor Cheng Nov 24, 2015, 7:32 am

      Badarinath,

      So if your final recommendation were to recommend free tuition, what answers to your questions would you need to see to feel comfortable with that conclusion?

      Victor

  • George Nov 19, 2015, 10:27 am

    I base my arguments on the information shared in the video solely as I am not familiar with the other discussions regarding the problem.

    My hypothesis is that college tuition should be made free and student debt should be forgiven.

    In order to test this hypothesis I would like to look into 3 main areas:
    1) Potential benefits and drawbacks of relocating government income to forgive student debt
    2) Total yearly spent with college tuition and its trends
    3) Government yearly taxation income and its trends

    Firstly, I would look into the potential benefits and drawbacks of relocating government income to forgive student debt. I imagine such benefits to be long-term and difficult to measure: better educated population contributing more to the development of the economy, less crime, etc. I imagine drawbacks to be: other industry sectors will suffer (e.g. healthcare), other sectors will ask for more money from the government and produce strikes reducing economical output, etc. If the drawbacks would prove too difficult to tackle by the government, I would be in favor of dismissing the hypothesis.

    Secondly, I would look into the total yearly spent with college tuition and its trends. I would calculate this based the total number of students and the average yearly spent with one student. Suppose this is $1.3trillion. If trends would show a significant reduction in yearly spend I would consider that as a positive effect for students to continue their education, otherwise I will consider to be more and more difficult for them to bare with the pay.

    Finally, I would look into the government yearly taxation income and its trends. Suppose this number is currently $1trillion. If the trend would overpass the college tuition in future years I would be inclined to allocate more from the government budget to compensate for the college tuition. If, on the contrary, the trend will be opposite I will investigate other ways, such as laws to prohibit excessively high college tuition.

    To sum up, college tuition should not be made free and student debt should not be forgiven. This is based on the two following reasons: 1) in order to make tuition free the government will need to relocate $1.3trillion, which is not available even if they would tax the top 1% rich with 100% (that would bring in only $1trillion; 2) the current drawbacks of the relation overpass the benefits.

    The solution I propose is a compromise and is two-fold. On the one hand, the government should focus its available financial resources to cover the college tuition as long as other sectors of the economy are not affected. On the other hand, the population should contribute more to the education system – a larger tax can be applied to people who benefitted from the educational system and a smaller tax to those who did not.

    • Victor Cheng Nov 24, 2015, 7:26 am

      George

      Points 2 and 3 felt confusing to me. You indicated what you wanted to measure but I didn’t see the linkage to what you would recommend based on those calculations. The rationale didn’t seem clear to me.

      If yearly tuition was increasing as an overall trend, would that be in favor of advocating for free tuition or the exact opposite? Why? What’s the clear obvious logic?

      Victor

  • Nadir M. Nov 19, 2015, 10:15 am

    Hypothesis: its a good idea to make college tuition free and to forgive all student debt

    1-what are the overarching goals
    – Social impact/justice
    – Students will be able to perform better in college
    – Graduates will be able to focus on finding better jobs
    – increase productivity

    2-Economics of the proposal
    – Cost
    – 1 time
    – What is the total current student debt
    – On-going
    – Annual tuition fees payable
    – US Population x college going age people x % that
    actually go to college (include raise in this % since
    more will go to college) x annual tuition fee
    – Benefit
    – Increased productivity (More people able to go to college,
    perform better jobs, make more scientific discoveries)
    – Increased taxation from more productive and well
    earning labour force

    3-Viability (Is this even possible)
    – How will this be funded?
    – Increase taxation by x% for top 1% earners/increase
    taxation by x% for upper 50% earners
    – Reduce defense budget by x%
    – Increase corporate tax rate
    – Are there enough jobs for increased # of college
    graduates
    – Due to increased supply will wages for college grads
    drop?
    – Will people who don’t even want a college degree now
    get a college degree
    4-Indirect effects
    – Is there enough supply of colleges? will there be
    congestion in colleges?
    – What will happen to wages of unskilled people?
    – Will college education standard be maintained
    5- Alternatives
    – Mandatory college savings account for each family to
    fund college education from their own income for each
    child

    • Victor Cheng Nov 24, 2015, 7:31 am

      Nadir,

      Is each question you ask absolutely essential? Pick any one question, would the answer to that question change your recommendation?

      For example, one of your questions is, “is there enough supply of colleges?”

      Is this a VITAL question? If the answer is “yes” would you change your recommendation from free college tuition to not, or vice versa?

      Force every question through the same test of importance.

      Assume each question costs the client $50,000 in consulting fees to answer (because it often does), did you spend the clients money in the most efficient way possible?

      If the final recommendation were yes, tuition should be free. What answers would need to be true in your list of issues? You didn’t identify those possible answers in advance with suffice clarity that a client could easily understand,

      Victor

  • Adrian Obleton Nov 19, 2015, 10:13 am

    If my hypothesis is that “college in the United States should be free for all students”, there are three assertions that I would need to be true.

    1. A material number of new students will be able to attend school
    2. The economic benefit will outweigh the costs
    3. The quality of education will not decrease

    To expound on the first point, I would need to believe that there are qualified students who currently do not attend college for economic reasons. I define qualified as having grades and test scores indicate at least 90% confidence that they would successfully complete a degree within six years. I would gather that information through statistical analysis of people who have finished degrees and surveys of students who were not able to attend college.

    I would then use the number of qualified students to estimate the economic impact of this proposal.

    I would want to verify four facts to verify that the economic benefits will outweigh the costs. First, the job market could absorb the new students who now have those degrees without meaningfully devaluing the current degree holders. Second I would want to figure out how much value is created by having students without substantial debt who are able to invest in the economy. Third I would want to verify that the decrease in domestic investment created by a tax increase to pay for this program would not outweigh the benefits listed above.

    Finally, I would verify that the quality of the education would stay same by checking two assertions. First that colleges would not lower their admission standards to let less qualified students in. Second, I would want to make sure that employers would not view degrees as less valuable, which would offset the economic gains I had calculated previously.

    If I am able to prove those three things: that it will have an impact on a material number of people, that it will be a net positive gain for the economy, and that the quality of education in the US will not decline, I would believe that college in the US should be free for all students.

    • Lisa Nov 19, 2015, 8:07 pm

      I think the man was condescending and would not have spoken like this to a guy.

      • Victor Cheng Nov 24, 2015, 7:20 am

        Lisa,

        Most of the anchors on that network are condescending to anyone that disagrees with them. He actually wasn’t that bad compared to what I’ve seen on that and other networks around political issues.

        Victor

    • Victor Cheng Nov 24, 2015, 7:18 am

      Adrian,

      This is pretty good. I’ll have to think a bit to see if there any flaws, but nice job.

      Victor

  • Jd Nov 19, 2015, 10:04 am

    apologies I seem to have double replied…

    * My only change is

    a) Calculate or Guestimate the increased college attendance %
    (data needed is the current % of students who DO NOT
    attend college solely because of high tuition fees)

  • Jd Nov 19, 2015, 10:02 am

    a) Expected Costs

    • Total cost of existing student debt
    • % yearly growth trend
    • Average debt $ per new student going to college. This is vital to understand given the debt will increase even more given we will have additional students attending given college is free now.

    b) Funding is available
    • Net worth after 50 % existing tax code for Ultra rich and
    Rich is significantly higher than existing student debt and
    forecasted additional student debt.

    • % yearly growth of net ultra-worth

    c) Benefits

    • College attendance will increase.
    a) Calculate or Guestimate the increased college attendance %
    (data needed is the current % of students who DO NOT
    attend college solely because of college attendance)

    • College drop outs will decrease
    a) Calculate or Guestimate the decrease in drop out %
    (data needed to calculate this is the current % of students
    who drop out of college because of tuition fees)

    Risks
    • Alternatives are available to primary funding mechanism – alternatives such as the government or the middle class is available in case funding from rich is not available any year.

    • Increased pricing of tuition cost in the future.

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