Access to a college degree begins with the daunting and confusing process of applying to college.  Recent work by Hoxby & Avery (2013) and others has brought attention to college applications with a focus on a theory of undermatch, where highly qualified high school students with low family resources fail to apply to prestigious universities despite the availability of generous financial aid.  This paper examines the underlying causes of low college attainment among minority and low-income students by examining root influences on college application.  In Texas, Hispanics make up the majority of public school students, but Hispanic college graduates apply to college at lower rates than other ethnics groups.  This study examines the causes of racial and ethnic differences in college application testing individual factors, peer group factors, and high school factors. 

We examine the college application behavior of approximately 500,000 high school graduates from two full graduating cohorts in Texas.  Overall, Hispanic college application rates are 15 percent lower than whites and other minorities.  We calculate a “college readiness” measure unique to several Texas public universities for each high school graduate by comparing a student’s test performance and advanced high school coursework with the average performance of students who eventually enroll at each university.  Contrary to other studies, we find that highly qualified Hispanic students are equally likely to apply to college as other highly qualified high school graduates.  The racial gap in applications emerges for students who are marginally qualified for college, and is largest for students who are least likely to be accepted. 

For students who are marginally likely to be accepted (i.e. they are slightly less prepared for college than the average student who enrolls), we examine high school and peer influences on college application choices.  More than other groups, Hispanic students are influenced by the college-going behavior of within-group peers (for example taking courses AP courses and exams), the percent Hispanic the distance they must travel to attend college.  We find that high school attended has a strong influence on Hispanic college application behavior.  In particularly, schools with high Hispanic participation in AP coursework have higher application rates for Hispanic graduates.  These results inform both high school and higher education policy regarding strategies to increase college enrollment through applications by marginal students.  High schools can ensure that college preparatory coursework is provided equitably to Hispanic students, colleges can conduct outreach specific to Hispanic students, and public university systems can expand access by growing research universities near Hispanic population centers.