<p>I think these people are incredibly naive and unsophisticated if they think that way. Do they seriously think that if they were to take a drive down the street of most affluent area in their town / city, that the people there are overwhelmingly graduates of only the top 20 or so schools? Or if they went to resort areas, like a Palm Beach or Sea Island or Aspen, that the people living in the multimillion dollars houses / condos are overwhelmingly Ivy graduates? It’s sort of a … come ON now, get real. Plenty of “average” state school grads making a heck of a lot of money in the world. </p>
<p>As for payout – my kids are never going to pay me back for their education … so it’s really immaterial to me if they wind up making $50K or $500K a year. I mean, obviously the latter is nicer, LOL - but it’s not coming back to MY pocket in any case.</p>
<p>Going to school for “enriching” one’s live is a noble goal. However, you can afford to have a noble goal, only if you are well-fed and have a roof over your head.
For most common folks who do not have the luxury of having fun, careful consideration of ROI is a prudent thing to do. </p>
<p>Agree with some folks mentioned above: Harvard is far cheaper to attend and ROI is better if you earn less than $60,000/yr. Or even pay $16,000/yr, if you have $160,000/yr income. For an Harvard degree, it is a “steal”. It just so happens that Wall Street and inside of the Belt-Way, there are a lot of people with Ivy ties. For prestige or for the money, Ivy is the way to go. On the other hand, you are always free to pursue any degree in any CC or on-line college of your choice and having fun at it. Welcome to USA: The Land of the Free.</p>
<p>Which would be important if those were the only locations or professions that are worth caring about, and / or the only ways in this world to make decent money. Their importance is SO incredibly overblown on CC - to the point of ridiculousness. Really, CC is sometimes the land of the ignorant when it comes to being aware of the many ways that one can be financially successful and the many places where one can live a very comfortable, upper middle class to upper class lifestyle.</p>
<p>Well, the “for the money” part is disputable, at least for Ivy (and other elite private) full-pays. You really need to crunch the numbers to see if that’s true. If I were thinking about my D1’s college education purely in ROI terms, I’d have urged her to attend our flagship state U (or the neighboring University of Wisconsin, which as a Minnesota resident she could attend for in-state tuition). She’s doing well at her fancy LAC where she’s a full-pay, and if she keeps her focus she’ll come out with a stellar GPA. I have absolutely no doubt she’d also have come out at the very top of her class at Minnesota or Wisconsin, had she ended up there. And if she decides to go to law school (one option she’s contemplating), her LSAT score would be essentially the same whichever of these schools she attended. Same GPA, same LSAT score, essentially the same prospects of gaining admittance to an elite law school whichever school she graduates from. The difference financially, though, is that if she went the public route, I’d have an extra $100K or so—more, actually, because I could invest that money in the meantime—to help her through law school, so she comes out the other end with a lot less debt, and therefore significantly more discretionary income. If she goes to law school it will be primarily her law school relationships and alumni contacts that will assist her career, not so much undergrad. Same financial logic if she were to choose to go to med school. So strictly from a ROI perspective, going to a pricey private college for undergrad as a full-pay may not make the most sense financially, at least for those headed for graduate-level professional schools.</p>
<p>But I don’t look at it that way. My D is where she is primarily for the quality of the education; not even so much for the quality of the experience, as $200K+ is a pretty steep price for 4 years of pleasure, IMHO (though I certainly don’t begrudge her an enjoyable 4 years, in fact I hope it’s terrific—but that’s just a bonus). A top-notch education, however, is something that will pay intellectual and psychic dividends for a lifetime, regardless of what she ends up doing for a living or how much she ends up earning. Not to say she couldn’t piece together a pretty darned good education at a Minnesota or a Wisconsin; but it might be a bit spottier, with some gaps, whereas at the particular LAC she’s attending it’s pretty much guaranteed to be stellar across the board. And to me, that’s worth every penny I’m pouring into it, painful as it may be to take that hit to my personal finances.</p>
<p>^Well said. If you’re simply looking to “make decend money” and “live a very comfortable, upper middle class to upper class lifestyle”, then really, agree that any college will do when you already have the academic potential. Attending a prestigious university in no way guarantees that one will have an easier time or a high paying job upon graduation. I have friends at Harvard who are studying history and linguistics etc and are fully enjoying their undergraduate experience. If money and future earning are so much more important, it would’ve been better for them to choose a cheaper school and major in something with better financial return instead.</p>
<p>Also, beware that the study is showing that it is those who have the ambition to apply to top schools but somehow choose not to attend who end up having the same earnings as those who are admitted and did attend. Knowing people at top uinversities, I’m sure they will be successful at whatever they set out to do no matter where they are or what college they attend.</p>
<p>I see attending Harvard (and YPSM et al.,) not as a guarantee of higher income, but as a “bucket list” item. You only live once. If you are lucky enough to be one of the relatively few recipients of an offer to attend one of these fine institutions, you ought to take it, even at substantial cost.</p>
<p>I read an indepth report on this study on one of recent flight. If I remember them right, the study followed those who applied to HYPSM type of elite but either did not get in or chose not to go vs those who went to one of those elite schools. Their findings is that there is no different between those two groups. Therefore, going to those elites with debts has a poor return on investment.</p>
<p>I don’t think one needs a study to know that. It is the student who will make a difference, not the school. </p>
<p>On the other hand, had they compared the average of those who went to elite U vs those who went to other schools (below top 200). If the graduation rate is also included. That outcome might be different.</p>
<p>Read some of the posts in this threads. It is very interesting that “experiences” has been mentioned many times. i.e. PG wrote
</p>
<p>PG, please tell us what kind of unique experiences are you talking about? What do you think they might miss had they go to the honor college of any number of good flagship state schools?</p>
<p>Dad II,
One way I look at it is by analogizing it to playing golf. You can learn to play a good game, maybe even become a pro, by playing on your inexpensive municipal course. Some public courses are quite challenging and have 18 or 36 holes of play, just like every other golf course. </p>
<p>On the other hand, you can try to join Augusta Golf Club, which only admits about 300 members and has one of the top courses in the world. It is a terrible “investment” of your money, if you look at it simply as a way to just play a round of golf. It is the benefits (friendships and networking and great service and aesthetics, etc.) other than just playing the game that makes it worth the money.</p>
<p>I also have never looked upon it as long-term ROI. I never look at life as cumulative financial earnings, but cumulative other ‘earnings.’ Nevertheless, if one is fortunate enough to get into a fine undergrad school (esp. with generous financial aid), and/or a fine grad school with same, I think the connections/contacts/opportunities via “the name” and the profs themselves are well worth it in terms of launching that career. Anything can interfere with any career once established – from family, to moving, to all kinds of exigencies & unpredictables. Anyone who is so naive as to assume that an elite education “guarantees” a wealthy and trouble-free life in the 21st century has been smoking something, or is not caught up with modernity.</p>
<p>Nice headline–Harvard was not in the group of colleges studied.</p>
<p>It’s an interesting paper but not without weak points. Capital gains were not included in the earnings measure. The sample was restricted to people earning minimum wage or above. This could be a problem as married women with children are less likely to work at higher income levels. In their basic model, the return to college average SAT for women was lower than that for men. Returns increase as one works longer and are positively correlated with higher individual SAT score. Model does not control for college choice motivated by financial aid as that would be very difficult.</p>
<p>Around here it is an open secret that your threads will have more views and posts if it has the word “Harvard” in the title. You could do a little experiment- start 2 threads with everything else the same except a random “Harvard” thrown in.</p>
<p>While I appreciate the economic exercise of this article (although there are problems with the methodology), it’s main point is ridiculous. Everyone KNOWS that more/better education has never equaled more wealth. Car mechanics makes more per hour than clinical psychologists, salesmen with associates degree can make more than many teachers with masters degrees. It’s always been this way. </p>
<p>There are, of course, financial ramifications to almost all decisions we make,but would you choose to not have a child because childless couples have a higher standard of living? Would you choose to not give to charity, because keeping that money improves your bottom line? </p>
<p>There are many reasons we choose one school, one method of education, one career path, over another. Economics can be part of it, but only one piece of the puzzle.</p>
<p>I look at it rather like taking a trip to Europe (or insert other destination). Whether it “pays out” is really not the point of the endeavor. It’s about the experience.</p>
<p>An economist named Daniel Hamermesh at the University of Texas has done some interesting work on this. He and his co-investigators actually tracked UT grads by major over a series of classes going back to the 1980s, and surveyed them for their actual salaries. Not surprisingly, there were huge variations by major, with “hard” (quantitative) business majors earning the highest, engineering majors next, and education majors at the bottom earning approximately 1/3 as much as those at the top. But once they controlled for just a few factors—SAT scores, hours worked, number of advanced math/science courses taken, advanced degrees, HS and college GPAs, and gender distribution (women earned substantially less than men across all majors, so the more women in the category the lower the average salary)—they found that choice of major alone had very little effect on subsequent earnings. In part, then, certain majors might produce higher-earning alums because they attract the most capable, hardest-working, and most educationally motivated students. </p>
<p>Particularly interesting in this regard, their study treated Plan II (UT honors college) students as a separate “major,” even though those students were in fact distributed across a wide variety of majors. Along with the “hard” business majors, Plan II students ended up with the highest average and median incomes, roughly triple the earnings of education majors. But the Plan II students also had, on average, the highest SAT scores—followed closely by engineering majors and “hard” business majors, two other top-earning categories. The lowest earners, education majors, also had the lowest average SAT scores.</p>
<p>I’d like to see more research like this, but this study does at least implicitly suggest—as some have been arguing for a long time—that to the extent alums of elite colleges and universities have higher lifetime earnings, that may be largely the result of a “sorting” function, rather than any value added by the colleges themselves. That is, high SAT-scorers are much likelier than others to have successful and remunerative careers whether they go through the UT honors college or Yale. For job recruiters, then, the elite colleges are simply a convenient place to find a bunch of smart and hard-working kids, because that’s what it takes to get there; but they could find just as many at the UT honors college. And eventually the smart kids will get pretty well matched up with the jobs that pay a premium for their talents, whether they go to UT or an Ivy.</p>
<p>In other words, there seems to be a correlation between the ambition to attend an elite school and one’s future life earnings. While I disagree that college should be viewed solely as a monetary investment, the economic research study itself is very valid and intriguing, and I like how the researchers have thought about questioning common assumptions (or perhaps empirically proving what some people intuitively assume to be true). Future earning is something concrete that can be easily examined, while factors like “intellectual experience” are a little harder.</p>
<p>I’ve benefitted just from knowing / being around really bright people, even if there was no impact on my career. I like knowing that I’m just 1-2 degrees of separation from, say, Bill Clinton or Steven Jobs, even though I’ll never technically benefit from those connections.</p>
<p>They certainly can give someone (and do give many) a financial head start (through contacts & connections). I just thought that lifetime earnings was supposed to be the thrust being argued here. It can be argued that in itself, the head start makes strong lifetime earnings more probable, but as others have noted, it partly depends on one’s field and one’s trade, as well. </p>
<p>I will also argue that there are a lot of unemployed and underemployed lawyers out there (for example). I’ve met several of them personally. Some are changing fields, some are doing two jobs, some are working part-time.</p>
<p>a. Governments spend lots of money on public schools (K-12 and college/university)?
b. Governments spend money on financial aid for students who cannot otherwise afford even the lesser tuition of the public college/university?
c. People with children are concerned about the quality of local K-12 schools when choosing a place to live?</p>