Is $70,000 per year for an undergraduate degree worth it?

That Forbes article says at the top that “an elite education is likely to leave half to two-thirds of graduates demoralized and broke…” Half to two-thirds? Demoralized and broke? Wow. If that large a percentage looked back on their college investment so negatively, the alumni network would reflect that negativity. Strangely, the author goes on to make an argument that that very same elite education COULD be worth it for some legitimate reasons. Go figure. I guess that “tag line” at the top encourages more readers to dive into the full article.

Financial aid at these colleges is generous and many students attending Ivy League schools, for example, are accumulating less debt at those schools than they might have accumulated at a prominent state institution.

I’d argue that there are a variety of reasons that would justify the big bucks for that elite education, including expanding one’s horizons and being exposed to some of the best and brightest students and professors (but clearly not ALL the best and brightest, just a tighter concentration!!). And remember that even Ivy League schools have distributions, meaning that some of their students do end up at the top of that distribution.

I guess the question is would you rather be making $60k and pay nothing, or make $275k and pay $70k (with the numbers changed depending on the school).

In other words, these colleges (particularly WUStL) are schools for mostly the scions of wealth, with a small number of students from non-wealthy backgrounds.

No. I am confident there are much cheaper options for the same degree. Ridiculous IMHO. Now, if you have $ to blow and want to spend it that way, go for it.

@mom2and:
“While the Ivies have no loan policies and give aid to families pretty far up the income ladder, many of the other privates do not.”

The Ivy-equivalents generally do. And do all the Ivies have no-loan policies now? I don’t believe that’s true.

This seems to be a case where people extrapolate based off of what sports league a school is in.

Thank you Northwesty for taking the time to do those calculations.

For WUSL, a family of 5 with an income of $210,000 with $200K of home equity, $50K in savings (not counting retirement acct), would be required to pay about $67,121 or about 32% of their pre-tax income according to the NPC. No questions on the NPC about state income taxes or whether health benefits are paid for (or cheap). Some people that earn that much money may also be looking at 20% state and local taxes, plus 8% health insurance costs. Not that many people with more than one kid can manage to save enough to retire on, plus another more than $500K to $750K for college (for 2 or 3 kids). Especially if they started out with college debt of their own, had a job loss, or have to pay child care costs for many years.

@warbrain:

“I guess the question is would you rather be making $60k and pay nothing, or make $275k and pay $70k (with the numbers changed depending on the school).”

So my question is, why are you so certain that that would be the two results with those two options given the same individual and major rather than “make $275K and pay nothing or make $275K and pay $70K (really, $280K)”?

Very interesting question. I suspect not, but I’d be interested to know for sure.

Just a minor point but even Harvard expects a student contribution even if parent contribution is zero, $2K or so. That’s true even if the parents’ income is like $20K.

“I guess the question is would you rather be making $60k and pay nothing, or make $275k and pay $70k (with the numbers changed depending on the school).”

That’s not necessarily the only choice. That just happens to be the way the schools currently do it (progressive but then later regressive).

If I’m the CFO at Harvard, why couldn’t I define “full pay” as a percentage of income rather than a flat price? Something like everyone above $250k pays 20% of annual income. Kind of like how the top tax bracket works. Is that any more or less fair than the current way they do it?

Maybe you put a max price on a Harvard year at something like $200k. Which means the folks moaning about having the donut hole are the ones making $1 million a year.

Future CC post: “You know how tough it is to send H $200k a year when only making one stick? Not much left over after paying for a decent house and country club in Greenwich!”

Future CC reply: “Those guys have no complaint. They could just choose to live like someone who only makes $700k and have plenty left over to full pay at H!!”

Harvard still easily sells out its seats every year and also probably brings in more money each year.

Oh whoops, I misread @warbrain’s question.

My bad.

@blossom I did make those choices with my children, two of them went to the state flagship and one to UChicago. That is where they fit, and that is where they wanted to go. BTW, teachers that go to good schools have a lot easier time finding jobs.

All the Ivies have no-loan policies. Some of them set income threshold below which there would be no loan.

They do, however, expect a student contribution from work earnings. See Harvard’s NPC for an example: https://college.harvard.edu/financial-aid/net-price-calculator

For Harvard university for 2017 as a part the operating expenses student income accounts for 21 per cent of the total budget. So do the majority of the posters if they think 70 k is too expensive how about we have public financing of all college education? At Harvard the average cost per year of salaries and wages per student is around 125k all by itself. I guess this brings us back to the fundamental concept of you get what you pay for

13 – what about my idea?

Double or triple the sticker price of Harvard to reflect the true cost of a Harvard education.

But then have the sliding scale go up to $1 million of income. Why does the sliding scale have to cut out at the $250k-ish level?

@northwesty I don’t necessarily disagree!!! I have a question for some of the financial savy posters out there. Berkeley is roughtly twice the size of Harvard in terms of the total number of students yet their operating expense budgets appear to be roughly the same. What does that mean? Does it mean that you get twice as much at Harvard?

You don’t get twice the education, but you presumably get it delivered in a luxury-class fashion at Harvard, versus an economy-class fashion at Berkeley. E.g. Harvard MATH 1a is commonly taught in sections of 20-30 students, while Berkeley MATH 1A is commonly taught in 200-400 student lectures supplemented by smaller discussions with TAs (these are equivalent first semester single variable calculus courses).

Presumably, the low cost universities in some other countries deliver education in an even more economy-class manner than US universities.

“Much2learn are you arguing that the expensive private school gives a better life outcome than a flagship state university?”

No. I was trying to revert to the OP’s literal question about “is it worth $70k per year.” In this post, I was not trying to address the option of finding a cheaper alternative because that was not part of the OPs question.

“In many states, that may not be the case. Many very smart, capable kids end up at the honors college at Big State U for financial reasons but do very well.”

Yes. I think State Flagships are great, and often better than a private U for many students. However, it does depend on which State and which student.

“Are you also saying that a kid that wants to be an English or sociology major should not waste their $280K? Not sure the major (except that engineers should go to a school with engineering) should matter.”

Students need to understand that major choice has a huge impact on future earnings. Usually more than school choice. However, if the family is wealthy, then the major matters less.

https://www.economist.com/news/united-states/21646220-it-depends-what-you-study-not-where

https://fivethirtyeight.com/features/the-economic-guide-to-picking-a-college-major/

I would be thrilled to have a kid who wants to be an English major if they are really into it and have some ability. You can also tell the difference between a young student with potential and one that is more average.

Also, I think the student needs a plan. For example, a sociology major usually needs a graduate degree. I would want the student to have thought that through and have a plan.

@collegedad13, did you read my post #99?

Money could be spent a lot of ways (WashU’s campus looks and feels like a country club, for instance), but most driven students don’t actually need a country club to do well. Now granted, some families are willing to splurge for a country club experience, but I consider that a luxury good.

When it comes to percentage ROI (which I consider the right measure because you could do something with the money saved, like invest in the markets, to generate more returns), the very tippy-top privates are represented, but so are the good publics at in-state rates (and in lucrative majors):
https://www.theatlantic.com/business/archive/2014/03/which-college-and-which-major-will-make-you-richest/359628/

Though note that UT-Dallas and NMTech actually beat Stanford, which is impressive considering that UT-Dallas and NMTech have generally less impressive talent coming in than Stanford.

It means Harvard spends a lot more than Cal per student.

Take a look at some of the spending-related metrics, for example, that are baked into the USNWR ranking system.

Harvard financial resources rank is 8; Cal 37.

H faculty resources is 4; Cal 44.

H s/f ratio is 7/1. Cal 18/1.

Cal folks would say those rankings are rigged against the high end publics like Berkeley. Because the more you spend, the higher your ranking. Cal would say it is more efficient than Harvard.

USNWR and Harvard would say that the more you spend on students and faculty, and the more faculty you have, the better the product/student experience is.

Many of the fancy privates claim per student expenditures much higher than their sticker price. The highest per student spends are probably at the elite LACs. Those very small classes are expensive .