Is a top dream school really better than a free ride at a state school?

Parents Forum
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<p>There was a guy in another thread who noted that anyone who gets into a top school or ivy would be crazy not to go there. This seems to be the hype found here on CC. I made a post in answer to this that I thought all parents would find interesting.</p>

<p>Newjack88 notes,"All of you adults are incredibly disappointing. Many of you are not thinking through things. You all are ignoring the opportunity aspect of a college education. You seem to be thinking that education is just about reading books and taking tests and fail to realize that there is a difference between studying business at a state university versus studying business at NYU Stern. Grow up people. (I can't believe I am telling supposed adults to grow up.)"</p>

<hr>

<p>Response: haha Yes, I must be one of those immature adults who thinks that a good state school provides a great education at $200,000 less! Stupid me!</p>

<p>Yes, Newjack88, I do believe that attending a top notch ivy school generally can give more connections than that of most state universities. There are a number of reasons. First, they are a lot more expensive; thus, you get to meet the sons and daughters of the rich and famous. Secondly, more employers recruit there; thus, there are more opportunities. Thus, on the surface, one would think that everyone should go to a top ivy or top university over a state school as you have argued.</p>

<p>However, with that said, the increase in opportunities is VERY nebulous at best. Studies ( check out study by Princeton professors) have shown that the lifetime earnings of ivy league graduates do NOT exceed that of graduates from state schools.</p>

<p>Secondly, check out where the CEOs of the top 500 companies went to school. You will find that over 95% did NOT go to a top IVY or TOP university. Most, in fact, attended a state school.</p>

<p>Thirdly, Please do a search for a thread that I started that dealt with incurring substantial debt for your dream school. see Should you incur substantial debt for dream school or even pay the "dream" tuition at: </p>

<p><a href="http://talk.collegeconfidential.com/parents-forum/476132-should-you-incur-substantial-debt-dream-school-even-pay-dream-tuition.html?highlight=substantial+debt+dream+school%5B/url%5D"&gt;http://talk.collegeconfidential.com/parents-forum/476132-should-you-incur-substantial-debt-dream-school-even-pay-dream-tuition.html?highlight=substantial+debt+dream+school&lt;/a&gt;&lt;/p>

<p>There were numerous posters who really regretted with hindsight attending their dream, top school and incurring a lot of debt over getting a free ride from their local state university. There were folks who were still paying off college loans till they were 40! There were also numerous television programs where they interviewed folks who incurred a lot of debt for their dream school and these same folks (for the most part)REALLY regretted it!</p>

<p>Moreover, in that thread , I did an analysis of what an extra $200,000 would be worth at retirement if you could keep the money in your family. Over 40 years i was worth almost $3,500,000! Since the average earnings of college grads today is less than $75,000 per year, it isn't financially justifiable (statistically) to spend this kind of money on a top IVY vs. getting a free ride. Please check out the thread.</p>

<p>Also, and very importantly, studies have shown that less than 54% of all folks who reach age 55 have less than $10,000 of net worth, not counting their home. Parents' income and assets have to be taken into account in deciding whether or not they can afford to send their little kiddie to an expensive school. This could dramatically impact their retirement and could dramatically impact the choices for younger siblings! Don't forget this!</p>

<p>Finally, I am a tax lawyer. I meet a lot of successful people. Lets face it, the homeless don't come to me. I can honestly say that the VAST majority of successful folks that I have met in my life ( and I have met many) did NOT attend an ivy school, top notch LAC, or top notch scientific institution. In fact, the undergraduate school that they attended was irrelevant. </p>

<p>What was it that made them successful? Some had top notch grades at their undergrad school, which either opened more doors than usual or got them into a top notch grad/professional school. I have found that good grades matter a lot more than the cache of the undergraduate school.</p>

<p>Secondly, they usually had good people skills. I can't emphasize this enough. This is NOT tested when kids apply to colleges. In fact, a number of ivy grads don't have these skills( from my observation), and this handicaps them enormously.</p>

<p>Thirdly, wealthy people tend to be creative. They had either a creative idea and ran with it, or set up a business, or wrote something interesting etc. This is NOT tested when kids apply to college</p>

<p>Fourth: Wealthy people had a strong work ethic! Sadly, good grades in high school don't always show good work ethic. Many kids do well without working that hard. </p>

<p>Fifth: Wealthy folks usually have very good time management skills. Haven't you met really smart kids that "blew it" in college? They get distracted by all the events and drama going on. This is not true of successful folks who usually have their eye on the ball. Again, this isn't tested in high school.</p>

<p>AS you can see, there are a lot of factors that determine success other than what is tested in high school or by SATs,which is why most ivy grads aren't any better off financially their their state school counterparts. In fact, with the money savings, I would bet that the state school families and kids might even be better off in the long run!</p>

<p>Sixth: Wealthy people tend to take tax planning very seriously. They don't look at their accountant as a chore. Check out the book , "The Millionaire Next Door by Denko or go to Money Mastery - Home and get their book ,"Money." </p>

<p>Seventh: Most wealthy people were savers. They saved at least 10% of what they made and NEVER invaded their retirement savings for anything including education expenses. </p>

<p>Moreover, wealthy people tend to diversify their investments. They didn't take tips from their neighbor or buy into one company, as with the poor Enron folks. They usually bought mutual funds, REITs, owned real estate and other investments.</p>

<p>Finally, and contra to what has been stated here, wealthy folks used leverage in their lives. Most folks think that hard work is the way to wealth. Maybe. Donald Trump became wealthy because of leverage. He had banks and investors provide him money for his real estate deals. Leverage can also be used for labor. Sam Walton had thousands of people working for him. Getty once said, " I would prefer to have 1% of a thousand people's efforts than 100% of my own." Leverage is the real key to wealth,which isn't taught in any school that I am aware of!</p>

<p>As you can see , the criteria that IVY and top schools use to attract and select their students have little to do with what makes people successful.</p>

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<p>The better question should be is the public school more affordable than the private school for comparative high achieving students?</p>

<p>
[quote]
Wealthy people tend to take tax planning very seriously. They don't look at their accountant as a chore. Check out the book , "The Millionaire Next Door by Denko or go to Money Mastery - Home and get their book ,"Money."

[/quote]
</p>

<p>I mean, duh? Those that aren't independently wealthy aren't looking to shelter assets. They're looking to pay bills, put food on the table, cover the cost of health care, put gas in the freakin tank. What's the use of having a gazillion bucks saved up because you lived like a miser, then when you hit the golden years, the freakin' warranty is starting to wear out. Yeah, you got mucho bucks, but you need a hip/knee replaced, you're impotent, need hormone replacement therapy, hypertensive, forgetful and going blind. You can afford the fancy big car, but now you're so old, you're a hazard/nuisance to the younger drivers. Your prime years were spent in denial and now that the kiddies are all grown up, you can confortably afford nicer cans of ensure!
There is nothing wrong with financial planning. The key is to have enough to invest while maitaining a decent standard of living for yourself and your family. The more you have in income, the easier it will be. For the avg household with a median income of about $46,000, give or take a few bucks, they don't have to be homeless to not consider knoocking at your door for tax sheltering advice!</p>

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<p>Just posted on another thread about situation in our family. </p>

<p>D1 - opted not to go to her dream school because even with FA and scholarships she would have had significant debt when she graduated. She chose top state unversity, has completed grad school, is working in a job she loves, and has traveled all over the world. She would have been far more restricted in her choices if she had been saddled with debt. </p>

<p>D2 was accepted at dream school and received a lot more scholarships &FA - making school cheaper for her than for her sister. She too is loving her college experience. If she continues to work and save while she is in school, she is on the road to graduating without debt. </p>

<p>Looking at both girls, I know that they will both be successful in life. But then again - my definition of success might be different than other people's.
If they are both happy with what they are doing, deeply love the people in their lives, and contribute in a meaningful way to society - then I will consider them successful. And I don't think where they went to school will really matter.</p>

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<p>Well, since I posted these as a response to your post in another thread, I guess I'll post them here as well.</p>

<ol>
<li> You claim that 95% of CEOs at top 500 companies did not go to an Ivy or top school. However, at least in 1990, this was not the case.</li>
</ol>

<p>from <em>Fortune</em> Magazine.</p>

<p>IF YOU WANT to become chief executive of a FORTUNE 500 company, where should you go to college? Judging by past performance, you'd better practice singing ''Boola Boola'' and tune up your Whiffenpoofs repertoire. Yale tops all schools in its share of alumni CEOs, with Princeton a strong second, followed by the 64 other colleges in the table at right. The big names near the top of the list are those you might expect. But when the schools' ability to graduate future CEOs is adjusted for class size (see the Power Factor column), a few lesser-known institutions outshine the giants. Relatively speaking, tiny Washington & Lee of Lexington, Virginia, has launched more alumni toward the corner office than mighty Harvard. Earlier this year we asked 1,891 present and former CEOs of FORTUNE 500 and Service 500 companies to tell us where they went to school and what they studied. (At 109 companies the original CEO was still in charge.) We also asked where they went for their graduate degrees. Nearly 1,500 top executives replied. The Ivy League racked up the most impressive numbers. A total of 156 CEOs graduated from these eight universities, which are considered some of the most prestigious in the nation. Among the 43 current CEOs who helped Yale earn the valedictory spot: Roberto Goizueta of Coca-Cola, Samuel Heyman of GAF, and John Akers of IBM. Princeton boasts 32 CEO alumni; Norman R. Augustine of Martin Marietta went there. Harvard is alma mater for 25, including Scott McNealy of Sun Microsystems and Colman Mockler Jr. of Gillette. The other schools of the Ivy League each turned out more than ten of today's CEOs, with the exception of the University of Pennsylvania (eight) and Brown (four). The dominance of the Ivy League is, if anything, increasing: Whereas 14% of the former CEOs surveyed hold Ivy League degrees, nearly 19% of the current CEOs do. The Big Ten schools of the Midwest also stand out. They graduated 88 current corner-office occupants. Northwestern leads the group with 19, followed by the University of Michigan with 13 and the University of Illinois with 11. </p>

<p>EDIT: I did find this for more recent information:</p>

<p>USATODAY.com</a> - Wanted: CEO, no Ivy required</p>

<p>"A study by executive search firm Spencer Stuart found that the percentage of CEOs at Fortune 500 companies who were educated at Ivy League schools declined from 16% in 1998 to 11% in 2004. Even the Harvard MBA shows signs of erosion. Among large-company CEOs who have MBAs, 28% received their degrees at Harvard, according to the 1998 study. By 2004, that had slipped to 23%."</p>

<ol>
<li> You claim that "Studies ( check out study by Princeton professors) have shown that the lifetime earnings of ivy league graduates do NOT exceed that of graduates from state schools."</li>
</ol>

<p>While true, there is an important exception: poor students</p>

<p>from the NYTimes</p>

<p>Recent research also suggests that lower-income students benefit more from an elite education than other students do. Two economists, Alan B. Krueger and Stacy Berg Dale, studied the earnings of college graduates and found that for most, the selectivity of their alma maters had little effect on their incomes once other factors, like SAT scores, were taken into account. To use a hypothetical example, a graduate of North Carolina State who scored a 1200 on the SAT makes as much, on average, as a Duke graduate with a 1200. But there was an exception: poor students. Even controlling for test scores, they made more money if they went to elite colleges. They evidently gained something like closer contact with professors, exposure to new kinds of jobs or connections that they couldn’t get elsewhere.</p>

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<p>Would you rather have a free Toyota Camry or pay full price for a Lexus? That's basically the question here. The bottom line is that the Lexus is a nicer car, but many, many people would take the free Camry. If you have enough money to buy the Lexus, you may not care about getting a free Camry.</p>

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<p>Skylvr, my post focused on the UNDERGRADUATE education that the CEOs had. Also, I do know that there are a number of ivy undergrads who are CEOs,but the vast majority didn't come from the ivys , as undergrads or even other top schools but rather lower tiered institutions and state schools. </p>

<p>Frankly, I think this is a function of numbers. Many more graduates come from the lower tiered institutions ( from Ivys and IVY caliber schools) and state schools.</p>

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<p>hi, taxguy, you should run for a political position sometime.</p>

<p>First of all, the # of students who could get a full ride (merit aid) is very small. I don't have hard data but I would guess that is less than 0.5%. I would also think the # of students who got into 200,000 debt for college is equally small. Those who got in the expensive schools either have means to pay for it or have the opportunity of significant amount of financial aid. </p>

<p>Secondly, since there are only 1% or so HS graduates attends one of the top 10 private schools, you will have much less chance to meet them in your daily life. If you have 2 out of 100 clients who graduate from an Ivy or similar school, you have met more than average.</p>

<p>In other words, you can't really go by the absolute # of this or that w/o considering the base. </p>

<p>The pure power of resources at the top private Universities gives the attending student a rather different style of college experiences.</p>

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<p>taxguy,</p>

<p>But the USA Today article does give information about undergraduate education and supports the trend suggested, which is a good sign.</p>

<p>"In 1980, 14% of CEOs at Fortune 100 companies received their undergraduate degrees from an Ivy League school. By 2001, 10% of CEOs received undergraduate degrees at one of the eight Ivies: Brown, Columbia, Cornell, Dartmouth, Harvard, Princeton, University of Pennsylvania and Yale. The percentage of CEOs with undergraduate degrees from public colleges and universities shot up from 32% in 1980 to 48% in 2001."</p>

<p>But you are correct about numbers. I doubt that the 8 Ivy League schools account for 10% of all college graduates, yet they account for 10% of top CEOs.</p>

<p>Note that this does not include other top schools, such as Stanford etc., or elite liberal arts colleges, such as Williams, Amherst etc.</p>

<p>It is hard to know, though, if those disproportionate numbers at Ivy League schools is the result of something that those schools provide, or does it tell more about the type of person who can actually get in and afford the school.</p>

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<p>Many of the very top graduates of Ivy League schools don't want to be CEOs. In fact, many of them take relatively low-paying positions in academia.</p>

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<p>
[quote]
Is a top dream school really better than a free ride at a state school?

[/quote]
In a word, no.</p>

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<p>Son finishing up 2nd yr on free ride at top 50 State U Honors. Turned down cornell full pay, duke and swarthmore w/1/2 tuition merit on down the USNEWS line. This was actually his safety. I only share that to show he is top school material.</p>

<p>He is very,very happy. He felt he has had some excellent prof's, has had TA's only for labs, has had many small honors courses.He is at the top end of the curve grade wise but certainly not setting the curve as there are many other students of his caliber. He has had a great cutting edge research position since he was a freshman and worked in a paid RUE last summer and this summer has decided on an internship with a world wide high profile company. He is also having the time of his life.</p>

<p>The school through their generosity has assured themselves of a lifetime of giving from this independent soon to be alumni who has a lifetime of great works awaiting him.</p>

<p>Students from this school have gone on to Harvard law and med and every other school on down the list. Maybe not in great numbers but it certainly is possible for those who would like that opportunity.</p>

<p>crosspost: as for those that make it big from the Ivy's I really wonder to what extent their families connections and wealth helped this individual get to his or her position regardless of school attended.</p>

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<p>Another factor to consider when looking at those 'CEO stats' is that most of those people went to school at least 2-3 decades ago. The trend is certainly moving towards top students attending a much more diverse range of schools (rather than just a handful of schools as it largely was several decades ago). 20-30 years from now (when today's college graduates will be tomorrow's CEOs) it's almost certain that the 'CEO stats' will continue to be much more diverse than they are today. Similar observations of increasing school diversity amongst the 'best of the best' can be made by looking at those selected for top prestigious scholarships (Marshall, Rhodes, etc.) </p>

<p>As I always tell people, an amazing individual is going to be an amazing individual no matter where they go to school. The qualities required to reach a high level of 'achievement' (define that as you wish) are the sorts of things that can't be taught in a classroom. </p>

<p>So in short, one has to set their own priorities for what they want in a school. Personally, I'd say that in most cases the 'top dream school' isn't better than the 'free ride.' Like it or not money is important. </p>

<p>Think about the extra money required to go to the 'dream school' and then make a list of other things that could be done with that amount of money, or even less, (a nice down payment on a house for a new college grad, a jumpstart on retirement savings...) then decide which you'd rather have in the longer run.</p>

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<p>Dad II notes,"hi, taxguy, you should run for a political position sometime."</p>

<p>Response: No thank you. AS you can see on these boards, it is impossible to please everyone. In fact, I don't even think it's possible to please most folks. I would go crazy trying.</p>

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<p>In our case, the COA to an elite school for DD would be about 5K more a year than attending State U. This takes the full tuition award from State U into consideration. I think our situation is shared by many excellent students from low income families. </p>

<p>The OP's point is that one could save big $$ if they forgo a dream college experience. Then I ask, what are you going to do with that $$? You got to spend it on something - a bigger house for example. Is a bigger house better than a small house? Why isn't a dream school experience worth something? </p>

<p>For any student who got into one of those 50K a year school, he/she typically has invested a lot of their life to make that happen. For 5 to 10K more a year more than State U, I just don't see what is the big deal.</p>

<p>PS, I am a true believer that one's success is mostly determined by one's ability and drive. However, a great school with resources should help.</p>

<p>Chairman Mao said something like this : The internal factor is the deciding factor. The external factor could only have an effect if and only if the internal factor is there.</p>

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<p>Some of us simply have different values. I think it's worth it for some kids--and the reasons have nothing whatsoever to do with future earnings. Tax guy looks at a college degree as vocational training. Therefore, to him it makes sense to analyze the problem strictly from a dollar and cents point of view. Analyzed that way, it is foolish to go to dream school. </p>

<p>Some of us don't see college as vocational training. Some of us actually value ideas. We don't freak if our kids want to study philisophy, art history, English, history, ancient civilizations, or other subjects that aren't vocational in nature. We think it's great that our kids have a chance to spend 4 years in an environment in which, even if not everyone feels the same way, many do. We like the idea that our kids study economics rather than accounting and art history rather than marketing and English rather than public relations.</p>

<p>We won't view the $ we spent for college as a "waste" if our son or daughter decides to become a high school teacher or social worker. It will never cross our minds to say "If I'd known you were going to do THAT, I would have insisted on state U."</p>

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<p>There is already a 119 page discussion on this <a href="http://talk.collegeconfidential.com/parents-forum/313156-your-kid-takes-top-scholarship-instead-top-school-what-s-next.html%5B/url%5D"&gt;http://talk.collegeconfidential.com/parents-forum/313156-your-kid-takes-top-scholarship-instead-top-school-what-s-next.html&lt;/a&gt;&lt;/p>

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<p>Our (current?) family philosophy is more along the lines of rocketman08. Money is fungible. As Homer Simpson's brain says, it can be used to buy goods and services :) So, it can pay for full-tuition expensive school, or it could be used to pay for part-ride less-expensive school plus grad school, or help with a down payment on a first house, or support during a nonpaying internship year, or study abroad, or etc etc etc. </p>

<p>Yeah, it could also be used for granite countertops in the kitchen, but I swear I'm really not thinking about that. Really!</p>

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<p>
[quote]
First of all, the # of students who could get a full ride (merit aid) is very small

[/quote]
</p>

<p>no so - most kids who are strong enough to get admitted to an Ivy would get a full ride elsewhere. If they didn't it's because they didn't look hard enough.</p>

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<p>Jonri, your kids are so lucky to have parents like you. Not everything should be analyzed by dollar and cents.</p>

<p>Even if we would do analyze this by dollar and cents, I would think OP picked the extreme cases. </p>

<p>From what I have heard, all the PHY, SMC etc are all offering excellent FA packges for low income families like us.</p>

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<p>Not to be too snarky, DadII, but you keep referring to yourself as "low-income." Didn't you once say you made over $100,000 a year? I don't consider that low-income, and in some places that's even high-income!</p>