Is it worth it to pay for an elite college when offered Merit $$$ elsewhere?

<p>This new article in the NYT's suggests the answer is no.
Parents trying to decide how much to pay for their child's education should read carefully .
"Measuring College Prestige vs. Cost of Enrollment "
<a href="http://www.nytimes.com/2013/04/20/your-money/measuring-college-prestige-vs-price.html?pagewanted=2&hp%5B/url%5D"&gt;http://www.nytimes.com/2013/04/20/your-money/measuring-college-prestige-vs-price.html?pagewanted=2&hp&lt;/a&gt;&lt;/p>

<p>For our family, paying to go to an IVY when our son was offered a full tuition scholarship elsewhere , and knew that grad school was his goal, would have been the wrong decision.
We were correct in our thinking, and DS is now in the top grad school for his field in the country.
This sentence summarizes the "big picture" that many parents of smart kids juggling admissions decisions dont realize-
“If you have a smart student who can get into some of these expensive schools, they’ll do well in other places” .</p>

<p>The key point is

If you want to pay, pay to go to a really really elite school.</p>

<p>My daughter will be going for the merit, not the Ivy. I can’t pay for an Ivy League education so she will not be applying. It will be an in-state school, or an OOS that gives merit. I told her that we will discuss this further when she applies to grad school.</p>

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<p>Even then, paying a lot more for a really really elite school may only be an investment if the goal is some type of elite employment like Wall Street or management consulting.</p>

<p>That’s a good point, ucbalumnus. I know some really great, really smart kids (humanities and psych majors, mostly) who’ve graduated from elite schools who are working in coffee shops and grocery stores. Which is not to say there’s anything wrong with that as a first job out of college or to say anything about where their paths will take them in the future… but not a good option for kids or families who take on a lot debt for a special school.</p>

<p>I’ve mentioned elsewhere on CC advice I received from an elite (top 3) boarding school admissions director. He said the name of the game is getting admitted to a school where the kid will thrive/shine and the school picks up the tab. Prestige only matters for your graduate degree.</p>

<p>Also, it is far better to be at the top of the game at a lesser university vs mddle or bottom of the pack at a top school. </p>

<p>Take a look at where the Harvard MBAs earned their bachelors. </p>

<p>The best ROI is for graduate school. Too much growing up going on in undergraduate.</p>

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<p>We are typical combined income middle class. Son got a full tuition scholarship to the flagship state school. Harvard, with their need based aid, cost the same as going to the flagship on a full tuition scholarship.</p>

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<p>Prestige of your college mainly matters mainly for the last degree earned. So if your last degree earned is a bachelor’s degree, that is the degree whose college prestige matters. Of course, whether the college prestige matters at all, or how much it matters, depends on a lot of other things (what type of job you are seeking, etc.).</p>

<p>Also, for graduate and professional degrees, the prestige that matters tends to be more major/program-specific.</p>

<p>MPM - who are we kidding. USC is plenty elite. :D</p>

<p>OperaDad you are not the first person to say this. My fear is that we are on the upper cusp of getting FA from an Ivy ( I think). What happens if we get a raise or bonus? Will we lose the FA? I am scared to depend on getting FA and then have it removed. We have enough money in the 529 to pay in-state without any issues. She can go OOS with merit. If she gets into a school like Princeton with FA and then our income goes up, what will happen?</p>

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If she gets into Princeton, that would a very good question to ask the FAO.</p>

<p>The FA is incremental and is not a threshold value. So if someone is getting full FA at 80k income, they will be forced to pay a share of their income as it keeps going up.</p>

<p>You can play with the net price calculators.</p>

<p>I am not sure she will want to apply to the Ivys- may be too intense for her. I am curious about my question though…</p>

<p>You’d would have to apply each year for FA using the previous year’s tax returns. So yes, if your income rises, your FA would decrease accordingly, all other things staying constant. Just know that Yale, Princeton, and Harvard/Columbia (in cost order from least to greatest) were very generous in our case.</p>

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[Top</a> Feeder Colleges to Harvard B-School | Poets and Quants](<a href=“http://poetsandquants.com/2011/08/15/top-feeder-colleges-to-harvard-business-school/]Top”>http://poetsandquants.com/2011/08/15/top-feeder-colleges-to-harvard-business-school/)

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<p>How many colleges are out there? How big are those 8 Ivy schools?</p>

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<p>If your income goes up a little, FA will be reduced a little–but almost certainly by less than the additional increment of income. If your income goes up a lot, need-based FA could be eliminated entirely. But I’m not sure that’s something to fear. It’s almost impossible to imagine any scenario in which they’d cut FA by an amount greater than your incremental increase in income; so any increase in income should still leave you better off financially. (Many people fail to realize that the tax code works like this, too; additional income might kick you into a higher tax bracket, but you’re only paying the higher marginal rate on income above the threshold for that bracket, and the marginal rate is always less than 100%, so you’re always better off making more money, even if it means you pay more taxes).</p>

<p>Now it might be that you just don’t want to pay the amount the meets-full-need private colleges say is your EFC. That’s fine. It’s perfectly reasonable at that point to say, “I’m only willing to pay full COA at our state flagship.” The irony, not widely appreciated, is that public universities are often a better deal financially for people who are full-pay at the state flagship, but whose EFC would be above that figure at a meets-full-need, need-based only (no merit) private. But it’s also often the people in that bracket who are among the most prestige-conscious, so a lot of them end up looking at top private colleges anyway. (As an aside, I think this makes some of them especially vociferous in trashing public higher education, because they need to rationalize their own choice to fork over additional thousands or tens of thousands of dollars for something else). But I don’t think anyone can reasonably fault you if you just say your public flagship is fine and that’s as much as you’re willing to pay, but if your D gets merit aid elsewhere that matches or betters that price, that’s fine, too. Especially if your D is on board with that strategy.</p>

<p>Let me summarize this article: Send your kid to the school you can afford. S/He will be fine.</p>

<p>Schools don’t get kids jobs. Kids and their accomplishments get kids jobs (or to be cynical, parents and their connections get kids jobs). There are cheap large research unis and cheap LACs. Send your kid to what fits and what you can afford. Beyond that, it’s up to the kid.</p>

<p>I know several Harvard grads who retired as middle managers. Their Harvard degree did nothing for them. Kids who have the hustle to get into “elite” schools they can’t afford have the hustle to do well in life wherever they go to school.</p>

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<p>This is the formula for Harvard:</p>

<p>Below $60,000: Harvard is $3,000/yr (what they estimate the Student can earn during the summer, and during the year).</p>

<p>Between $60,000-$80,000: some nominal amount</p>

<p>Between $80,000-$150,000: Gradually increases so by the time you are at $150,000 it is 10% of your income ($15,000).</p>

<p>Above $150,000: They charge a higher percentage of your income above $150,000.</p>

<p>So, let’s say you are at $60,000 and getting a free ride. If your income increases to $80,000, I doubt it would cost more than $2,000 of the additional $20,000 you make. If you are at $80,000, and then start earning $100,000, I doubt it would cost more than another $5,000 of the additional $20,000.</p>

<p>The Harvard net price calculator makes it really easy to do “what if” scenarios.
[Net</a> Price Calculator](<a href=“http://npc.fas.harvard.edu/]Net”>http://npc.fas.harvard.edu/)</p>

<p>The Ivy percentage at Harvard Business School is actually far higher then 33% since over one third of the entering class is international students who for the most part, are not graduates of American Universities. The perecentege is probably closer to 60 or 70 % of the class. The same is true at Columbia and Wharton.</p>