^^^^
Not if you can get an engineering degree at an ABET accredited college for far less.
College is about more than coursework. It depends on your financial situation.
Good points. Anyone who gets into top schools can get engineering degree somewhere else for a fraction of the cost. For the sake of conversation let’s talk about middle class two income family that is not looking into taking any loans.The kid is obviously well above average. That will bring the value of the challenging environment.
If the expectation is for someone to stay an engineer, probably not. If there are other aspirations, then it depends on the school. Ultimately it depends on the financial situation of the family whether to spend money.
Excellent point again. I think every kid going into engineering today does not plan to work 9-5 jobs. The question is how many of them will become next Steve Jobs.
Even if your only criteria is salary, it also depends on the specific major within engineering.
For example, chemical engineering grads from accredited colleges tend to earn similar salaries. In contrast, computer science salaries vary significantly by school.
Another complexity is that graduation/completion rates for freshmen beginning engineering are much better at some schools than others. Even when the stats of their incoming students are similar. At some schools, freshmen beginning in engineering graduate with an engineering degree 60% of the time, but a school with a better process and support may get over 80% completion. If the student drops out, then you did not save money.
There is a value you can place on an engineering degree. The number I came up with is what it would cost for an ABET degree at our state flagship, Oregon State. That’s right at $100k. Beyond that, you could possibly, on a purely financial basis, justify a slight premium for the intangible opportunities afforded by a more premium name. Certainly though, not a $140,000.
I justify that by simply looking at the opportunity cost of the differential. If you were to invest the $140,000 at a modest interest rate of 5%, it would grow to roughly $1.4M by age 65. There’s no way that the average engineer from even MIT will make $1,400,000 MORE over their career versus the state flagship graduate. It’s almost $2M at 6% and almost $10M if you use the broad index returns of 9.7% between 1930 and 2013. The rare student from any school can make a bazillion dollars, but those cases are fairly rare.
So, how do I look at that differential? As a gift…if you can afford it. My son didn’t choose our state flagship, nor did he choose a $60K school. He picked the best fit which was about $50k more total, something we could afford, and I look at not as an investment, but a gift.
- You assumed the student graduates, but the average graduation rate is very low. That is like assuming the winning lotto ticket costs $1 and pays millions, so it is a good deal.
- You can't earn 5%. Have you been to the bank lately? 1% maybe.
- You still have to pay tax on that return.
- In some majors it is entirely plausible that an MIT grad will make that much more in a career.
The point is that there is not an easy to calculate answer to this that is right for everyone in any engineering field.
To add to discussion: kid is looking into CS and engineering. The drop out possibility is extremely low. It has been mutually agreed that we only pay for college if we have access to student portal with grades. And I also cannot find an investment with return of more than 1% this days.
There is a big ocean between starting engineer and Steve jobs.
Steve Jobs is a bad example (Bill Gates too) for not having gone to school long enough but take the case of Zuckerberg and Steve Ballmer. Ballmer was invited to come and manage microsoft because he was a friend from Harvard and Zuckerberg had several of his college friends as partners and hires who made millions and billions. The expectation is there are more exciting opportunities available to students coming out of top programs because they are either recruited or recommended by their peers/seniors, many of who are involved in start ups or established companies. I was shocked to hear recently that one of the kids I know going to a top school is deciding between grad school and making 200k for first year at one of the well known companies. I don’t know if similar opportunities are available to all other graduates.
I say it’s absolutely not ‘wise’. No way.
That doesn’t mean its not something you should consider, however. For instance, if that’s what you agreed to do prior to applications being sent, and you can afford it, then I would think you need to move forward.
Wise? No.
That’s just me, though, having not gone through the process yet. I reserve the right to change my mind if we find ourselves in the same position. 
@Much2learn, you can take more risk than the bank if you know you won’t touch it for 45 years. The S&P returned over 12% for the last 5 years. If the student does not graduate then you’re even worse off having spent more on tuition. There’s no doubt an MIT grad could possibly earn more, but certainly, on average, not enough more to make up for the differential of $140,000 invested properly. Given historic returns, it’s not even close actually. You put it in a very diversified, auto-adjusting allocation target index fund and it should be both safe and easily beat 5% over 45 years. If it doesn’t there will be far bigger worries like catastrophic world wide meltdown in which case, discussions of money will be fairly irrelevant. As for taxes, you pay it either way, so that point is moot. I am in no way saying don’t go to MIT or what ever other Brand X school name you want to throw in there. There are LOTS of reasons to consider those schools. What I am saying is that on a purely financial investment basis it’s really hard to justify.
For engineering, the answer is generally that financially, it’s not worth it. There are a few things you do get from going to a top school that are non financially or indirectly financially helpful though. For one, admission to a top graduate/professional program is much easier coming from an elite undergraduate institution, and it’s not explained by merit alone. Graduate program admission is dependent on a very large extent on being endorsed by faculty from elite schools, which are more plentiful at elite schools (same with law/med schools to some degree).
For initial job placement, it’s an advantage, especially for computer science for the “Big X” tech companies. You’ll be recruited more easily and may have better offers if you can set up some form of bidding war. But industry is less about pedigree than about results, and while your first job is important, it’s more than possible to make up the difference in a field that isn’t primarily about connections (business and any private-capital-driven industry like Wall Street or Silicon Valley).
So elite schools have some nice advantages, which can actually matter and make more of a difference than merit. But obviously that’s a lot of money pretty early in your career (I wouldn’t use eyemgh’s example because you don’t have the $200k, but you are instead in the hole and interest is growing). It’s pretty well studied that large debt restricts what choices you can make in life, and in a lot of cases it would force you into a “golden handcuffs” situation where your debt forces you into an otherwise undesirable job because it pays well. That’s bad financially as well as nonfinancially.
Choose your priorities.
It’s not worth it if you plan to be average. So the obvious solution to make it worth it is to not be average. Excel!
FYI, “the next Steve Jobs” (Apple CEO Tim Cook) got his engineering degree from Auburn University.
You can excel anywhere you go. Conversely, you can be middling or lower at an elite institution. How well you do at any given program is really a non-sequitur to the original question.
@Ballerina016 “To add to discussion: kid is looking into CS and engineering. The drop out possibility is extremely low. It has been mutually agreed that we only pay for college if we have access to student portal with grades.”
Everyone thinks that, but I think the graduation rate at an average 4 year college is probably about 35%. On top of that, is the kids that flunk or switch out of engineering, so that engineering fail rate is not negligible. Ask about it at the school before you enroll.
What did you tell the kid?
If you have the money, it’d incur no debt, the kid worked hard to get into the MIT-level school and would benefit from it, I don’t see why not.
It all depends on whether you find investing in the kid’s education is worthwhile or what else you’d do with it. If you promised you’d pay if he got in, it’d be disingenuous to back out now (without any new circumstances affecting the breaking of the promise).
If you didn’t promise anything: What would you do with the money and is it more important/valuable than the kid’s education?
The opportunities are different at MIT and at SJSU. Both are recruited by Silicon Valley but the class content is different (check out calc1&2 at MIT: equivalent to 3 semesters at most universities; languages at Level 3 are equivalent of post-AP elsewhere… and what they do in the classes is really cool), the labs are different, the research done is different, the support/finances/resources/funding issues are widely different (you don’t have to worry about funding cuts at MIT…), and the peers are different too in ways that are both quantifiable (stats, curriculum rigor…) and intangible. Networking opportunities and number of classes (as well as challenge) will be different. Are all those things worth a premium? If you didn’t promise anything, only you know.
You can choose to invest the money in the kid’s education, but treat it as an investment and expect a return. The returns can take different forms: progress, good grades (reasonably so - MIT-level coursework is a shock to the system for all overachievers), work study for personal expenses. At Stanford/MIT, CS interns can expect a minimum of 6K/month for summer internships (and some can command way more. No I’m not kidding, 6K really is on the low end.) For instance, you can ask that 30% summer earnings go straight to help pay tuition/R&B after freshman year, and
You can ask for a return on your investment if you choose that a certain percentage of early earnings (if high enough) after graduation go to “pay you back”, ie., some of the money’s not a gift, but a no-interest loan. You can cap that in any way you want. Or you can really see it as an investment and ask for free shares in the start up company before it goes public. Or a percentage in sales for any invention. 
FWIW, I’m the one who threw MIT out there as a reasonable representation of a “top” engineering school. I have no idea what school(s) the OP is actually considering. LOTS of private schools are $60k/yr now.