The Prestige Factor

@Schadret: “So generally - is a biology degree from Princeton/Penn/Harvard worth 80k more than a biology degree from Stockton/Rowan/Rutgers/Drexel when Med or Grad school is going to be required anyway?”

I would say “yes” because plans may change and the Ivies will open more doors and be a different experience. When the difference gets close to $200K, it becomes harder to justify. $200K grown over 50 years at a reasonable real rate of return (say 4%) will grow to be nearly enough to fund a (frugal) retirement just by itself.

BTW, the difference for you is more like $40K-$70K.

@Schadret Where is that $$ going to come from bc it is a matter of perspective just how much $$ that is and just how much of an impact it will have on a family’s financial security. It also depends on the student and their ultimate goals. When I read CC, I always have to keep in mind that the majority of posters on CC live a completely different lifestyle with very different life goals than our family’s.

It makes a difference for our family and our kids’ options bc for us, it isn’t just that amt for 1 child. It is that amt times all of our kids. If you have a solid income and 1 or 2 kids, that amt may be doable, but maybe you have several younger kids or your financial situation may already stretched to the max and that amt is a tipping pt toward financial instability.

Fwiw, our older kids have all followed merit $$ to state flagships or state tech schools. It has not impacted their careers negatively. They have great jobs in their fields. Our current college sr is in the waiting stage for grad school admissions, so we’ll see if his flagship vs elite UG impacted him negatively.

For our college freshman who is majoring in international business, she has no desire to go into banking or live in NYC pursuing a high-powered career. Her personal goals are very different. So the perspectives of not being employable without an elite degree has to be filtered by “employed by whom where doing what”?

(Fwiw, I am the youngest of a large family. None of my siblings attended “elite schools.” We all attended our state’s flagships or lower ranked schools. As adults, our careers/lifestyles are far more reflective of personal goals/personalities/life choices than anything else. I would never opt for my wealthy brother’s life over mine. His lifestyle is not how I want to live *at all. *Equally, my staying-at-home mom of a very large family is not for others. My adult children’s lives equally reflect that sort of outcome. IOW, what is the view from your child’s life goal prism?)

USML covers, on average, 63% of need. Wash U. covers 100% of need. Unless a student is full pay they’re likely to pay less at WashU.

Full pay vs meeting full need at schools with total costs between $25,000 and $72,000 means that there must be a lot of students landing somewhere in between and not necessarily just the 2 extremes.

https://www.umsl.edu/services/finaid/finaidbasics/coa.html
https://sfs.wustl.edu/newlyadmitted/Pages/Tuition-Costs-and-Billing-Information.aspx

^ Yes, and at WashU, 42% of the student body gets fin aid according to US News (https://www.usnews.com/best-colleges/washington-university-st-louis-2520/paying) so the majority could take a cheaper route.

BTW, I don’t believe WashU is need-blind yet, even if they do meet full need. They certainly weren’t need-blind in the past.

Personally I think going into debt to pay for a school one cannot afford is a recipe for disaster. That said, I would like to pipe in a couple of thought about an Ivy league education. Bias: Many Ivy leaguers hire other Ivy leaguers. Yes, this is true. It is also true that most CEO’s etc went to “fancy” schools. Though it is changing, the statistics bear out a very strong connection. Though it may depend on what area of the country you live in and what industry you are in if you look around in many industries most fellow workers have a similar background. Lots of folks have said, a doctor is a doctor. Yes, that is true. But go to the best hospitals in the nation and check the backgrounds of the best doctors. You will find many attended the same schools. With the internet, people more easily check backgrounds. So if you are in business for yourself and you hold an Ivy degree it will pay for itself over and over. And you will likely make more money in a corporate setting ( start at a higher salary and be able to jump into other positions more easily). Try to raise venture capital without an Ivy degree (good luck). So while, we can infer the degrees are the same and many (like myself) would not hold the school someone attended to be the sole measure of intellect, it is a factor. I think it is sad that people weigh where you went to college so heavily. It’s silly really. Especially the folks talking about school 30 years after graduation. But they use it as a lever to get into places (social and work) and to keep others out ( whether intentionally or not).
I would tell my own kids: All things being equal go the Ivy route. If there are financial differences then work them into an equation of your own making. ( I am also not the type to tell them to follow their heart and not consider their wallet at all). I think there is a balance. For the most part, Ivy schools give great financial packages. So this is not the real consideration. But for someone who has to chose do not convince yourself there is no value in the name. There is.

@Happytimes2001:
“But go to the best hospitals in the nation and check the backgrounds of the best doctors. You will find many attended the same schools”

I’ve done that. They’re from all over. Residency matters most and med school matters second. Elite undergrads are also overrepresented but they also get a disproportionate amount of the brightest and most driven kids.

It isn’t true that most CEOs went to “fancy” schools, based on the Fortune 500 and a CC definition of fancy school. It is true that even with problems with the data, the evidence is pretty strong that older adults who went to elite schools make more money over their career. The data can’t say though whether it is the school or the person. Probably most importantly those are all averages over lots of people, and individuals experience only their own lives, and have to make their own decisions.

@Happytimes2001:

A while ago, I played around with a dataset that listed where startup founders (in that dataset) went to school:
http://talk.qa.collegeconfidential.com/college-search-selection/1670732-interesting-data-of-where-startup-founders-went-for-undergrad-p1.html

By sheers numbers, Cal is up there with HSM while UIUC, UMich (and USC) would be in the middle of the Ivies.
Granted, those are all larger schools, but nobody is saying that those schools have Ivy-quality student bodies on average. It does show that the top tier at those schools do as well as Ivies, however.

If you look at CS majors only, UIUC and Cal only trail Stanford and MIT.

Heavyweight VC Marc Andreesen went to UIUC, BTW.

And while Perkins went to MIT, Kleiner went to what is now NYU Poly and Byers went to GTech.
Caufield graduated from the USMA.

I am not a “prestige” type of person. That said, if you can really go to an Ivy for $25k, I would take it over the state schools (but I have 529s and 2 incomes and $25k/year is in our do-able range). What I don’t think is worth it is what my friend did - turned down a full ride at the Rutgers Honors college to go full pay at U Penn. They had no savings for college, but a paid off house that they will be refinancing to pay for school. In my mind, in my 50’s, I don’t think I would have done that. Rutgers is no Ivy, but has a great rep in the sciences and for free, I don’t know that I’d be mortgaging my house again for prestige.

That first part of that quote is accurate. The 2nd part is not. Just like the scenarios in posts 97 & 103, even great aid can be thousands of $$ apart in cost. That also does not factor in merit aid that kids competitive for Ivy admissions are eligible for at lower ranked schools.

So for those families who cannot afford their expected familial contribution (and there are a lot of them), it is a very real consideration. Just for 2 of our 8 kids, these are the very real scenarios we have faced in choices in the past 4 yrs:
for our college sr–competitive schools for 23k-35k/yr or lower ranked school chose to attend for $0/yr
For our college fr-- competitive schools for $20k-35k or lower ranked school chose to attend for ~$6000/yr (quite a bit less after freshman yr due to on-campus living/food plan requirements for freshman.)

Those are very, very real considerations for our family and other families who see $80k+/child as a significant amt of $$. It may not be a serious consideration for some families, but that does not make the statement a universal truth for all families.

The counter-argument to the name of the undergrad school being important to doctors are the many very successful, high powered foreign doctors who attended undergrad schools in their countries most of us never heard of. I think we are all much more concerned about where they went to med school and their residency vs. where they got their BS from (I know I am). I agree with the name (brand recognition) having some level of value - we can always debate the level of influence, the merits and the causes. However, I am beginning to believe debt (never good) is better left for the Ivy med school then for the Ivy BS/BA. As @TimeUpJunior said, the real fun will come if my son is accepted at a private, top 30 school with an excellent aid package that makes the difference between it and the flagship much, much less.

^^^^ Excellent post. For those of you who don’t think there’s advantages (value, better, however you want to frame it) in attending the Ivies or Elites, what is the advantage of not attending. Why would it be better to go to State U Honors than Harvard. The only rational answer I can think of is cost. So that leads to four scenarios.

  1. Low income: Harvard will likely cost you less then in state all in costs. Way less than OOS.
  2. High income: Who cares? If you can afford it, you can afford it. You choose to spend it on an incredible opportunity for your kid vs. something else. You still have a nice retirement, no debt, etc.
  3. Middle income: Harvard (all the Iivies and most elites) will meet 100% of need, typically above the FAFSA EFC leaving a "spread" between them and lower cost in state. Depending on your state, it may be nominal. PA in state will cost you 30k all in. CA similar. My state, FL, is ridiculously inexpensive (tuition is 7k and any kid thinking elite will qualify for full tuition scholarship). Is is worth the spread? I think so but that's a personal decision based on values, how I value education, etc.
  4. Doughnut hole - high enough income to not qualify for aid but unable to pay without incurring debt. This is a tough one. How important is it to you for your kid to have that opportunity? Why is it that important? What happens if you don't provide that? For me, I'd likely not incur the debt, just like I wouldn't buy a house I couldn't afford (including a mortgage payment I couldn't afford) . Just because you want it doesn't mean you can have it.

However, if you can have it (without the debt) then I consider it a good decision. From an education /opportunity / experience situation, it certainly is lesser quality than State U.