UChicago: Bad Bang for the $ ?

Colleges and Universities A-Z University of Chicago ✅
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<p>Businessinsider.com, a prominent Wall Street blog, examined the ROI (Return on Investment) over 30 years of various undergraduate degrees. They used the current cost of 4 years as the investment, and the total earnings over 30 years using data supplied by surveys done by Payscale Inc. to arrive at return. They then look at the 20 colleges where academic quality, as measured by US News rank, diverges significantly from rank in terms of return. Chicago rounds out this list, with an academic rank of 8 but an ROI rank of 35.</p>

<p>20</a> Prestigious Colleges That Offer An Ugly Return On Your Investment</p>

<p>What do you think, as good as it is, is Chicago overpriced relative to its peers? Might Chicagoans be better off in the Ivy League after all?</p>

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<p>The problem with this ranking is that the margins between some of the “worst” colleges and some of the “best” colleges is so thin. </p>

<p>According to the link you provided, a Chicago education costs about $195K, and the 30 year return on investment is about $1M.</p>

<p>Then, according to the ranking of the “Best” colleges by this metric, a Columbia education costs about $192K, and the return on investment is about $1.16M. That’s really not a drastic difference than the $1M projected 30-year ROI found at Chicago.</p>

<p>Here’s the link to Columbia’s ranking: <a href=“The 20 Schools That Offer the Best Value for Your Money”>The 20 Schools That Offer the Best Value for Your Money;

<p>Interestingly, Brown and Cornell do not make either list, so I’d imagine Chicago is somewhat on par with these two schools. </p>

<p>Moreover, the schools known for having a big, strong, and continuing connection to the finance industry (Harvard, Dartmouth, Princeton), and then the elite tech schools that continuingly feed lucrative tech and engineering industries (MIT and Cal Tech) do extremely well, and do seem to distance themselves from Chicago’s ROI. </p>

<p>So to answer your question of “is Chicago overpriced relative to its peers?”, my response would be: it depends. Chicago seems to be in good standing relative to Columbia, Brown, Cornell, and Penn (which may be buoyed a bit due to Wharton), but falls back in comparison to Harvard and Princeton. </p>

<p>In any case, would this come as a surprise to anyone - that Chicago isn’t quite on the level of a Harvard or Princeton? If you’re intent on making money and being a captain of some industry, I don’t think it makes much sense to turn down Harvard or Princeton or Wharton for the U of C.</p>

<p>To conclude, as always, when posters look to compare Chicago to “the ivies,” my response is always the same: which ivies? There is a lot of disparity within the ivy league itself. Generally, by pretty much any metric, if you compare Chicago to Columbia, Cornell, Penn, etc., Chicago is a peer on equal standing with these other schools. If, however, you compare the U of C to Yale, Princeton, etc., Chicago falls off the pace a bit.</p>

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<p>According to the University, 85% of the students in the College go on to graduate or professional school. The Payscale ROI ranking only takes into account those with undergraduate degrees. Great methodology to be throwing out the vast, vast majority of your data points :)</p>

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<p>The ranking doesn’t even make sense. It’s a ranking that uses discrepancy between US News ranking and ROI ranking as the metric, and as a ranking that is titled “20 Prestige Colleges that Offer an Ugly Return on Your Investment”, that doesn’t seem to be the metric that should be in place.</p>

<p>In terms of ‘bad bang for the $’, Chicago ranks 35th in the nation for ROI ranking. It is the 28th most expensive university. Seems about right to me, wouldn’t you say? Especially with consideration of Rny2’s point. Other rankings have ranked Chicago in the top 10 for schools in which it is easy to make money.</p>

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<p>Chicago isn’t designed to train you for a lucrative field. That doesn’t keep chicago graduates from making a lot of money, but it’s not Chicago’s guiding objective.</p>

<p>Chicago produces a lot of people going into academia. academia is not very lucrative, but it does carry with it a lot of prestige.</p>

<p>The quality of the education, however, is considered by some people to be the best in the world.</p>

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<p>Those are two very different questions. </p>

<p>The article itself demonstrates pretty convincingly that Chicago isn’t overpriced relative to its peers, given that it comes out better than several of its closest peers (Hopkins and WUStL do worse), and it can’t be much worse than two other important peers (Northwestern and Cornell don’t make the top 20 or the bottom 20), given how close it is to the bottom of the top 20 (only about a 15% difference compared to Columbia, which probably just about equals the historical New York vs. Chicago cost of living difference).</p>

<p>As to whether Chicago students would be better off at an Ivy League college? If you are going to look at historical career earnings, the answer is of course. Why is that? Because historically Chicago has had more students going into academia and government than the Ivies, and fewer running large businesses. If that’s news to you, you haven’t been paying a lot of attention.</p>

<p>Now, does it make sense to use historical average career earnings as THE measure of a college’s value? I don’t think so, do you?</p>

<p>Especially historical average career earnings the way these guys have calculated it. (HOW they calculated it, I’m not exactly sure.) What they did was to look only at the earnings of people who did not get advanced degrees. So for all of these schools, they are looking at the earnings of a fairly small, and possibly unrepresentative, portion of the student body. The portion is larger and more representative for tech/engineering schools, which is why half of the top 20 are tech/engineering schools. They make no attempt to consider whether the student who went to Harvard Law School and will make millions over 30 years might have done pretty well even without becoming a lawyer.</p>

<p>In other words, for a place like Chicago, or Dartmouth for that matter, a big part of what they are measuring is essentially how many people go to work for lucrative family businesses that pay them over-market compensation because they are family members. Big surprise! The Ivies have more of those kids than Chicago! But that doesn’t mean much if you aren’t one of those kids. (And it means even less if you are, since going to Chicago isn’t going to make Dad’s company pay you less.)</p>

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<p>Here’s the base list: [Average</a> Cost for College - Compare College Costs & ROI](<a href=“http://www.payscale.com/education/average-cost-for-college-ROI]Average”>http://www.payscale.com/education/average-cost-for-college-ROI)</p>

<p>In their methodology discussion, the researchers themselves note, “For some Liberal Arts, Ivy League, and highly selective schools, graduates with degrees higher than a bachelor’s degree can represent a significant fraction of all graduates.” Also, this was based on a survey, i.e., voluntary responses, and no guarantee of representativeness.</p>

<p>Chicago actually does better than Northwestern and Tufts, and a little worse than Cornell and Brown – Businessinsider.com just didn’t think any of them were newsworthy enough. Although there is a lot of noise, and the measurement is stupid, Chicago is actually pretty much equivalent to its actual peers (top non-HYPS private university-based liberal arts colleges), except for Penn which has both a large engineering school and a large undergraduate business school, and Dartmouth, which as many have noticed does very well in lifetime earnings surveys.</p>

<p>Also the measurement is even stupider than I thought, since in addition to excluding anyone with a graduate degree, they exclude anyone who is not a full-time employee. Consultants, entrepreneurs, successful retired people, artists and authors need not apply. (In fairness, excluding those people probably advantages Chicago relative to some of the other colleges we are talking about.) And, given the radical changes in Chicago’s undergraduate population since 1980, I’m not certain that the median earnings of single-degree, full-time employee 1980 graduates are much of an indication of what 2014 graduates can expect to earn in 2044.</p>

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<p>And that’s where the wealth is. Free Agent Nation. Not necessarily being an employee of Big Corporate Conglomerate, Inc.</p>

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<p>Not to mention being employed by Little Suburban School District, or Midwestern State Agency.</p>

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<p>for the life of me I cannot figure out the way they came up the “30 year returns” figure. What they called everyone every year to fax the salary/tax return over?</p>

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<p>That alone shows how flawed this kind of analysis is. The entering students were so different to begin with. </p>

<p>Any analysis needs to show one thing first, that is, they are comparing the same thing. Most analyses may fail that test.</p>

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<p>Totally meaningless list as most of the schools are hardly ‘prestigious’</p>

<p>The term is completely diluted by at least 1/2 the schools listed.</p>

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<p>No, what they did was to get the current year’s compensation income from graduates of each of the past 30 years (but only graduates with no additional degrees, who were somebody’s full-time employee), and then use the median of each school’s qualifying and reporting graduates from that particular class, and added up the medians of each of the 30 classes. Then, from the resulting number, they subtracted the median income of 34 classes of mere high school grads (i.e., what the median person would have earned anyway without going to college, supposedly, including what she would have earned during the four years her college friends were in college). I think they also subtracted the cost of that particular college, so that the resulting number is supposed to be the pure marginal profit earned by going to a particular college rather than heading into the workforce after high school.</p>

<p>I’m being simplistic. It’s more complicated. I still don’t buy it.</p>

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<p>^ If they didn’t hand-pick high school grads individually for each college, that would be another reason to dismiss it. I certainly don’t believe that people who have the option of going to, say, Caltech, as opposed to Bob Jones University, end up making the same amount of money if they continue without a college education.</p>

<p>From what I can see, it doesn’t seem like they took that into account either.</p>

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<p>I don’t buy it. Its hard enough to find some one 30 years after graduation, let alone to have them spill their true earnings. So, lets say for the 1000 graduates from Caltech in class 1980, they found 100 and only 10 did not go to graduate school and 5 of those told the interviewer some kind of “salary” figure, but fail to report thier 1 million dollar capital gain or loss (on paper or realized). How could that be accuate representatin of Caltech class of 1980? How can we believe the figure being so close to each listed schools? In the Caltech example above, what about those 900 they did not find or unable to interview? This report is a total bull…</p>

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<p>Sure, the report is complete bull. But I’m not sure it would be possible to get more accurate. For example, where are you going to find the statistically significant population of people who were offered admission to Caltech (or even looked “qualified” to go to Caltech) but who chose not to go to college at all? And why should someone’s million-dollar capital gain be attributed to his college? They are trying to quantify the earning-potential difference a particular college makes. I don’t blame them for trying – it would be interesting to know the answer – but I suspect it would take mounds of data and a zillion simultaneous regressions even to begin to get an accurate answer.</p>

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<p>Even leaving aside the employee (no entrepreneurs / independent business owners) factor, the underlying assumption is also that people manage their careers with an eye solely or mostly towards their paycheck. </p>

<p>I used to work for a Big Corporate Behemoth. When I was pregnant, I had an opportunity to move to another company with a larger paycheck, but benefits nowhere near as good. I didn’t make the move, which worked out well as I subsequently had a half-million dollar medical bill surrounding the birth of my kids, as well as substantial medical bills afterwards. “Maximizing my paycheck” would have been a very stupid move, since it would have ignored the very substantial medical benefits as well as the stock that I received as part of my compensation. </p>

<p>As well, especially after having children, people may choose to maximize other areas in their lives that aren’t the paycheck. Women in particular may choose to “step down” or to take jobs that enable them to be at home more or travel less or whatever. Certainly you can’t say that a person is “less successful” if he or she works hard for the first 10 years but then chooses something that prioritizes family and consequently stalls in pay. You can say that they make less money, but that doesn’t mean they aren’t doing exactly what they want to be doing, which is the whole point, I think. Making the most money just isn’t the end game, IMO.</p>

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<p>I’m not quite sure giving us a poor metric is any better than simply acknowledging that we don’t really know anything about this. Besides, we already have info on the amounts and repayment of student loans. Couldn’t we standardize those with family income? It would seem to me that it’s more important for prospective students to know the worst off they could be, rather than earning potential skewed towards the highest achievers.</p>

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<p>LOL, worst it can be? Alas, if in 30 years one can only earn 1 million, that is $33,000/year on the average. It is certainly worst it can be for an ivy graduate.</p>

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<p>No, you still don’t understand what they are saying. They are saying that the median UofC alumnus wage-slave earns $1 million more over 30 years than (a) what the median high school graduate wage-slave earns over 34 years (the same 30 years, plus working while the college kid was in college), plus (b) the cost of the college degree. Or, more precisely, the median responding wage BA-only wage slaves from each of the last 30 UofC classes, as a group, earned about $1.4 million more than the median high school graduate wage earners from each age group 18-51 combined. So the $1 million probably translates into something like $2.5 million earnings (from wages only) over the 30 years, or maybe $80,000/year average.</p>

<p>And everything Pizzagirl says is right, in addition to which the wage slaves aren’t the ones who are maximizing their earnings. So the whole project is dumb.</p>