Parents certainly don’t want to deprive their children of the chance to succeed. This feeling, this urge seems especially acute in this day and age of economic struggle, with the middle class being squeezed into oblivion. As August approaches, a number of my parental peers are facing big college tuition bills for their children, some paid out of fear (I suspect) that doing otherwise will jeopardize their children’s future. But I know that they aren’t paying those tuition bills just from well-funded 529 plans. So, where is that money coming from? Their futures.
That leads me to a question I’ve wondered about for some time: Is an “Ivy League” education, a diploma from a prestigious university really worth it? (This coming from a graduate of a public university.) Should parents be risking their own financial futures to foot the bill (or partial bill) for these “elite” educations? Does a diploma from a top-ranked school equal higher earnings (ie, a better future) for a child?
According to Alan Krueger, economics professor at (ironically) Princeton University, the answer appears to be no. In the article “Elite Schools Are Overrated,” in the June issue of Money magazine, Krueger and colleague Stacy Dale say that they gathered data from more than 26,000 students from two dozen schools (including schools such as Penn State and Yale), and the bottom line was this: “Over the course of their careers, the students who chose not to attend the most selective schools to which they were admitted earned about as much as those with similar grades and test scores who went to the highest-ranked college they got in to.”
Krueger’s advice was this, “… if you have a child applying to college, ignore the various rankings.”
Perhaps we can all breathe a collective sigh of relief. Think of how much those savings will be able “buy” in terms of a more secure retirement. The kids may actually come out ahead: They get a college education and won’t have to worry about parents with no retirement funds moving in with them later on. And as far as name prestige, a parent I know had this to say, “Pick up a sweatshirt at the Harvard bookstore.”