Elite Schools (and their high tuition) Overrated? Yep!

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.”

  1. It is great if you can send your children to a good school without worrying how to pay the bills next month, however the name of the university doesn’t make a career, it takes much more than that. I have friends with MBAs and other degrees from good schools who can’t find jobs for months and some even years…

  2. I disagree. More than a degree, these institutions are providing networks, opening doors and readying opportunities that are not available to others. Nothing is guaranteed in life but the investment spent in a top university is well worth it still.

  3. I believe it is a case of the have and the haves and the have nots. If the family is well to do, then, they will of course make it a point to send he/she to the best school around the States. The bottom line will remain to be seen 6 to 9 months after graduation.

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