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January 12, 2010


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I completely agree. The friends I had in high school that have really succeeded in their careers were the ones with the most drive, not the ones that went to the "best" colleges. Motivation and drive...two of the most important attributes of success.

Yea, I say #1 is usually false and #2 is usually true. Although, contacts and network is something you can work on all through your career and end up making out very well, without having gone to a elite college.

It seems to me that what you are paying for by going to one of these colleges is recruiting and alumni network. There are certain industries/companies that are very very difficult to get into if you don't go to the right college (mostly companies).

Take investment banking for example. It is pretty well known (at least, I think) that there are what are called "target schools." These are the schools that most investment banking firms (or the investment banking division of a firm) will only go to recruit students. JP Morgan Chase, Goldman Sachs, Morgan Stanley, BofA, Citi, Barclays, UBS, Piper Jaffray, Lazard, Jeffries, and on and on. And it is very competitive... a lot of kids want to work in this industry. You start out as an analyst and you make 110-160k (all in) your first year. Strategic/business consulting is similar to this, but the pay is a little less. Anyway, the point is... if you graduate from the University of North Dakota for example, it ain't happening. None of those firms even go to that school to recruit. So if you already know what you want to do going into college (granted, most kids don't), it pays to go to certain schools.

Also, in this wall street example, once you are in the have a much easier time climbing the ladder if you are a Dartmouth or Cornell graduate than if you are a University of North Florida graduate. One of the reasons is simply because the people doing the hiring are from the same school you are! It's definitely a buddy network.

It may be unfair, but it doesn't make it untrue. Fact of life... and I don't see that changing much in the near future.

I strongly agree that the added cost of private schools is not worth it. A top ranged public school is the best education buy.

I work at one of those big brand name companies and I make six figures. I went to local public universities. I am surrounded by people who went to public colleges. So I know first hand you can do very well with public university degree.

Of course I wouldn't turn down a free ride to Stanford either. Elite schools do have value, just not enough to warrant paying the full sticker price.

When I was in high school I met with the local Notre Dame admissions rep (usually someone active in the local alumni club). We discussed many things, including financial situation. My parents were generous enough to offer to pay for two years of tuition at ND, but no more. If I went to a cheaper school, they could cover more (they spent the first 10 years of their marraige paying off my dad's ND loans so they wanted to do all they could for my brother and I to start our adult lives debt free). After talking about what I wanted to do, Big 6 (at the time) accounting, and my intention to eventually go to graduate school after a fews years of working, he did not beat around the bush in saying DO NOT go to Notre Dame for undergrad, go for graduate school. His point was that I could get great accounting training at a lot of schools, any of which could help me land a Big 6 job, tuition for 4 years of undergrad vs. 2 years for grad was a big difference and graduating debt free is a great deal.

I still went to a great school, graduated debt free (thanks mom and dad! and I did have a half tuition scholarship which I never would have gotten at ND) and went onto Big 5 (Price and Coopers merged while I was in college). A few years later I ended up working with someone from ND and the only difference between the two of us was school debt.

The lesson I learned from that, and from seeing other people in similar situations, is that taking on a bunch of debt for an undergrad education is not necessarily going to put you to the top of the job market. Tons of schools can teach you to be an accountant, teacher, social worker, etc. Look at your after school career plans to see if a school's tuition is worth it. Unless you want to go straight to Wall Street or a specific company that only recruits from one school, the extra cost is probably unnecessary. Spend your money on a great grad school, or even a decent one, where it can make a bigger difference in your career trajectory, where you are hired after graduation and when you are more sure of what you want to do. The last thing you want to do is at 18 decide you want to be an engineer, build up 80k in school debt and end up at 22/23 wanting to be in a profession that pays 30k a year.

Still haven't made it to grad school, but still might in the next few years.

Hard to disagree, especially as 99% of kids starting college haven't a clue what they'll do upon graduation. And after all a couple of years out you're likely working with a lot of people (like me!) who went to furrin universities you've never even heard of and who even asks beyond polite conversation at that point where you went to college. I imagine there's probably exceptions to the rule - perhaps academia and i-banking as pointed out above are a couple. Personally, my university was a mostly vocational college and had a trade school attached - I learned a lot career- and other-wise from that, far more than if I'd ended up in a many-thousands-of-classmates liberal arts program.

I agree that the value of going to an elite college is often played up, and that the earnings bump may not be significant.

I do think that there are strong non-pecuniary benefits to going to a top school, though. First, your classmates will likely be very smart and motivated, which can expose you to a whole range of ideas and careers that you would not have considered. In addition, smaller classes with more intellectually curious peers can simply make learning more enjoyable. This level of exposure can be very important in helping you figure out what you're really passionate about, which can probably make you a happier person if not a (financially) richer one.

The alumni network that these schools offer can also make it easier to get better jobs in the future, and the campus recruiting opportunities can open the doors to finance, consulting, and other careers that would simply be closed off if you went to a lower ranked school.

I agree that going to an elite school is not worth going into substantial debt. A motivated student can do well at almost any school. However, as a Stanford grad, I would like to express some additional thoughts. First off, don't underestimate the amount of financial aid (grants rather than loans) some of the elite schools can offer.
Second, I graduated in 4 years with an engineering degree. Some of my friends graduated in 4 years WITH a masters. My cousins who went to the state school couldn't get the classes they needed and it took them 5, 6, even 7 years to graduate. At Stanford, you show up to the classes you want to take, and the first week of the quarter T.A's are added if more students want to the class than anticipated. There is no concept of not being able to get into a class.

Thirdly, to me education is much more than about getting a job with a good salary afterwords, although that is one goal. I loved loved loved being surrounded by other bright and motivated people, people who had focused their drive and DONE STUFF already in their lives. My friends were fabulous musicians and athletes, math geeks, had started non-profits, and basically were by and large people with a passion for life and learning. It was a wonderful environment to be in, and I grew a great deal. If I dare, I will say that I find now (having many friends and coworkers from both private and state schools) that my friends from Stanford tend to be more multifaceted than my friends from state schools. In addition to being good engineers they are also passionate about a hobby (or 6...). Of course this is a generalization, but I think at Stanford there was this idea that you would be passionate about many interests and take courses outside of your major just for fun (even as an engineer!).

Lastly, recruiters tend to focus on particular schools. I see this from the other side now, as a recruiter. Going to an elite school can open doors. Not that those doors couldn't be opened otherwise,'s easier, I think...

Just my thoughts.... I'm eager to read the comments.

On the actual summary of the article in question on the NBER website:

The following statement can be found near the bottom of the summary:

However, the average tuition charged by the school is significantly related to the students' subsequent earnings. Indeed, we find a substantial internal rate of return from attending a more costly college.

I find this to be a bit troubling and questionable as to the methodology. So the eliteness of the selction criteria doesn't translate to income, but simply charging more tuition does. This would imply that you truly do get what you pay for and thus if you want to make the most money you should find the most expensive college available. It seems to somewhat contradict the first statement about eliteness and also seems to be a bit odd since the elite schools are generally the ones with the highest tuition.

I am not quite sure how to reconcile the seeming contradiction??

Anyone have any thoughts on why eliteness doesn't matter but cost does?

I agree with the post.

In my field (biomedical sciences), it's not where you go to undergrad, it's what you learn while you're there (which will show up in your postgrad GRE or MCAT exams). Of course, you should strive to go to an academically good undergrad school, it just doesn't have to be in the top 5 or 10 in the country. I expect to send my own children (in 10 yrs or so) to a reasonably priced but academically rigorous state school (unless they win scholarships Harvard, Standford are out of the question--too expensive!)

Grad school is another matter, however. Go to one of the top 10 or forget it.

SO agreed. The guy I used to rent a room from didn't even go to college at all...he was a self-taught computer making 6 figures at a good job. He got in because he knew someone. My little brother went to a not-so-great state college, and graduated with a very low GPA (too much partying, not enough studying). His company sent him to Hawaii, and is paying him close to 6 figures. He got in because he knew someone (and because he is quite charismatic).

Really, it's more of who you know, and how much you can schmooze/be a people person, rather than what college you go to. Sure, you have to have the skills, but they're secondary, since you need to get a foot in the door first, and that's done through networking, knowing people, and being charismatic.

I don't think this analysis holds true for law schools. Do the research and it's clear. Job prospects and income are much brighter for the top 10 law schools than for the bottom 10. Especially in your first few years out of law school.

The answer depends upon the field that you are in.

For Business and Law it seems to be quite important.

For Engineering it doesn't seem to matter very much. The company that I retired from, Lockheed Martin, had a list of preferred universities and they were the ones with excellent reputations, well known professors, and whose graduates had become excellent employees. Companies also tend to know and have close relationships with their nearby universities, so that also helps.

In times like these there are no doubt far more applicants than there are jobs so an engineering company is going to scan the resumes very closely and only bring in the applicants with the best GPAs and from the best universities. Once you have your foot in the door what matters most is your job performance, not where you graduated. Lockheed/Martin has two ladders for engineers, Technical and Managerial, with very comparable pay scales up to a certain level. The technical ladder doesn't go up as high as the Managerial ladder so a person with a BS and an MBA, could eventually rise to a much greater salary than a person with a PhD, but the PhD may be happier and find his work more satisfying.

I went to good but not the top schools (Johns Hopkins for Undergrad, University of Virginia for a Masters) and I can say there is value in going to a 'name' school, especially if you end up moving into different fields & job changes. The University name comes up at these critical junctures. It's not enough to win an unqualified applicant but over a lifetime is quite substantial. Most people I know who have a degree from a no-name school or no degree end up sticking around for the same employer where they will progress quite far. However if you want to grow your salary by strategically changing jobs then go to a top school.

I tried to go get into the top ivy leagues but wasn't accepted. I believe that if I went to the very top schools I would be more successful than I am today.

If you want to get a serious job in finance and / or politics then it's best to go to Harvard and do a stint at Goldman Sachs, at least that's what the situation is as of now.


The individual clearly matters most of all. Holding all things constant, if you get into a top school, you should go there. I don’t know how the WSJ did their analysis, but the average student who graduates from any Ivy League school makes more than the average state school graduate- this is a fact. Middle range private schools are not elite colleges. In addition, your risk adjusted income is far greater when you attend a top school (probability of making 200k+ graduating from Harvard is far greater than the probability of making 200k+ graduating from the U of I). Best school possible is very different than Best school overall.

“A person with the right drive and the willingness to work and succeed will do well whether he goes to Harvard or the University of Iowa.” Maybe. But I guarantee you the likelihood of success is greater if he also had Harvard behind him. Two people, exactly the same in every way, the one from Harvard gets the opportunity over the one from Iowa. Don’t kid yourself, the gap between Harvard and Iowa is massive. When was the last time you had lunch in Manhattan at the Iowa Club? You never get bumped into if you’re not in the way and you’re not in the way when you graduate from Iowa… you’re not even in the room.

I went to a State school. Many of the people I compete against on a daily basis went to elite schools. They got access far easier than I, because of the school they attended.

People who can afford a more expensive college are
more likely to have the connections (family and otherwise) to get a high-paying job,
or are more likely to be able to afford med school or law school which lead to jobs with higher incomes,
or are more likely to feel pressure from their successful families to be successful themselves and thus concentrate on getting high-income jobs.

Thank you!!! For some reason people often assume that elite schools don't give financial aid. Yale was my cheapest option out of the schools I got into (including state schools). I will graduate with zero debt.

I agree with Old Limey in that for law, where you went to school is very important. If you didn't go to a top 14 school, it automatically shuts you out of many opportunities, even after you've been working for many years. When I interviewed for jobs after 10 years of practicing law, law firms and legal departments of companies still paid attention to my Ivy law degree and the first job I had out of law school (at an elite law firm). Prestige is a stupid way to make hiring decisions, but it's still done, especially in conservative professions.

That was very true for me, too. Going to an elite school doesn't necessarily mean you're going to graduate with a mound of debt, if you can get financial aid. I went to MIT and graduated with a relatively small amount of debt (around $19K of federal loans for a bachelor's degree). None of the other schools I applied to (decent regional schools) offered nearly as much aid, probably because their endowments were much smaller. People should always apply if they think they can get it, you might be surprised at how much aid is offered, or what scholarship opportunities are out there. For people with lower socioeconomic backgrounds (like me), going to an elite school can put you on par with those in the upper classes when it comes time to graduate and get a job.

I would absolutely say to go to an elite school if it's financially equal to a non-elite school. In many situations, having gone to an elite school will open doors for you, warranted or not. People respect the school and your degree more, and you may be offered opportunities that wouldn't be available otherwise. Is it fair? No. Does it happen? Yes. For those of us who grew up poor, it makes a hard life somewhat easier.

In my experience, the most helpful and intelligent people always come from some small, exclusive woman's college that's I've never heard of.

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