Does It Matter Where You Go to College?
Many students and parents believe that attending an elite university is a golden ticket to a prosperous future. And that belief isn’t entirely unfounded, as statistics continue to show the majority of the country’s highest-paid graduates attended highly selective universities.
However, many who dream of attending an elite school may never do so. Perhaps, despite a stellar academic record and maxed-out extracurricular schedule, their acceptance letter never comes. For the 2017 to 2018 academic year, 281,060 students applied to the nation’s eight Ivy League schools and, of these, less than 10% received offers.
Two of the most selective schools in the country, Harvard and Stanford, each have acceptance rates of roughly 5%, according to U. S. News. That means only 1 in 20 applicants is extended an admissions offer from these prestigious universities. Many other elite schools have similar acceptance rates.
For other applicants, perhaps that acceptance letter does arrive, but without a financial aid package that makes attendance possible. According to The Princeton Review’s 2018 College Hopes & Worries Survey, a majority of parents and students list their biggest concern as the “level of debt to pay for the degree,” followed closely by the fear that students “will get into [their] first-choice college, but won’t have sufficient funds/aid to attend.” These worries are hardly surprising considering the total cost of attendance at many elite schools can range from $60,000 to $70,000 per year.
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So, where does that leave students who will never attend a prestigious university? Are they doomed to make less than their counterparts who graduate from elite schools? Does it really matter where you go to school?
Benefits of Attending an Elite School
There are unquestionably some benefits to attending an elite university. The name recognition of a Harvard, Princeton, or Stanford degree carries with it a certain prestige that can act as a gatekeeper for employers. Some employers prefer candidates who went to a highly competitive school, believing the admissions department of a school like Harvard has already managed the selection process for them.
That’s why these schools are often called “feeder schools”; since some top employers trust the schools to make the selection for them, graduates are essentially “fed” to top firms. This is especially true in the highly competitive fields of business, law, and finance. For example, the Ivy League University of Pennsylvania is the primary feeder school for top finance companies like Goldman Sachs, Morgan Stanley, and Citigroup.
Networking opportunities are also much better at elite universities, as they often attract top experts and specialists for conferences and speeches, in addition to giving students the chance to network with highly successful and influential alumni. Some of the most powerful people in the world attended Ivy League and other elite schools, from U. S. Supreme Court justices to presidents, CEOs, and billionaire entrepreneurs. Many of these influential graduates remain connected to their schools, from donating endowments to looking favorably upon job applicants who graduated from their alma mater.
So, depending on your chosen career field, you can get more than just an education at a top school; it can open up a whole new world of opportunity for you. But the emphasis here is on the word “can.” You aren’t necessarily doomed if you don’t get into your top-choice school or decide not to attend a prestigious university for reasons such as financial ability or cultural fit.
The Impact of College Selectivity: Clashing Views
Traditional wisdom holds that going to selective colleges entails better pay-offs for students than going to non-selective colleges. One study that supports this was done by the National Center for Education Statistics (NCES) in 2000. In this study, researchers found that obtaining a degree from a selective institution was associated with an 11% to 16% increase in earnings for men. On the other hand, attending selective institutions was associated with an increase of 12% in earnings for women. Moreover, women benefited by attending a selective liberal arts college, which led to 24% higher earnings than they would have had if they would have attended another kind of school (Fitzgerald, 2000).
However, a study by Dale and Krueger (1999) found that where you go to college doesn’t matter in terms of income. They concluded that “students who attended more selective colleges did not earn more than students who were accepted and rejected by comparable colleges but attended less selective colleges.” They found that students who attended colleges with higher average tuition tended to earn higher income years later. Lastly, they found that income gains are highest for students who come from a disadvantaged background who study in elite schools.
Does It Matter Where You Go to College?
This year, more than 2 million Americans will apply to college. Most will aim for nearby schools without global brands or billion-dollar endowments. But for the tens of thousands of families applying to America’s most elite institutions, the admissions process is a high-cost, high-stress gantlet.
American parents now spend almost half a billion dollars each year on “independent education consultants,” and that’s not counting the cost of test prep or flights and hotels for campus visits. These collegiate sweepstakes leave a trail of frazzled parents and emotionally wrecked teens already burdened with rising anxiety, which raises a big question: Does it really matter whether you attend an elite college?
The seemingly obvious answer is, Of course it matters! How could it not? Ivy League and equivalent institutions provide more than world-class instruction. They confer a lifetime of assistance from prodigiously connected alumni and a message to all future employers that you’re a rarified talent. College isn’t just an education; it’s a network, a signal, and an identity. Elite schools seem disproportionately responsible for minting the American elite. About 45 percent of America’s billionaires and more than half of Forbes’s list of the most powerful people attended schools where incoming freshmen average in the top first percentile of SAT scores.
But what appears obvious may not be true. In November 2002, the Quarterly Journal of Economics published a landmark paper by the economists Stacy Dale and Alan Krueger that reached a startling conclusion. For most students, the salary boost from going to a super-selective school is “generally indistinguishable from zero” after adjusting for student characteristics, such as test scores. In other words, if Mike and Drew have the same SAT scores and apply to the same colleges, but Mike gets into Harvard and Drew doesn’t, they can still expect to earn the same income throughout their careers. Despite Harvard’s international fame and energetic alumni outreach, somebody like Mike would not experience an observable “Harvard effect.” Dale and Krueger even found that the average SAT scores of all the schools a student applies to is a more powerful predictor of success than the school that student actually attends.
This finding suggests that the talents and ambitions of individual students are worth more than the resources and renown of elite schools. Or, less academically, the person you’re becoming at 18 is a better predictor of your future success than the school you graduate from at 22. The takeaway here: Stress out about your habits and chill out about college.
That’s kind of inspiring. It also implies that all the angst and time devoted to the infamous admissions process is a wasteful pageant for the vast majority of its participants. Could that really be true? Or were Dale and Krueger off somehow?
This month, economists from Virginia Tech, Tulane, and the University of Virginia published a new study that reexamines the data in the Dale-Krueger study. Among men, the new study found no relationship between college selectivity and long-term earnings. But for women, “attending a school with a 100-point higher average SAT score” increased earnings by 14 percent and reduced marriage by 4 percent. That is a huge effect. Has one of the most famous papers in education economics been debunked?
Not quite, says Amalia Miller, a co-author and an economist at the University of Virginia. “The difference we found is that college selectivity does seem to matter, especially for married women, by raising earnings almost entirely through the channel of increased labor force participation,” she says.
If you’re not an economist, that might sound complicated. But it’s pretty simple. For the vast majority of women, the benefit of going to an elite college isn’t higher per-hour wages. It’s more hours of work. Women who graduate from elite schools delay marriage, delay having kids, and stay in the workforce longer than similar women who graduate from less-selective schools.
This finding complicates the trendy “opting out” theory, which says that women who graduate from top schools are particularly likely to drop out of the labor force after they have children. In fact, the only gender-specific effect of attending elite colleges is that female graduates are more career-focused.
Selective schools also seem to make a difference in the lives of minorities and students whose parents have no college education. A 2017 study led by the economist Raj Chetty found that lower-income students at an elite school such as Columbia University have a “much higher chance of reaching the [top 1 percent] of the earnings distribution” than those at an excellent public university, such as SUNY Stony Brook in Long Island.