Education / Schools, Law Schools, Money, Student Loans

How Much Are Educational Prestige Points Worth in Real Dollars?

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How far are we from getting real answers about the value proposition of going to law school? Pretty far, if you read the New York Times Week in Review. An article by Jacques Steinberg illustrates that researchers don’t even really know if receiving an elite undergraduate education is worth the price.

The Times asks: Is going to an elite college worth the cost? And it comes up with this answer: “It depends.” Thanks NYT. Is mainstream, old media publishing dying a slow death? It depends on how many people want to read articles like this on their Kindles.

Oh, I kid, Grey Lady. It’s not particularly satisfying, but the article provides support for believing whatever it is you believed before you read the article. Do you think that going to the most prestigious school that will accept you is the better long-term choice for your career? Great, you’re right. Do you think that, depending on your family situation, going to a cheaper state school is the right choice for you? Great, right again. Do you think that successful people will succeed? Awesome! The Times likes circles too.

Yay, everybody made the right decision. And since most of the research was done on people who made college choices ten years ago, the ridiculous inflation in the cost of education only makes it more obvious that people should do the right thing — whatever the hell that might be….

In an article that can be used to justify any decision, here’s the top-line research:

Among the most cited research on the subject — a paper by economists from the RAND Corporation and Brigham Young and Cornell Universities — found that “strong evidence emerges of a significant economic return to attending an elite private institution, and some evidence suggests this premium has increased over time.”

Grouping colleges by the same tiers of selectivity used in a popular college guidebook, Barron’s, the researchers found that alumni of the most selective colleges earned, on average, 40 percent more a year than those who graduated from the least selective public universities, as calculated 10 years after they graduated from high school…

Despite the lingering gap in pricing between public and private schools, Eric R. Eide, one of the authors of that paper on the earnings of blue-chip college graduates, said he had seen no evidence that would persuade him to revise, in 2010, the conclusion he reached in 1998.

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It’s the circle of life, right? Ivies admit high achievers, who go on to achieve, and then Ivies can act like they had something to do with it:

In 1999, economists from Princeton and the Andrew W. Mellon Foundation looked at some of the same data Professor Eide and his colleagues had used, but crunched them in a different way: they compared students at more selective colleges to others of “seemingly comparable ability,” based on their SAT scores and class rank, who had attended less selective schools, either by choice or because a top college rejected them.

The earnings of graduates in the two groups were about the same — perhaps shifting the ledger in favor of the less expensive, less prestigious route. (The one exception was that children from “disadvantaged family backgrounds” appeared to earn more over time if they attended more selective colleges. The authors, Stacy Berg Dale and Alan B. Krueger, do not speculate why, but conclude, “These students appear to benefit most from attending a more elite college.”)

So unless you come from a protected class, you should go cheap on your educational expenses? Am I getting that right? The poorer you are, the more important it is to spend as much as possible on education? No, it’s not quite that simple:

Still, [Professor Scott L. Thomas], a sociologist who is a professor of educational studies at Claremont, said high school students and their parents should take any attempt to apply broad generalizations to such personal choices with a grain of salt.

“Prestige does pay,” Mr. Thomas said in an interview. “But prestige costs, too. The question is, is the cost less than the added return?”

His answer was one he said he knew families would find maddening: “It depends.”

“Maddening” is not quite the word I’d use. I was thinking that Professor Thomas’s answer was more along the lines of “intellectual BS you can get away with in academia that makes you unfit to hold any position of importance in the private sector.” But I suppose “maddening” will do.

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If there is a point to doing research of this kind, it is to quantify the economic benefit (or lack thereof) of going to a more prestigious, more expensive school over a less prestigious, cheaper one. Because all of the “depends” factors are going to be things individuals have to sort out for themselves and their families. Professor Thomas goes on to to say that attending a big state school might grant you “tremendous affinity and good will” in that community. Great. How much is that worth in real dollars? Can we please get an economist up in here? Because it is a lot easier to weigh the intangible factors in your life that cannot be quantified when people are giving you a heads up on the economic realities that can be quantified.

If I go to a Northeastern Ivy League college instead of the University of Miami, I know what I’m giving up: living in Miami with attractive people and sunshine for four years, Cuban cigars, Dwyane Wade, and more drag queens than I can shake a stick at. That’s what I lose by going to school up north.

What am I getting, on average? Ten percent earning potential over the course of my life? Thirty percent? How does that interact with my expected debt load? SHOW ME NUMBERS, and then I’m in a better position to know how much good-looking everything is worth to me. Otherwise, people find themselves saying things like, “Miami has a really good marine biology department, but I’m almost positive I’d be an idiot to turn down Princeton for swimsuit models… I mean “marine biology professors.”

Everybody’s got their own anecdote about why they went to the college they did. Almost everybody has a vested interest in making their choice sound reasonable to others. And that’s fine. Everybody has a right to be proud of where they went to school.

But it would be great if researchers could give us some hard numbers to help people make more informed decisions. And it’d be great if those numbers weren’t ten years freaking old. I’m looking at you “scientists.” Get on it — what is the value, if any, of going to an expensive school versus an inexpensive school?

Is Going to an Elite College Worth the Cost? [New York Times]

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