What’s in a Name? Elite Schools May Not Be Worth The Costs
When it comes to choosing a college, students and parents may think it's worth the hefty price tag to attend a more prestigious school. Who doesn't dream of an Ivy League diploma on their office wall? But a recent article in The Wall Street Journal shows that attending an elite level college may not actually pay off in the end. While highly selective schools can offer an edge for students majoring in liberal arts, the same does not hold true for STEM (Science, Technology, Engineering and Mathematics) majors.
Researchers looked at about 7,300 college graduates ten years after graduation. Here's what they found:
For STEM-related majors, average earnings don’t vary much among college categories. Researchers found no statistically significant differences in average earnings for science majors between selective schools and either mid-tier or less-selective schools. Likewise, there’s no significant earnings difference between engineering graduates from selective and less-selective colleges, and only a marginally significant difference between selective and mid-tier colleges.
The starkest earnings differences are for business majors, where graduates from the selective institutions earn 12% more on average than mid-tier graduates and 18% more than graduates from less-selective colleges. Social-science majors from selective colleges earn 11% more than their mid-tier counterparts and 14% more than those from less-selective schools.
What’s the difference? According to the article, the skills students learn in STEM fields appear to trump prestige—possibly because curriculums are relatively standardized and there’s a commonly accepted body of knowledge students must absorb. So, a student may not need to attend the best possible school to ensure a good salary after graduation.
How can you be sure your college education will pay off?
There are never any guarantees, but one place to start is to gather data from potential school choices about their graduation rates and job placement rates within the field you plan to pursue. Does it take five years instead of four for most students to complete their degrees? (Longer college career = more potential debt and missed earning potential.) How many graduates receive job offers right out of college? What are their average salaries?
In the end, only you can decide which college is right for you. Make sure to do some research into each school you're considering, and remember that a diploma from an elite university isn't an automatic ticket to a better job.
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