Your Elite School Is Not Worth The Cost, Studies Say

Your Elite School Is Not Worth The Cost, Studies Say

By Rick Smith

The cost for a college education has risen to the astronomical, resulting in debt that haunts young people after graduation like a ghost bent on dragging them to a Dickensian poorhouse.  It’s forcing us to ask, “Is it worth it?” Especially if the school of choice is an elite institution, is the gamble a card well played, or a sucker bet?

Malcolm Gladwell has turned many heads with his opinions that students are actually much more likely to be successful in their careers and lives over the long run if they do not attend the most prestigious school to which they are accepted. His theory (detailed in his book, David and Goliath,) is that choosing to attend the very top school to which you are accepted makes it much more likely that you will be an average performer in that school – or worse. Better to be a big fish in a little pond, he writes, than to have your confidence crushed in a hyper-competitive talent pool to which you were the last invited to the party.

Rather, Gladwell’s research found, if you attend the second or third most selective and rigorous choice on your list, you are more likely to outperform your peers. This, he contends, is the most critical factor. Why? Because if you graduate in the top percentage of your class, the research indicates that you are much more likely to succeed during your career – no matter how highly ranked your school is. Conversely, if you graduate in the middle or bottom half of your class, no matter how prestigious the school, you are less likely to be successful. It is the confidence gained from working hard and succeeding that propels you into the workforce ready to take on the world.

Critics contend that Gladwell has vastly oversimplified the issues, but other researchers have produced corroborating evidence. A few years back two experienced and respected economists, Stacy Dale and Alan Krueger, published a research paper arguing that the most elite colleges did not give their graduates an earnings boost over less prestigious schools they may have chosen. They did find that graduates of elite colleges made more money over time than their counterparts at less elite schools. By itself, this statistic would lead you to believe that it was the college that gave them the earnings boost. But the researchers then controlled for the colleges the students applied to and were accepted to.  Once they factored this in, the differences in long-term compensation disappeared.  For example, a student who attended Penn State, but who also had applied and been accepted to the more prestigious University of Pennsylvania earned as much over time, on average, as a student who attended U Penn. But even more surprisingly, the long-term earnings differences went away even if you only considered where the student applied, whether or not they had been accepted!

So, the research is telling us that an elite education is likely to leave half to two thirds of graduates demoralized and broke, without so much as an earnings boost for their troubles.  How can the cost of an elite education be worth it?


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