Why Prestigious Colleges May Not Always Be The Best

First year Philosophy students at Loyola University, ca. 1965. Nearly 85% of them graduated four years later with a Bachelors degree in Philosophy. But the economic environment at the time allowed them to parlay their degree into other areas, unlike today when more pragmatic majors are demanded and 'numbers'  are used to drive decisions such as at collegemeasures.org

As student debt mounts into what is rapidly becoming another bubble, now exceeding $1.2 trillion, and more than 7 million debt- laden graduates having already defaulted on college loans, new approaches and remedies have come to the forefront. I noted some of the novel findings in a post nearly two years ago.  Much of the background research was done by College Measures - a joint venture of the American Institutes for Research (AIR) and the Matrix Knowledge Group. The study was funded by the Lumina Foundation. The site's objective is to enhance the cost-benefit ratio for college grads by compiling earnings statistics for different degrees in different states and thereby showing which majors are likely to confer the greatest economic benefit.

One surprising insight was that community college grads reaped economic benefits that rivalled and even exceeded those from more expensive 4-year institutions.   For example, one report found that for all nine Tennessee four-year public campuses, the average wage for graduates with a bachelor’s degree was $37,567. For graduates of the state’s 13 community colleges, the average wage was $38,948, or more than $1,300 higher than at four-year institutions. There is a wide range between the highest and lowest incomes of those earning bachelors, associates and certificates.

Meanwhile, a related Denver Post piece at the time reported :


“Students who earn associate's degrees in applied sciences earn a median salary of almost $7,000 more than those who get a bachelor's degree from four-year institutions, according to a report issued Wednesday by the state Department of Higher Education.”

These variations, especially in terms of community college benefits vis-à-vis those for more expensive 4-year schools, highlight the crux of the problem of college expense in relation to later benefit. The questions becomes: Why go into severe and massive debt at a 4-year full degree granting institution if one can obtain a quality associate degree and earn as much or more?

But an ancillary question is: Why go into severe and massive debt at a prestigious or elite university like Harvard or Stanford when one can actually come out economically ahead - in less debt and with better pay - on graduating from a public university?  The surprising finding - reported in The Wall Street Journal (February 1, p. R1) is that the extent to which one benefits really depends on one's major. A point I also brought up in a post last year.

The Journal looked at about 7,300 college grads ten years after their graduation and divided their major into several categories: business, engineering, social sciences, humanities, education and 'other'. They also cross-referenced three categories for college type: "selective" (covering elite schools), midtier, and "less selective" (covering schools with open enrollment - e.g. like the University of South Florida, my Alma Mater).

As the Journal authors (Eric R. Eide and Michael J. Hilmer) put it:

"What we found startled us. For STEM-related majors, average earnings don't vary much among the college categories. For example, we found no statistically significant differences in average earnings for science majors between selective schools and either midtier or less selective schools."

This is truly amazing and also important. It means, basically, that one will not be significantly better off with earnings in the physics field - for example - graduating from Harvard than the University of South Florida. He or she may actually be worse off graduating from Harvard if one has only minimal financial help (other than loans) to pay back the hefty debt incurred from the purchase of all that name prestige.

As the authors put it (p. R2):

"Our findings are crucial for families to understand because chasing a prestigious STEM degree can leave students burdened with huge amounts of unnecessary debt."

This also conforms to a May, 2011 MONEY magazine investigation which found it is more the name and reputation of the specific department that conferred benefits than the school itself. As the MONEY authors put it:

"Don't assume an Ivy League education is better than one from a public or state university."

 MONEY found that  'bang for the buck' included college graduation rates and post-college success rates - which compared favorably to - or exceeded  - what one obtained from the hallowed Ivies. Alas, this has still not trickled down into the mainstream media where we still find "Best Colleges" lists spread around with the Ivy Leagues on top - then all the rest. So no wonder students and their parents are neurotically driven to believe the Ivies are the  only route to success.

This is something students and their parents will need to seriously consider before stretching their meager resources beyond practical limits and saddling graduates with huge debts just for the sake of a name.

On the other hand, for many high -priced public universities, we shall have to wait for the implementation of Bernie Sanders's' plan (assuming he is elected and I believe he can be) for free public college. European nations do it because they understand having debt-free and capable citizens is a better investment in their futures than endless wars. We can do it too if we have the political will!

College Measures: Are They Really Helpful?

First year Philosophy students at Loyola University, ca. 1965. Nearly 85% of them graduated four years later with a Bachelors degree in Philosophy. But the economic environment at the time allowed them to parlay their degree into other areas, unlike today when more pragmatic majors are demanded and 'numbers'  are used to drive decisions such as at collegemeasures.org. No surprise that the percentage of  students graduating has gone down.

A stream of articles and letters the past few weeks highlights the economic benefits of a college education and the need for more prospective students (and parents) to consult a key website known as ‘college measures’:
http://collegemeasures.org/


College Measures is a joint venture of the American Institutes for Research (AIR) and the Matrix Knowledge Group. The study was funded by the Lumina Foundation. The site seeks to enhance the cost-benefit ratio for college grads by compiling earnings statistics for different degrees in different states and thereby showing which majors are likely to confer the greatest economic benefit.

Naturally, as one peruses the site, the most economically potent degrees fall under engineering and science (including computer science), as well as pragmatic majors like business. For example a report in The Denver Post recently (See, e.g. http://www.denverpost.com/news/ci_22785790/job-prospects-salary-report-colorado-colleges )  noted that a business administration grad from the University of Colorado, Denver had a median first-year salary of $43,518, while someone leaving Regis University with the same degree made $57,120. Meanwhile, fine arts grads graduating in the state had a median salary of $29,315, while the median for registered nursing students was $52,689.

So there exist divergences based on not only choice of major for the degree, but where it is received. One surprising aspect is that community college grads can produce economic benefits that rival and even exceed those from more expensive 4-year institutions.   For example, one report found that for all nine Tennessee four-year public campuses, the average wage for graduates with a bachelor’s degree was $37,567. For graduates of the state’s 13 community colleges, the average wage was $38,948, or more than $1,300 higher than at four-year institutions. There is a wide range between the highest and lowest incomes of those earning bachelors, associates and certificates.

Meanwhile, in Colorado, as The Denver Post reported (Ibid.):


“Students who earn associate's degrees in applied sciences earn a median salary of almost $7,000 more than those who get a bachelor's degree from four-year institutions, according to a report issued Wednesday by the state Department of Higher Education.”

These variations, especially in terms of community college benefits vis-à-vis those for more expensive 4-year schools, highlight the crux of the problem of college expense in relation to later benefit. The questions becomes: Why go into severe and massive debt at a 4-year full degree granting institution if one can obtain a quality associate degree and earn as much or more? This has also, in Colorado, incited discussion of making community colleges 4-year institutions themselves.

A more questionable argument that has emerged is the one that if students do attend 4-year colleges they ought to select majors that promise the biggest bang for the buck. The earlier stats I cited showing the median salary for a fine arts grad vs. one in nursing, makes the point. 

In effect, the subtext argument is that before parents pay for Junior’s college education they need to consult college measures to see exactly which majors-degrees promise to deliver the highest median salary for Jr. and thereby get him out of debt fastest. Philosophy? Uh…no way, kiddo! We don’t want to see you babbling Sartre on a street corner in San Fran 6 years from now, tin cup in hand! You ARE going into Business Administration! Now, no more discussion!

Or as one letter writer to the Post put it:

"As in all monetary investment decisions, there are good investments and there are bad investments. A bad university investment results in a degree with insufficient earnings potential to cover living expenses plus the debt accrued to pay for the degree.


Maybe more students and university administrators should take a lesson from the actress Brooke Shields, who once explained that she already had a well-paying career (modeling and acting) and thus was able to ignore the consequences of earning her low-salary potential degree in French literature from Princeton."

This is all well and good if Junior was an automaton or pod person (recall ‘Invasion of the Body Snatchers’) with no personality of his own, no innate aptitudes, preferences, or temperament. But what if he isn’t cut out to be a business person, and has scant interest in it? What if he instead prefers Music or yes, Fine Arts? Or Philosophy like those Loyola students shown?  Similarly, what if Missy has no interest in Nursing, and indeed caring for other people in very personal medical settings goes against her temperament? Are you still going to force her to do it because it means she’s more assured of a job and paying off her college loan debt?

Pardon me, but this is terrible, counterproductive reasoning. Basically, parents would be creating an economically sound grad, but at the expense of being perfectly miserable in her job and arguably a miserable person through her life. Here one must reckon in the unseen, intangible costs of psychological depression, or even breakdown as the person's ability to cope deteriorates with time.


One reason I transferred from Loyola University (despite winning a scholarship there) to the University of South Florida, is that the latter had a quality astronomy major which I’d always wanted to do. On learning that some of the best ‘stars’ in astronomy had transferred there from Yale (including Sabatino Sofia, and James H. Hunter in astrophysics) it was a no-brainer to do an astronomy degree there. Also the fact the chairman was Prof. Eichhorn von Wurmb.


Did I worry and fret over the money on graduating? Hell no! In fact, that Bachelors degree paved the way for my later solar physics work at post-graduate level which would be fully supported by a grant from the Barbados government. One could say that I actually got two degrees for the price of one!

The moral of the story may be that it’s more important for students to select a major to which they can fully commit and pour energy and heart into to end up with a degree, than one that may be more ‘pragmatic’ but which they’re not invested in. This is especially important given that nearly 3 in 5 U.S. students bail out before completing 4-year degrees. One plausible reason is that the dropouts selected a major for the wrong reasons, and given that any degree demands vast commitment, they lacked the drive to finish it. In real terms, they truly ended up spending a ton of money for nothing!

Perhaps then, for a student who hasn't made up his or her mind, the best course of action is to start out at a community college (where minimal damage will be done economically) than at a 4-year college. I believe I had recommended this course of action before in earlier blogs - and it still makes sense.