The rising cost of college has been a serious issue in recent decades. Students everywhere are trying out different strategies as a result. Some are deciding not to go to college at all—that the cost outweighs any potential benefit. Others are laser-focused on going to the most prestigious college possible. Still others are so aimless that they never finish their degrees for one reason or another. Yet the answer may be much simpler than students realize. High-school graduates wishing to maximize their chances should pick a college they can afford and make sure to graduate.
Earlier this year, Bloomberg News released an analysis of more than 1,500 nonprofit, four-year institutions and found that many elite, private schools (outside of the eight Ivies) have a worse return on investment (ROI) than less selective (and cheaper) public universities. Among the underperforming colleges are the 63 “Hidden Ivies”—the top private colleges, such as Louisiana’s Tulane University, that are considered by many to be below only the eight Ivies in rank. Many students (and parents) will shell out more of their money and sign up for significantly more student loans in order to attend these famous institutions, yet their ROI is nine percent less than states’ public flagships.
Some types of colleges produce significantly lower median earnings for attendees when data include non-completers.This is not to say that going to such colleges is a complete waste but, rather, that the college one does choose should be as cost-effective as possible. Where ROI is concerned, reputation is not as important as major. When students spend more on a “Hidden Ivy,” they assume they will get a higher ROI. But the Bloomberg analysis shows that they might be better off going to a lower-cost state school (and choosing a major in a STEM field) in order to maximize their ROI.
While some say that attending college is not worth it at all, a new Georgetown study predicts that two-thirds of “good jobs” will go to bachelor’s-degree holders by 2031, compared to 59 percent in 2021. Completing college is still the best guarantor of high earnings in the future. The study defines a “good job” as one offering a minimum salary of $43,000 per year and a median salary of at least $74,000 (in 2022 dollars) for those aged 25 to 44. The same study predicts that the number of such jobs for those with only a high-school diploma will decline by 600,000.
What about students who start school but never complete a degree? A study from the Urban Institute revealed that some types of colleges produce significantly lower median earnings for attendees when data include non-completers. For example, as Higher Ed Dive recently reported, median earnings at public community colleges “would decline from $40,907 to $32,694 for those [institutions] that primarily award associate degrees and from $39,021 to $30,633 at those that mostly award certificates” if non-completer outcomes were taken into account. The same is generally true at for-profit institutions that mainly award bachelor’s degrees.
So what does this mean for prospective students? Students who are able certainly can (and likely should) attend an Ivy League school based on Bloomberg’s assessment of ROI. But those who cannot get into one of those eight should aim for a school they can afford and a major that will earn an income. They should not concern themselves with “Hidden Ivies” due solely to their reputation and prestige. That prestige will likely not come with the salary students are expecting, particularly when taking into account the additional debt they will incur. And the most important factor of all? Students should make sure to finish what they started and graduate.
Grace Hall is a communications assistant at the James G. Martin Center for Academic Renewal. She works and lives in Georgia.