Is an Ivy League education worth the money ?

The debate over the long-term value of a pricey private-school education is heating up, especially in this tough economy. Sure, everyone knows that by sticker price alone, public schools are a sweet deal, with out-of-state tuition and fees that run about 30 percent less than most of their private rivals—and in-state fees running up to three-quarters less.

Indeed, the math is pretty jarring; the difference, on average, ranges between $7,700 and $18,600 a year, obviously no small matter with stock market woes depleting so many people's savings. But in the back of everybody's mind, there's that nagging question: Is the extra money worth it?

To their credit, elite private schools do boast lower student-to-faculty ratios, fat endowments and name-brand cachet that, along with their active alumni networks, have long provided entrée into the upper echelons of the working world.

But if long-term career and salary are what matters—and what else should, especially in today's economy?—then a growing chorus of private-school critics point out that the public-school scenario may actually deliver a far better bang for your buck. The SmartMoney Rankings

In a new twist on traditional college rankings, SmartMoney took a crack at quantifying the long-term value of a college education. Our goal was to spotlight the relationship between tuition costs and graduates' earning power. Working with consultant PayScale.com, which recently published a groundbreaking survey on alumni salaries, we first looked at what graduates from 50 of the most expensive four-year colleges earn in their early and midcareers. Then we factored in their up-front tuition and fees. The result? A unique "payback" ratio for each school.

In the end, our scorecard may be music to the ears of many state-school admissions deans—not to mention a lot of struggling parents. After all, who would've guessed that Texas A & M, No. 1 in our survey, would deliver a payback more than two and a half times that of Harvard? Or that the state universities of Delaware and Rhode Island would beat out every Ivy in the ranking?

Indeed, those unheralded public universities turn out to be a far better deal than virtually all the privates we surveyed. The Ivies in general? They deliver nowhere near the payback on tuition that most parents staring at a six-figure bill over four years might expect. Return on Tuition Investment

Ultimately, we weren't trying to measure the quality of education or colleges' selectivity. Other rankings take ample care of that, and dedicated students will thrive at any of these fine schools. But with boutique private colleges coming under heavy criticism for spiraling costs, our payback numbers certainly raise questions about the actual "return" on an educational investment. For parents fretting about sending their kid to the University of Washington versus, say, Columbia or Brown, they can rest easier knowing that Husky alums recoup their tuition costs, on average, twice as fast as grads from those two Ivies.

Of course, rating colleges is not an exact science, and our methods did get their share of criticism from the private-school sector. At Carleton College, a small liberal arts school in Minnesota that normally ranks very high in college surveys—but only 39th in ours—Dean of Admissions Paul Thiboutot says we underestimated their alums' average salaries by including only those who stopped at a bachelor's degree. "The real earning power is what they end up doing in professional and graduate school," he says.

Other private schools, including the Ivies, say that many of their students pay less than the full sticker price we used for tuition, because of grants and scholarships. (True, but public schools also discount their tuition, especially for in-state students.)

Then there are the schools that argue that payback surveys miss the whole point, since you should enter their hallowed halls to enrich your mind, expand your cultural IQ and improve your critical thinking. (Why else would anyone suffer through Descartes, Dostoyevsky and differential equations?) Caesar Storlazzi, Yale's director of student financial services, for one, points to his school's world-class faculty, libraries and art collections. "Put this all together and the experience is without compare," he says.

Still, critics of the elite-school path have a quick retort to all this: Show me the money. In a recent survey by the Higher Education Research Institute at the University of California, Los Angeles, 70 percent of college students said making more money after graduation was a major reason for going to school.

And it's no wonder. Along with that diploma comes an average debt of $22,000 (more than double that of 10 years ago), a financial parasite that eats away at starter paychecks, making it harder for grads to upgrade from their beater cars and ramen-noodle dinners. And in this economy, more families are hard-pressed to help support low-earning kids who've boomeranged back home—making financial independence a more compelling goal than ever.

So who gets there faster? It's probably no surprise that when it comes to paycheck size, private-school alums still outearn their public rivals. Using PayScale.com data, we found that three years out, Ivy and liberal-arts grads pull in an average of $51,500, compared with $48,500 for their state-school counterparts. And looking 15 years out, the public-private gap widens more.

But once you factor in the tuition investment, the picture changes dramatically. In our ranking, no private school even makes the top 18. Dartmouth grads, for example, report the highest average midcareer salary, but their payback ranking falls to 21st on our list after you factor in historical degree costs. (Georgia Tech's payback, by contrast, is twice as high.) Got No. 40 Swarthmore on your wish list? While its grads pull in the same early-career salary as alums from Texas A&M, the Aggies' long-term payback is three times better. University of Georgia President Michael Adams, for one, is not surprised at his school's high ranking. "We are such a bargain," he says. Shift at Public Schools

Of course, public schools reminded us that it's not just lower degree costs that explain their ranking; they're also attracting brighter students than before. Experts say that with the number of high school grads soaring (last year marked an all-time peak), state schools have been fielding more applications—and becoming increasingly selective. Many public schools we spoke with report a steady rise in their incoming students' SAT scores, GPAs and class rankings. "The competition to get into top schools has trickled down," says Alexandra Robbins, author of The Overachievers: The Secret Lives of Driven Kids. "There's no such thing as a 'safety' school anymore."

And roping in more-promising freshmen is only a start. For most students, it's the course of study they choose that determines how fat their future paychecks can be. Considering a fine arts, religion or drama major? Such liberal arts degrees are "bottom of the list, earning-wise," says Al Lee, director of quantitative analysis at PayScale. According to its research, the best dough comes in fields like engineering and business—strong programs in many of our survey's top-ranked public schools.

That's a fact that doesn't go unnoticed in corporate America, where recruiting pros say the bias toward brand-name schools is on the wane. "Often, there's a waiting list of companies trying to meet our students because they know we're a rich ground for recruitment," says Fred Wood, a vice chancellor at University of California, Davis. Indeed, according to a study published in the Harvard Business Review, nearly half the top executives at Fortune 100 companies now hail from public schools.

Whether or not they agree with our payback rankings, few private schools deny that their price tags can be daunting, especially in an era when family savings have been so hard-hit. Their financial-aid officers stay busy looking for new ways to help worthy students. In a well-publicized move, many Ivies have started rolling back costs, with Harvard, for one, offering tuition breaks for families earning under $180,000 a year.

But many public schools are staying ahead of the game—by focusing on keeping costs down instead. Elsa Murano, president of No. 1–ranked Texas A&M, bragged to us about how stringently it economizes on administrative costs. In fact, she says, it recently bucked the education-inflation trend by limiting this year's tuition hike to its lowest percentage in 10 years.

It's the kind of thinking that's getting into the heads of more parents, like Kelley Atkinson. Her son, Doug, is still in the 11th grade, but the Eldersburg, Md., mom says they've already decided to up the number of public schools he'll apply to. "There's no way of telling how much money we'll have a year or 18 months from now," she says.

Too narrow a definition of education. College is not, IMHO, the same as a trade school where you can compare cost/revenues. Hopefully a good college, Ivy league or similar, will make you an educated person with a background in literature, the arts, philosophy, etc. so you can lead a meaningful life and enjoy the fruits of your work. (Trinity (Hartford) ‘65 - English Major; Columbia ‘66 - Masters; Harvard Law ‘72 with US Army ‘66-’69 in between. I like the people I served with in the Army better than my classmates in any of the schools mentioned).

name-brand cachet that, along with their active alumni networks, have long provided entrée into the upper echelons of the working world.

Your question: How much of that is because of the education itself and how much because of contacts made in college and the families who send their kids to those schools?

Coming from a poor area in Ohio and going to Stanford, I can say the facilities and profs at OSU are just as good for the undergrads. I'm going to say, the name cache and friends you make have made Stanford worth 10-100 times the tuition they charged.

For example, Filo and Yang who started Yahoo met at Stanford, as did Hewlett and Packard, and Brin and Page of Google. While my friends at Stanford are not high profile like that, they are way above who you meet at a public school.

Further, the financial aid at the Ivies are usually much higher than at the publics.

I will say that maybe some of the second tier Ivies (Columbia, Smith, Swathmore, Brown, etc.) may not be worth it. But the upper tier of Cal tech, MIT, Stanford, Harvard, Yale, Princeton, Georgetown, Princeton definitely are.

After all, who would've guessed that Texas A & M, No. 1 in our survey, would deliver a payback more than two and a half times that of Harvard?

An expert in political fundraising told me, if you go to Texas AM, this is one of the best schools to have alumni support you. She said, graduates there are very close and fundraising is not much of a problem.

NO! Strictly in terms of education.

YES! In term of credentials and prestige.

Note: There are probably about 2 dozen or maybe more excellent public universities where you can get just as good of an education as any of the Ivy League Schools. They also cost quite a bit less. But the Ivy League Sheepskin is deemed to be more valuable to so many. So I would have to say YES the Ivy League diploma is worth it.

My advice to anyone able to get into an Ivy League college is to do it. Don’t hesitate. Yes, you will have high debt on graduation but you will make it up in spades. Just my 2 cents (which would have been 50 cents had I graduated from the Ivy League college)

I'm from Ohio. I did not know much about stanford and neither did most anyone else I knew in Ohio. I almost went to Ohio State for the same reasons you went to a state school. And I'm glad I went to Stanford.

“An Ivy League education will open doors for the rest of your life. Damn right it’s worth it.”

But it shouldn’t. Having spent time at both state and Ivy universities it is my opinion that the Ivy universities are extremely overrated. In some fields I would say that certain Ivy League Universities are significantly inferior. The other interesting thing to note is that many of the best people on the faculty at Ivy universities did not train at Ivy universities.

Let me give you a perspective from someone who had the opportunity to go to an Ivy but did not. I had very high SAT scores (I won’t boast). Thus I got offered admission into both Harvard and Yale. However, due to the fact that my father was a middle class guy with a decent income I was not offered a substantial scholarship.

I appreciate your point (that given the choice again, you would've attended the Ivy).

Your post struck me for another reason, which is the quaint idea that very high SAT scores give a student a chance of admission to Harvard and Yale.

That may have been true 20 years ago but it certainly has not been so for white or Asian guys recently.

When one of my sons was of college-application age a few years ago, I saw several of his ultra-high scoring, ultra-qualified classmates get rejected from all the Ivies and from MIT.

The Ivies offer no merit-based scholarships, either, AFAIK. (Not if you're caucasian, anyway. For URMs -"underrepresented minorities"- it might be a different story.)

My conclusion; It's not so much about the quality of the education but what other people PRECIEVE.

There is also the issue of the contacts you make. That's just as important. That's the real issue here. If you are in a business where you are your own boss then the Ivy League (or about a dozen or so other schools; Northwestern, MIT, Standford) isn't that important. But when you have to deal with others that is where it becomes valuable.

Yes, gcc is an excellent school. It’s an “old school” liberal arts college, by which I mean they teach English and history the way all good schools (including the Ivies) used to teach those subjects before trendy rot settled in.

What if you want to get into law, MBA or med school? Having that Ivy undergrad will give you a better shot of getting in. And then after med school having that pedigree will again help you matching for residency at a better place.

Sounds as bad as affirmative action.

I not sure I want a surgeon cutting on me who got into med school or a "good" residency because he has connections.

He may just be a talentless hack who's going to butcher me. How would I know?

I not sure I want a surgeon cutting on me who got into med school or a “good” residency because he has connections”

Good reasoning. Ivy medical schools and residencies aren’t necessarily exceptional clinical training programs. They can be, but it is not a given. The ranking of medical schools is based in large measure on the amount of federal grant funding that those institutions have been awarded, which is most often for basic research. These grants, and the number of scientific publications from those institutions are not good indicators of the quality of clinical medical education or clinical skill of the faculty. From a clinical perspective only some of the Ivy universities with medical programs are outstanding.

If you want to study under great academics and do research for famous scientists, Ivy League may be a good idea.

How much do undergrads see of these great academics? For getting your PhD, yes. Particularly since if an employer sees an MIT PhD, he won't even ask where you got your BS.

You are right. SAT alone wont do it, although since I had a 1600 atleast that separated out my application (sorry, not trying to boast, just telling you why my application was separated to be reviewed). I still had to do my essay and all that jazz and a personal interview.

You are right. If you are White, Asian (Chinese or Japanese or Korean) or Indian (Hindu or Sikh) good luck getting ANY kind of scholarship.

In fact if you are Asian you have the highest amount of reverse discrimination done to you in this nation (even more than Whites)

Of course, I only went to an Ivy for grad school, and they payed me to be there, so maybe I have a biased view. :-)

That doesn't count in these discussions. We're talking about PAYING for an Ivy League Education vs. PAYING for a Good Public University.

Of course if a Harvard or Yale is going to pay for your tuition, you'd by foolish not to go for it.

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