‘a college degree isn’t a generic product’

by Rhett

Gaps in Earnings Stand Out in Release of College Data

Discuss!

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294 thoughts on “‘a college degree isn’t a generic product’

  1. Here is the link to the actual data:

    https://collegescorecard.ed.gov/

    Interesting to note that the income data 10 years after graduation doesn’t line up quite like you would think. Looking at local schools:

    Babson accepts 25% of those who apply and the most popular major is business. Income 10 years post graduation? $85,500.

    Harvard $87,200

    MIT $91,600.

  2. Of course, the abilities and traits of individual students also matter a lot.  Economist Bryan Caplan has calculated percentages for the value of the college premium.

    According to Caplan … approximately 55% of the college wage premium is attributable to the college degree. The individual student is actually responsible for a significant percentage of the higher wages attributed to college graduates.

  3. The title of the post from this comment:

    In other words, a college degree isn’t a generic product, or a magic wealth-enhancer. It matters a lot what and where you study, and when you calculate return on investment, the size of the investment matters as much as the size of the return.

  4. It’s important to remember that the income data in this particular study is only for kids who borrowed money on the federal system not those who didn’t need to borrow money

  5. Interesting to me at least, although I have no connection to the schools, is that the US Merchant Marine Academy has the highest salary after attending of all 4yr schools in NY (excluding Med Schools, Nursing Schools), RPI is second and a relatively unknown state school SUNY – Maritime is third. All above Columbia, Cornell, NYU.

    I think Meme’s point is important.

  6. Meme – totally missed that. I wonder if there are percentages for how many did or didn’t borrow?

    Fred – I notice that several of the maritime academies have high salaries – anecdotally my one friend in the merchant marine does really well, but he has to be away from home most of the time.

  7. Maritime is third. All above Columbia, Cornell,

    I wonder how much of that is due to the number of Ivy League kids going into publishing, journalism, think tanks, NGOs, non-profits, academia, etc?

  8. “According to Caplan … approximately 55% of the college wage premium is attributable to the college degree. The individual student is actually responsible for a significant percentage of the higher wages attributed to college graduates.”

    This quote resonates with me. In a former job, we historically filled close to half of the entry-level positions with graduates who held degrees in one of three majors from a local university. While in theory, they had very similar college experiences at similar costs, their success rate inside our organization varied. Yes, the degree plus some decent interview skills got them the job, but some moved up quickly, some moved up slowly, and some were encouraged to move elsewhere.

    Often it was the soft skills that set people apart. Their aproach to learning on the job, their ability to get along with co-workers and customers, the quality and quantity of the work they produce, how or whether they take initiative, etc.

  9. Meme’s point is well taken about the population the data draws from. Rhett’s point I think is also key about a person’s major. It would be interesting to have that same data by major, though at some schools maybe that becomes more identifiable to individuals.

  10. L — the report does give percentages of students receiving federal loans.

    Maritime colleges probably enroll predominantly males.

  11. I don’t think it’s a very high percentage of Maritime grads going into the Merchant Marines. I think it’s just a high percentage of engineering majors.

    There are also big ROTC programs at those schools, but presumably those students would not be counted since they were on scholarship.

    It’s important to remember that the income data in this particular study is only for kids who borrowed money on the federal system not those who didn’t need to borrow money

    Although it was inadvertent, it’s probably a very good control factor for the underlying purposes of this study. It looks more specifically who will actually need to earn a real salary (to pay back their loans) and it cuts out a lot of the success by family connections.

  12. Rhett – exactly.

    That’s why, IMHO, this is fun data to look at, it’s of little practical use. And even if everything were completely comparable, available major-by-major and scaled to reflect changes in cost of living in different regions, it still wouldn’t be of much use for anyone trying to decide between schools if the major they are looking to pursue, say petroleum engineering, is a lot less in demand today than it was, say, even a few years ago. or for majors with growing demand, like computer science specializing in anti-hacking (and looking to work for e.g. Home Depot, US Ofc of Personnel Mgmt, Target).

    Again, just one guy, but my view is get your college degree and make sure it says something like “with honors”, maybe written in Latin, on your transcript. That’s actionable and will have tangible benefit if only to differentiate you from all the other liberal arts majors out there who lack that distinction.

  13. This is really interesting. I love that they linked the IRS data.

    I would really like to see 5, 10, 15, 20 year data. I went to a women’s college and while the reported income was above average, it was lower than a lot of similarly competitive schools. However, college-educated 32 year-old women are statistically in the years of tiny children, and may be working part-time, on leave with an infant, or temporarily out of the workforce.

  14. “That’s why, IMHO, this is fun data to look at, it’s of little practical use”

    I saw this tweet: You should NOT be using #CollegeScoreCard to choose a school- it’s descriptive stats based on averages–

  15. This reminds me of when I was in college and my department was promoting an obscenely high average starting salary for its grads the previous year. One of the grads happened to be a quarterback who was the first overall pick in the NFL draft so that skewed the average just a tad.

  16. That’s why, IMHO, this is fun data to look at, it’s of little practical use.

    I think it is of use. Bentley ($74,500) and Babson($85,500) are relatively unknown schools who produce mostly business majors. Some in the past have argued that that sort of education is hardly worth the bother. I think the reality is the educational path to a comfortable upper middle class lifestyle is a little less clear cut than many here have argued in the past.

  17. I still think it’s shocking that, for all the obsession on here over top-tier colleges, the median earnings 10 years after graduation of alumni who used student loans look, well, kind of middling. Not bad, of course, but certainly they’re nowhere near a level commensurate with the hype surrounding the institutions.

  18. I agree with both Rhett’s and Milo’s points, but still it’s averages. Averages of students who took out federal loans. But rich (or UMC if you insist) kids who go to elite schools are not proportionately measured, so that’s something to keep in mind.

  19. “but still it’s averages.”

    I think it’s medians, actually, which are better.

    “But rich (or UMC if you insist) kids who go to elite schools are not proportionately measured, so that’s something to keep in mind.”

    Why? How would you guess this would skew the results?

  20. Well, it is something to keep in mind, but are we assuming the Totebag kids aren’t represented by this data?

  21. How would you guess this would skew the results?

    I think if you only include earned income, I doubt the numbers would change much. Especially at a place like MIT, I would wager that a sizable percentage of kids from families that don’t need loans end up going into research and/or academia or other not particularly remunerative careers.

    In terms of the Ivy League one of the big complaints about publishing, journalism and pubic policy is the only kids who can afford to go into that are the ones who have family money. So, that would tend to weigh on the numbers not being all that different.

  22. RMS, I think Totebag kids are underrepresented in this data. Can anyone who graduated in this timeframe or had children who graduated in this timeframe comment on whether you/your child would have outstanding federal loans and show up in the data? Another point is that MD’s would be much more likely to have outstanding federal student loans than engineers, especially engineers who went to state schools.

  23. WCE – I didn’t believe that the loans still needed an outstanding balance after 10 years in order for the borrower to be included in the data. I thought it was just looking at people who had taken federal loans to attend those colleges.

    DW had some loans.

  24. I think the fact that this only includes students who took out loans will heavilly skew the data at many institutions. For example, public universities have fewer students who take out loans because they are cheaper. Students who don’t take out loans at those schools will mainly be upper middle class, so they are likely to have higher incomes even 10 years out than students from poorer backgournds. I think that this is even more true for the elite SLACs. The kind of student who doesn’t need to take out loans to attend Bard or Middlebury probably comes from a family with elite contacts, who can parlay his or her art history degree to a well paid position at Sotheby’s

  25. Far more interesting is the fact they can use this data to see which schools are attended by students who default on their loans. It is overwhelmingly students who went to for-profits, but interestingly, the second group is students who took out pretty small loans at community colleges.

  26. I did not have federal undergraduate loans, though I filed a FAFSA every year for aid purposes (I received need-based aid from the school). So, I am not sure if my data is included in these figures. My brother attended Flagship University near these dates, but was in-state and did not ever apply for aid. At the time he attended, tuition was less than $2000/year.

    I also was surprised to see stats from my local flagship university, higher average income than where I went, though the average debt was higher than my fancy-pants private schools.

  27. “students who default on their loans. It is overwhelmingly students who went to for-profits, but interestingly, the second group is students who took out pretty small loans at community colleges”

    My other thought when I read this last night was that it was a little surprising to me how eager the Obama Administration is to “shame” (NYT’s words) a lot of for-profit colleges, while they’re simultaneously arguing that we somehow need to develop a new federal program to provide free tuition to community colleges. I could see the point that community colleges are a better value, but the two efforts seem a little contradictory.

  28. Milo,

    I wasn’t under the impression that CC students ended up with anything like the crushing loans that the for-profit students ended up with.

  29. The preceding comments about who is underrepresented all are valid IMO. But on balance, wealthier kids would tend to have higher salaries. I can’t remember exact data that shows this, so I may be wrong. Wealthier kids are less likely to take out loans. How this shakes out exactly with elites vs. publics is unclear, and many details could be lost because of consolidating so much data into averages and medians.

    “I bet the data includes anyone who filled out the FAFSA. ”

    Why would you think that? I didn’t see anything that indicated that.

  30. Looking at two Texas public LARGE Universities have the income within $100 of each other. The cost of school A is $5000 per year less than school B. The A with the higher income and lower student loan rate (% of students with loans and amount of loans) shows their students in Business (17%), Engineering (14%), Agriculture (11%). The B with the slightly lower income and higher student loan rate shows their students in Business (18%), Journalism (11%), Social Sciences (11%) and Engineering (11%).

    I think when you look at the top majors at these schools it tells you more about the picture.

  31. Why would you think that?

    Wouldn’t it make the most sense to use the broadest set of data to which you had access?

  32. “students who default on their loans. It is overwhelmingly students who went to for-profits, but interestingly, the second group is students who took out pretty small loans at community colleges”

    Both these types of schools tend to include proportionately more students who are poor and less likely to graduate, so that’s not surprising.

  33. “I bet the data includes anyone who filled out the FAFSA. But, I could be wrong.”

    No experience here, but if all they have is a FAFSA form, would they even know where you attended school?

    Also, re-reading the intro to the article, I’m wondering if they’re just looking at people who *attended* the schools, but did not necessarily graduate. If so, that makes the elites look even less impressive, by comparison, since they have much higher graduation rates, their numbers aren’t being dragged lower by the dropouts.

  34. I am trying to find the article that discussed the default rates. I saw it two days ago. But basically, the for-profit problem by far dwarfed all other sources of defaults. It isn’t even close. The reason they mentioned the community college problem is because the stereotype is that lots of students who take out big loans to go to 4 year private schools default. But it turned out not to be the case. The second biggest group was students who had gone to CC, and taken out small loans.

    But the for profits were really the big gorilla.

  35. I’m wondering if they’re just looking at people who *attended* the schools, but did not necessarily graduate.

    Since the site prominently displays the graduation rate I’d have to say yes.

  36. “Wouldn’t it make the most sense to use the broadest set of data to which you had access?”

    I’m not following you. I thought it was explicitly stated that they only included students who took out federal loans.

  37. I thought it was explicitly stated that they only included students who took out federal loans.

    I didn’t see that. I saw, “the federal government matched data from the federal student financial aid system to federal tax returns.” That would include the FAFSA I would think.

  38. “Since the site prominently displays the graduation rate I’d have to say yes.”

    That makes sense. I thought some of the salaries from the ITTs and the like were VERY low, and I think that explains why. Those schools are being unfairly penalized in these rankings.

  39. I’m not sure the schools are being unfairly penalized. I think schools should have to do a better job of communicating how many people DON’T succeed who attempt a given field of study. This data might be a good start to that. If I were in charge of it, I’d include 25th and 75th percentile ACT and SAT scores for people who graduate in each major, not just the scores of either entering students or graduates from the school.

  40. “I think schools should have to do a better job of communicating how many people DON’T succeed who attempt a given field of study.”

    Sure, but the earnings of the people who didn’t succeed are not relevant in evaluating the increased earning potential of a degree from that school.

  41. “No experience here, but if all they have is a FAFSA form, would they even know where you attended school?”

    Milo – to answer your question… yes, the gov’t would know where you attend school through your FAFSA. The form requires your school’s code so that if you accept money through FAFSA, the money is sent directly to the school and attributed to your account.

  42. Milo,

    But, if you’re looking at two schools with similar SAT ACT scores, demographics etc. and one school is better at graduating kids on time and in their desired major – that’s a valid metric that schools should be judged on.

  43. Rhode – But could someone fill out the form and not ultimately attend that school, maybe if she was only trying to see how much aid would be available?

    Rhett – Agreed. However, that data should be separated.

  44. “Sure, but the earnings of the people who didn’t succeed are not relevant in evaluating the increased earning potential of a degree from that school.”

    I think if a school has a lot of students who are not succeeding, it is relevant in evaluating a program. It means they are admitting students who don’t have much chance, and that they do not have the educational supports needed for those students. They either need to admit fewer students, or restructure their program to ensure that students can finish, WITH the knowledge needed to get a job. And yes, that is a tall order. A lot of schools are failing at this, but some are more miserable than others.

  45. It actually includes only students who’ve received federal loans and grants.

    Most significantly, the government’s new earnings data reflect only the achievements of students who received federal financial aid, which several experts said would significantly skew the data and either understate — or, in some cases, possibly overstate — the actual median earnings of a college’s former students.

    https://www.insidehighered.com/news/2015/09/14/obama-administration-publishes-new-college-earnings-loan-repayment-data?utm_source=Inside+Higher+Ed&utm_campaign=ec84d1f219-DNU20150914&utm_medium=email&utm_term=0_1fcbc04421-ec84d1f219-197794585

  46. CofC,

    That seems to disagree with with what the NYTimes was reporting. I think we need some more clarification.

  47. The writer for Inside Higher Ed:

    Michael Stratford, Reporter, covers federal policy for Inside Higher Ed. He joined the publication in August 2013 after a stint covering the Arkansas state legislature for The Associated Press. He previously worked and interned at Kiplinger’s Personal Finance magazine and The Chronicle of Higher Education. At The Chronicle, he wrote about federal policy and covered higher education issues in the 2012 elections. Michael grew up in Belmont, Mass. and graduated from Cornell University, where he was managing editor of The Cornell Daily Sun.

    Belmont (affluent Boston suburb once home to the Romney’s) and Cornell and if he makes more than $60k, I’d be surprised.

  48. “I still think it’s shocking that, for all the obsession on here over top-tier colleges, the median earnings 10 years after graduation of alumni who used student loans look, well, kind of middling.”

    I’m wondering if the sample size is large enough to draw meaningful conclusions for the top-tier colleges.

    Whether the data are limited to students who borrowed money is a key question in this regard. While this may not have been the case in 2001 and 2002, the top-tier schools have recently been much better than most other schools in meeting the full financial need of their students without loans.

  49. “the gov’t would know where you attend school through your FAFSA. The form requires your school’s code so that if you accept money through FAFSA, the money is sent directly to the school and attributed to your account.”

    I have not filled out a FAFSA yet– that is on my todo list– but my understanding is that you are supposed to indicate on it all the colleges at which you are applying for financial aid, so it’s not clear to me how the fedgov would be able to determine from the FAFSA which of those schools you attended.

    There’s been a recent controversy about the release to the schools of the order in which students list the schools, with some schools apparently drawing conclusions, from that order, on students’ preferences, and tailoring their aid offerings based on those conclusions. The advice I’ve read is to list schools alphabetically, and not in order of preference.

  50. meeting the full financial need of their students without loans.

    I guess it hinges on if they included the FAFSA as don’t you need to fill out the FAFSA to find out if your need will be met entirely by grants at Harvard, Stanford etc?

  51. In the Higher Ed article:

    The new data also show, according to the White House, that at 53 percent of all institutions of higher education, fewer than half of former students are earning more than the typical high school graduate.

    Wow.

  52. Interesting website and insight… I wonder about the metric of 10 years out. If a person does a PhD, taking the average of 7 years, and then takes the average of about 5 years of post-doc work, that person is making ~$45-50k at 12 years out. But on year 13 or 14, could be making towards $65-75K (or more, if leaving academia). And then another bump at year ~20 for tenure. I’d like to see them do this for 5, 10, 20, 30 years out. Just to see how things change. I think CoC mentioned this before.

    I am included in these data (took out loans for college, and within the years they pulled data). For my case, at 10 years post-graduation, I made 78% of the average for my school. However, at year 11, I made 153% of the average. All because of when I graduated with the PhD and started the current job.

    For comparison, DH is not included in these data (never took loans out or filed FAFSA, but within the years they pulled data). At 10 years post-graduation, he made the average for his school. He’s ~ 15% above the average at 12 years out. He attended a Flagship U in a state with a low COL.

    I have another thought… I wonder if they could control these data for location 10 years after graduation. It might give a better idea of the bang for the buck. So if you attend a cheap school in a cheap COLA (also assuming you need small or no loans), but have a major that brings you to a high-paying, high COLA, your return on investment is larger than someone who stayed in that cheap COLA. This leads into breaking out things by major as well. Would be another interesting view…

  53. so it’s not clear to me how the fedgov would be able to determine from the FAFSA which of those schools you attended.

    Your don’t think schools have to report back which school you actually attended for auditing purposes?

  54. I opened the data for a nursing school that is located near my home. The average salary is higher than most of the top 30 schools, but the data is for 79 students. They are all going to be nurses, and nurses are in demand in NY metro so it makes sense that their salaries are going to be higher.
    The problem is that the nurses may level out, and my friends from law/medical/business/engineering might reach their peak earning years in the mid 30s – 40s. this study just looks at the first ten years, and I have many doctor friends that didn’t earn much at all during their first ten years after college graduation.

    This article and this study are flawed. There are too many women out of the work force from some of these elite schools to really know if the income gap is related to average income, OR includes the 0 income from some women that took time away from the work force when their children were very young.

  55. Lauren,

    It wouldn’t be that hard to pull in household income to find out what schools provide the most lucrative MRS degree.

  56. Sigh. What this really illustrates is that you can’t treat a single institution as a single monolithic entity, unless perhaps you are looking at a small school with one or two majors (Midred’s Academy O’ Beauty). If we are going to be all career and earnings focused, then you have to look at an institution program by program. A given university may have a stellar nursing program that is placing 100% of its graduates in the best and most prestigious hospitals and at the same time have an abysmal finance program in which half the grads end up at Starbucks.

  57. Rhett, I didn’t realize until I got involved int he middle school, and I hit middle age that so many women actually do go back to work. The MRS degree is a factor, but I’ve noticed that a lot of women don’t stay home forever. This particular study wouldn’t capture the earnings of women that re enter the work force.

  58. “Certainly something to consider.”

    Yeah, I agree. There’s got to be a time variable when considering earnings.

  59. Milo and Finn – re: FAFSA

    Ya, I don’t know the answer to Milo’s question. In year 1, I think that Milo’s concern is valid. However, assuming the student doesn’t transfer, years 2-4 should indicate the school of enrollment. So, it’s possible that the data crunchers used years 3-4 to generate their links between FAFSA and the IRS.

    As a quick play, I looked up the 4 schools I remember really liking and potentially applied to, including my alma mater. All schools were small/medium sized, mix of private and state non-profit. The tuition ranged from $14K-$30K, with an average of $23K. The average salaries are: $40,400; $40,800; $55,500; $46,800 (average $45,900). Graduation rates ranged from 59-68% with an average of 64%. Interestingly, the school costing $14K yields the salary of $55,500 and 68% graduation. However, at the time I would have attended, the tuition would have been higher. That school was absorbed by a State Flagship. The conclusion to my little project is that average starting salaries varied by $15k, which is pretty significant in long-term earnings. The average salary is a middle class salary and is roughly double the tuition costs. In theory, the degrees should be affordable and lead to a somewhat decent standard of living (again, not Totebag standards).

  60. @Lauren – I am curious. Did these women work for a while after marriage and drop out when the juggle got to be too much ? In my area, there seems to be a clear line between women who work and women who stay home. If you decide to drop out of the workforce it means you don’t intend to go back later.

  61. Several of my kids best teachers have been women who went back to work later in life. I remember my DS2’s awesome first grade teacher had been in marketing before she quit to raise kids. She did one of those fast track teaching programs to get back in. I also know a number of women in our university administration who did this sort of thing.

  62. Okay, another NYT article reiterates that this data only includes beneficiaries of federal financial aid. Is that enough to convince doubters?

    The data is based on students who have received a federal loan or grant to attend college, but officials said their economists believe it is representative of all students.

    http://www.nytimes.com/2015/09/13/us/with-website-to-research-colleges-obama-abandons-ranking-system.html?hp&action=click&pgtype=Homepage&module=first-column-region&region=top-news&WT.nav=top-news

  63. but officials said their economists believe it is representative of all students.

    You’re saying they are wrong?

  64. “What this really illustrates is that you can’t treat a single institution as a single monolithic entity”

    The data is good to have, and apparently more is forthcoming. It is useful, but I find it hard to draw hard and fast conclusions from it, except that despite the conventional wisdom perpetuated by those who have a vested interest in growing the rates of college attendance, college does not make sense for everyone.

  65. “Graduation rates ranged from 59-68% with an average of 64%.”

    Here’s my point from earlier about schools being unfairly penalized for their dropouts… Only 60% of the entire entering class will graduate from this school. Maybe the school is to blame, to a degree, and maybe the students are to blame, or some combination thereof.

    However, if you’re looking at salaries (and assuming, roughly, that the 40% who drop out correlate highly with the bottom 40% of earners), you’re actually looking at the bottom 10% of actual graduates. On the other hand, the $80k or $90k from Harvard, with a 97% graduation rate, represents something much closer to the 50th percentile of alumni.

    But it’s even worse for Rhode’s school in this example, since it’s only looking at those who borrowed money, if you can assume that students who borrow money are more likely to drop out. In this case, the actual midpoint of salaries that they capture may not even be a salary from an actual graduate.

  66. “You’re saying they are wrong?”

    Oh right, I always believe everything government officials say. :D

  67. I’m fairly sure I’m in that data set. Pulling the averages down…. Kids, part time work, etc. I was going to make Rhode’s point, that you fill out a FAFSA for every year that you attend school. For most people where the money gets sent isn’t a secret from the government, and the money goes into your account from your school, not the federal government directly. At a minimum they should know where you are enrolled at the time you are receiving the actual aid check.

  68. I think that looking at this information gives you some things to think about and maybe ask when you are visiting schools. If it is also about 45% about the person, then it seems that finding the degree program and school that fits where you want to go may have more to do with the ultimate outcome than the school’s overall ratings.

    Failing kids out/dropping out is not all bad. Many kids are not ready to commit to the rigors of college, but go anyway because it is what they should do. Others are start out in majors that they realize aren’t suited for and may change schools to find a better fit. These types of issues are outside the school’s control.

    I have a close friend who has been going through health issues. She ultimately asked her oldest to leave school and come home and help care for her younger siblings for a year. The daughter did not return to her original school for a variety of reasons, but graduated from the second one. She is likely captured in both schools data sets.

  69. CofC,

    I pulled up the technical paper and you are correct.

    Most of the new metrics of institutional performance described in this report—those based on data in the NSLDS, or matched earnings data for students appearing therein—are based on undergraduate students receiving federal aid.

    https://collegescorecard.ed.gov/data/

    On a side note – this is interesting:

    About 70 percent of all graduating postsecondary students receive federal Pell grants and/or federal loans.

  70. Louise – in my experience, there’s a number of women who quit a too-demanding job when they have small children and then return to something with more flexibility a short time later. I have a b-school friend who just did this (her youngest is starting preschool, and she just accepted a corporate finance position at a local company – certainly a Totebag-level job, but with the ability to WFH and some scheduling flexibility – a far cry from the I-banking hours she was pulling pre-kids).

    So in this case, the salary measurement could go from $0 at age ~32 to >$100k in a few short years.

  71. “Many kids are not ready to commit to the rigors of college, but go anyway because it is what they should do.”

    If I only had perfect foresight…

  72. I’m not terribly surprised by the 70% number, Rhett. It felt like just about everyone I knew as an undergrad was receiving federal loan money. Much of the merit based aid didn’t even come close. People who could pay out of pocket entirely were not in abundance and were quiet about it. Those conversations about who is middle class and who is rich? It shows up here. I’m thinking of COURSE most of the graduates are getting federal aid. Really different perspective than some, it seems?

  73. I graduated at roughly the time of this study from an Ivy, and 10 years out I was making about 3 times my school’s average. By 12 years out, I was a SAHM and earning nothing.

    When I was in college, only about 40% of students took federal loans at my Ivy, and everyone else paid in full.

    In my corner of Totebagland there seem to be three categories of SAHMs: those that weren’t earning enough to justify the cost of childcare (preschool teacher, admin assistants), those who are taking a break of 3-5 years from their careers to be home (teachers, psychologists, me), and people who hated their prior work so much they are never going back but haven’t decided what’s next (mostly lawyers). I haven’t met anyone who does not plan to return to work yet…but mybe they aren’t talking :)

  74. I see those stats about kids who aren’t ready, and I get it, but I don’t know how you’re supposed to know. When you’re $15K in debt and all you can get is a $10-$15/hour job if you quit school for a year, plus your loan payments become due, it is a lot harder to contemplate dropping out. If you’re living off aid money, and you don’t have family financial help to go home to, suddenly you have to pay rent if you take time off. Some will always drop out, but someone with follow through and fear might well just continue to muddle through thinking the goal at the end is better than what waits if they take time off.

  75. Milo – not sure if your analysis should make me feel better or worse about my school choice…. :)

    On the one hand – I’m a loan receiver who graduated (go me!) and paid them back (shocker, I know). One the other hand – my major is not hugely profitable, and it took me 11 years to receive a higher middle class salary (which is still not considered UMC).

    I think I may go shrink back to the background now… :)

  76. I believe that 90% of the undergrads at my university get some form of federal financial aid.

  77. Rhode– I think you take it as an accomplishment, which it is. DH and I paid off our private loans from law school very aggressively, and those are long gone. We consolidated our federal loans at 2%-ish on a 30-year repayment plan (I always forget the exactly %) and so we are still carrying those. At this point in our lives it has made more sense to put extra money into our house, retirement funds, savings for the kids’ college, etc., than to worry about those loans at that rate. So in my book, paying them off is something to be proud of.

  78. Rhode, I feel like a loser because I’m 20 years out but only making 5% more than grads of my school who are just 10 years out. I hope it’s because most of them moved to high-COL places (a huge % ends up in the DC area) where the salaries are just bigger!

  79. “I presume that Harvard and Stanford are using the FAFSA to decide what your need is”

    My understanding is that those schools use the FAFSA to determine eligibility for federal aid. They use a customized version of the CAA to make their own determination of need. I believe they first tap available federal grants, then their own resources, in providing grants to meet full financial need.

    We had a poster a couple of years ago who went through this, and mentioned that some schools that use the CAA will look at things like home equity, retirement accounts, and what kind of cars you have.

  80. “my friends from law/medical/business/engineering might reach their peak earning years in the mid 30s – 40s.”

    I would think that peak earning years for many would be later than that, especially in dollars not adjusted for inflation.

  81. “I was going to make Rhode’s point, that you fill out a FAFSA for every year that you attend school.”

    What if you apply before matriculation and find you don’t qualify for any federal aid, and have no plans to take a work-study job? What would the purpose of filling out the FAFSA be for those folks?

  82. When I mentioned those that aren’t ready, I was thinking about those who are so unprepared – academically and/or emotionally – that it isn’t so much a choice about quitting as they are failing out of their programs. Those are a different group than those who are not ready but they can make it through, but not with stellar grades or not without taking remedial courses that increase their costs/loan amounts.

    We have a range of what “not the full time work force” means. It includes those who do not make more than the cost of child care, so staying home is a financial decision; those who have reduced to part-time or to a less demanding job, but are working for someone else; and those who run their own business and control the amount of work and hours – bakers are trendy now, sellers of products like Mary Kay or Thirty-One, etc., or some other creative niche. We also have several whose underlying religious beliefs are that she is the care taker of the home and family at least until the last one is out of high school. More of this category will never enter/reenter the workforce, but some will.

  83. OK. Now I am home and can comment with some numbers.

    The base population for this study is undergrads who received federal student loans or Pell Grants and possibly Fed Work Study. I have read that the year tested was 2000-2001, but I don’t have confirmation of that from multiple sources. The government is not tracking people who filled out a FAFSA but never received a dime from the federal government. The “ten years out” is ten years after first enrolling in the school whether the kid graduated or not and whether or not the loans are repaid. So the grad school/fellowship stay at home mom income could apply to a student as young as 28 with no particular upper bound on age. It sounds like they are using W-2 data, not tax return data, which would also eliminate a lot of ways that recent grads earn money. The number is median income, not average.

    Part 2 to follow.

  84. What would the purpose of filling out the FAFSA be for those folks?

    Things change? A sibling starts school, dad doesn’t make his bonus, etc?

  85. “I hope it’s because most of them moved to high-COL places (a huge % ends up in the DC area) where the salaries are just bigger!”

    SWVA – yes! I think this is an important, but forgotten, component… where the salary maker lives. If one goes to a low COL school, with matching tuition, but moves to a high COL area with matching salary, then they could be artificially inflating the average. PS – I don’t think you’re a loser because of salary. You can afford a house, keep a roof over your head and food on the table.

    ” What would the purpose of filling out the FAFSA be for those folks?”
    Finn – some schools I know use FAFSA for need-based aid as well as loans. So, if you apply for aid, you have to fill out FAFSA. At the same time, it’s teaching the student an exercise in futility, which is hallmark of how things work…

  86. “The “ten years out” is ten years after first enrolling in the school whether the kid graduated or not and whether or not the loans are repaid.”

    Ten years after first enrolling, a lot of people who will become high earners may still be in grad school (e.g., prospective MDs), or just out of grad school.

    Clearly, there are limits to the value of these data, but following these same people over the next 10 to 20 years would be quite interesting.

  87. In 2000-2001 I DD2 (no fed financial aid – all private) and DS2 – Stafford. DD1 graduated in 2000 -Stafford and mom had Plus. DS1 started in 1992 (Perkins, Stafford – all paid off by 2000, mom had a MA state loan) , but returned to finish the degree in 2001-2002 (more Stafford).

    I will compare my two California students. One went to leading private, one to a mid tier public university. Both had Stafford loans. 4 years apart in age. Both majored in a hard science. Both campuses have close to 100% full time undergrad populations.

    Private college – 16% of all students had Pell Grants (family income less than 40K). 13% of all students had federal loans (possible overlap). average fed loan debt 12K. 10 year median salary for fed aid recipients 80K. Graduation rate within 6 years – 95%. Median SAT 1500 (2 part) Yearly net cost to aid recipients 15K.

    UCal campus – 45% of all students had Pell Grants. 56% of all had fed loans (obviously some overlap). Average fed loan debt 19K. 10 year median salary for fed aid recipients 45K. Graduation rate within 6 years – 74%. Median SAT 1100 (2 part). Yearly net cost to aid recipients 15K.

    The point of the detailed information (and there is quite a bit more available) is to help students who might need some idea of whether they are likely to be able to pay off the loans, and how much is a normal amount to borrow.

  88. “Things change? A sibling starts school, dad doesn’t make his bonus, etc?”

    I was thinking of kids for who weren’t close to getting aid before matriculation, and for whom not much changed over the next few years.

    But I think Rhode provided the correct answer: ” it’s teaching the student an exercise in futility, which is hallmark of how things work.”

  89. I was thinking of kids for who weren’t close to getting aid before matriculation, and for whom not much changed over the next few years.

    With 70% getting some federal aid and including those on the margins, the number of families being certain of not getting aid is going to be fairly small.

  90. WCE, Mémé’s 2:25 post makes a point I’ve been trying to make to you in the past. Note how the yearly net cost for the high-end private is no higher than that of the UC, with lower debt. Don’t rule out the high-end privates for your kids due to an assumption that they will not be affordable.

    I will take issue with Mémé’s apparent characterization of a UCal campus (I assume that is what is more commonly referred to as a UC) as being a mid-tier public university. My perception is that the UCs are generally considered to be among the top tier of public universities.

  91. Rhett – We filled out a FAFSA when DD2 applied out of senior year high school. She didn’t need any fed aid because she got an academic award from the college and we were not required to keep filling it out, so we stopped for her. And most colleges require the FAFSA for their own financial aid, event if you don’t take anything from the govt

  92. Finn – what i meant is that his campus is ranked about 7th of the UC campuses. mid tier CA is all I meant. It is equivalent to state flagship in my state.

  93. Mémé, thanks for clarifying. My perception is that all the UCs are considered to be among the top tier of public universities, and competition for entrance to all of them is quite fierce, especially for CA residents.

  94. Finn– This data measures kids who *are* receiving aid. So every college student won’t fill out a FAFSA every year, but every student receiving federal aid will fill out a FAFSA every year. (Unless for some reason they lose eligibility, I suppose. But even then, to Rhode’s point, I suspect people who received federal aid once would continue to reapply to see if they qualified in the future.)

  95. Meme – why the UC campus ? Wasn’t it out of state for the student, therefore costing more ? Maybe I am missing something about that particular choice of college.

  96. Finn, Meme was a 40ish single mom when DD got that aid from a private college, with no inheritance assets. Different situation.

  97. To Milo’s point.

    Chico State $45,100. UCLA $59,100 and UC Berkeley $62,100. One would expect the gap to be bigger.

  98. Finn’s point and Meme at 2:25 – This is a discussion I have had with my DD#1, now a HS sophomore, but getting lots of mail from colleges due to taking the PSAT as a freshman. Do not limit what schools you are looking at because the “published” tuition rates are far from the entire story. The “real cost” has to be balanced out against what your likely earnings are and your ability to pay any loans off.

    The other issue this doesn’t seem to capture as well is the “other costs” fees, books, housing, transportation, etc. that location of the school can affect dramatically.

  99. Finn – This is from Harvard. Note the very last sentence:

    •20% of our parents have total incomes less than $65,000 and are not expected to contribute.
    •Families with incomes between $65,000 and $150,000 will contribute from 0-10% of their income, and those with incomes above $150,000 will be asked to pay proportionately more than 10%, based on their individual circumstances. Families at all income levels who have significant assets will continue to pay more than those in less fortunate circumstances.

  100. “One would expect the gap to be bigger.”

    And how. All those years of developing passion, prepping for the PSATs, wringing hands over the benefits of AP Calc BC vs AP Calc AB. What a waste.

  101. The other factor that doesn’t have a price tag is the “goodwill” value of the alums and fellow students that you might meet at Berkeley vs. Chico State. One of my closest friends went to Berkeley, and he is an architect. Many of his early jobs were in firms that were owned/managed by Berkeley alums. He believes that the value of the professors, and other contacts he made in his field were worth every penny of out of state tuition at Berkeley. He owns his firm now, there continues to be continued goodwill when he pitches for new business because there is a perception with a Berkeley grad vs Chico State etc.

  102. “The other factor that doesn’t have a price tag is the “goodwill” value of the alums and fellow students that you might meet at Berkeley”

    It seems like you can put a price tag on it. The goodwill is worth $3k more per year than UCLA.

  103. He owns his firm now, there continues to be continued goodwill when he pitches for new business because there is a perception with a Berkeley grad vs Chico State etc.

    While true, you’d expect the value to be higher.

  104. Rhett and Milo, There is also the shame attached with not being able to go anywhere but Chico State…..

  105. All Chico State bashing aside, the cost of living differences between the Chico State and the Berkeley grads would be very interesting….

  106. Not being from California, I don’t know one way or another about Chico State. Its salary numbers were considerably lower, but UCLA vs Berkeley were pretty close.

  107. “Meme was a 40ish single mom when DD got that aid from a private college, with no inheritance assets. Different situation.”

    Mémé, could you please clarify what you meant when you indicated “Yearly net cost to aid recipients” in your 2:25 post? I took that to mean it was an average or median cost for all aid recipients, but apparently WCE read it to refer to the net cost for your kids.

    Austin, besides being envious of your DD being able to take the PSAT as a freshman, I agree with your approach. I’m telling DS to look for the colleges that he thinks are a best match for him, regardless of the sticker price. We’ll take a look at the real price later in the selection process.

  108. Milo,

    Berkeley is in the Bay Area, UCLA is in, well, Los Angeles. Chico is in rural Northern California. The Bay Area and LA have very high cost of living. Chico is relatively affordable. RMS has often mentioned she would like to live in the Bay Area, but probably can’t afford it. Chico is actually a nice little town, but nothing like an urban metropolitian area, and has a significantly lower cost of living.

    Aside from the fact that Berkeley and UCLA are world class universities that are extremely difficult to get into, and Chico is not. One might infer that there would be different lifestyle preferences between people who chose to live in Berkeley versus those who would live in Chico.

    As someone mentioned upthread, it would be really interesting to see income relative to cost of living.

  109. Finn said “I’m telling DS to look for the colleges that he thinks are a best match for him, regardless of the sticker price. We’ll take a look at the real price later in the selection process.”

    I think if the family income is below say 150,000K (not exactly sure where the cutoff for financial aid lies these days), then this is a great approach. I agree that for families likely to qualify for aid, private schools may be a better bet.
    For families with incomes above that, I think it is better for kids to take finances into account from the get-go. This will vary depending on family savings, assets, actual income, etc. For a family who is making 150K, and who has saved say 4 years of public university costs, finances absolutely has to be part of the consideration.

  110. Rhett – Just glancing through a several hundred mile radius, there’s Johns Hopkins at $69k, Cornell at $70k, Princeton at $75k, and little old University of Maryland – Baltimore at $80k.

  111. COL is very relevant. When I noodled around the site this weekend, the thing that really struck me is that the average earnings for the NYC area schools seems quite low. I wasn’t looking at NYU or Columbia, but the more regional ones, the ones whose grads tend to stick in the area. They all had average earnings that were above the national average but would be very hard to live on in NYC.

  112. They all had average earnings that were above the national average but would be very hard to live on in NYC.

    What’s the median household income for the NY metro area? $59,799. Half are making do on less.

  113. “What do you think explains it?”

    Hmm, well, I guess because it doesn’t have [any?] undergrads? So not all that surprising.

    The University of Maryland, Baltimore, the founding institution of Maryland’s public university system, is home to nationally ranked programs in law, dentistry, medicine, nursing, pharmacy, and social work.

    You know, the “trades.”

  114. “not exactly sure where the cutoff for financial aid lies these days”

    I don’t believe there is a single number. Different colleges have different cutoffs. As Milo points out, at Harvard the cutoff is well into 6 figures.

    “For families with incomes above that, I think it is better for kids to take finances into account from the get-go”

    We’re not ignoring finances, but I don’t want DS to eliminate any schools based on sticker price.

    After he’s put together his initial list,ignoring sticker price, we’ll take the time to use the calculators to estimate real price, and use that as a factor in cutting down the list.

    ” For a family who is making 150K, and who has saved say 4 years of public university costs, finances absolutely has to be part of the consideration.”

    ITA.

  115. “little old University of Maryland – Baltimore at $80k.”

    Based on only 738 undergraduates, probably not a good example.

  116. “What’s the median household income for the NY metro area? $59,799. Half are making do on less.”

    That includes a good number of retirees who own their residences outright, or people in rent-controlled or subsidized apartments, maybe.

  117. Milo,

    Bigger picture, why is the gap far narrower than we thought?

    The only thing that makes sense to me is that a lot of kids from elite schools are going on to prestigious jobs that don’t pay a lot 10 years out – if ever.

  118. That includes a good number of retirees who own their residences outright, or people in rent-controlled or subsidized apartments, maybe.

    Sure, but still. I think Mooshi’s totebag privilege is showing.

  119. LIU Brooklyn, 46,000. Baruch, 54,000. Hofstra, 53,000. Yeshiva, 55,000. NY Inst of Technology, 49,400. Fordham, 55,000. NYU, 58,800. City College, 44,000.
    and so on. Columbia did clock in at 72,000 but they are a special case.

  120. Finn, the teen profiled in the example you posted is scary. Do any of us actually have kids like that? One friggin B+???

  121. “Bigger picture, why is the gap far narrower than we thought?

    The only thing that makes sense to me is that a lot of kids from elite schools are going on to prestigious jobs that don’t pay a lot 10 years out – if ever.”

    That’s probably a big part of it. And I also just think that a big name school doesn’t matter nearly as much as some people want to believe.

    Also, the thing about the relatively low variation in salaries, even when one would expect that the grads are living in high-COL areas, is something that I’ve been saying on here for years, but people always respond “No, no, you earn much less when you move away from the Northeast.”

    Apparently, you don’t.

  122. Mooshi,

    Is that teen really that unusual? If she is, I am so going to relax about my kids’ chances.

  123. Finn – It seems that if she can get into Harvard or Yale, then go there for the $18k. It’s the next tier down in the private range (Vanderbilt, etc.) that still want an arm and a leg. That doesn’t seem to really match the author’s conclusion that the lower privates are throwing money to attract bright kids and raise their stats.

  124. One piece of anecdata: my very best friend from high school has a bachelor’s degree in business from Chico. He probably could have gotten into other (better) places but he’s always taken Rhett’s approach to life (required erg/dollar). He lives a couple of towns over from where we grew up, kinda near BAM. 4 grown kids, SAHW for the 30+ years they have been married. FWIW, their 3,600 sq ft house (built into the side of a hill, no real playable yard, is worth only $1.6M per Zillow.
    He does just fine as the majority owner/president of a small niche manufacturing company. Started there right out of undergrad as a sales guy; when the owner died 9 yrs later, the owner’s widow tapped my friend to run it; his comp has included an incremental 3% of the company every year; by the time he reaches 65, assuming he’s still there, he’ll own 100%.
    He would not have liked Cal or UCLA.

  125. Anyway, I just ran Harvard’s net price calculator using today’s numbers, and it said, tough luck, you pay full fare.

  126. I better start panicking about mine. My oldest already has 2 B’s in the 9th grade. He will make the test scores, I am pretty sure, but has never won a prize in anything. Sigh.

  127. Milo, the point I am trying to make is that if you are going to be paying full fare, it is only right to discuss finances with your kid from the get go. It isn’t squelching dreams, it is being realistic. Even my family did that. They were always upfront that they could only afford to pay for the local university with me living at home. If I wanted anything else, they said, I would have to figure it out. And I did.

  128. “it is only right to discuss finances with your kid from the get go”

    Mooshi, we’re in absolute agreement on that. I’m not paying $65k a year for college.

  129. Milo, that’s exactly what I concluded (about the girl whose mom listed all the net prices, not about tough luck, you pay full fare).

    The part about paying full fare may be suitable for its own post one day.

  130. Finn – Playing with the Harvard calc a bit. As you alluded to above, the jump seems to be around the $150k mark. I get the feeling that, on one hand, this is a seemingly arbitrary level to really start putting the screws to families; on the other hand, it probably correlates very nicely with the incomes of those who are charged with setting this policy, and just like in any discussion about what is rich or who should pay more in taxes, the answer, once again, is all those greedy and materialistic bastards who earn 15% more than I do.

  131. Milo,

    If your kid got into Stanford or Harvard and really really wanted to go you won’t give him the $25k/year you saved up for UVA, cash flow $2k/month and let him borrow the remaining $16k? It would be worth it just to have the sticker on the back of the Odyssey.

  132. Louise – my son wanted to major in Marine Bio. DS1 had an inferior experience at state flagship so that was not on the dice. No kid wanted to be within 500 miles of home, anyway. We just looked around. It was cheaper than a private and they gave him some money because he had good SATs, if only average grades from an urban high school. He was also the caboose, DD2 was the only other one in school on a big scholarship and I was making a good income (still tons of debt to discharge, tho) by then – money wasn’t as tight. so that was not on the dice. No kid wanted to be within 500 miles of home, anyway. We just looked around. It was cheaper than a private and they gave him some money because he had very good SATs, if only B plus grades from a low ranked urban high school (a very late bloomer). He was also the family caboose, DD2 was the only other one in school on a big scholarship and I was making a good income (still tons of debt to discharge, tho) by then – money wasn’t as tight.

    Finn – the numbers I posted for net cost for the two CA colleges were median net cost for students getting federal financial aid – not my numbers but from the website. The UC cost is in-state; we paid more, as Louise pointed out. Only 15-25% (depending on the overlap of categories) of students at private get federal aid. And as WCE points out, when DD1 got need based aid from the private college, I had two in college at once plus another two at home, renter, 5 year car loan, negative net worth, and a regular middle class not UMC income. And they tried to cut the aid after the initial recruitment year, I had to write embarrassing begging letters each year explaining about her father’s peculiarities.

  133. Talking about cash flow this and borrow that just onfuscates the fact that there is a $160,000 difference between the two options. So no, I would rather just buy them their first condo.

    Furthermore, we are not the type of parents who are pushing every possible extracurricular activity for a hook. Right now my older two are doing one activity a week, plus scouts. In other words, the debate about Harvard for a white family like ours is probably moot.

  134. “If your kid got into Stanford or Harvard and really really wanted to go”

    I was thinking of turning this into a post for another day– would you rather do that, or just dive into it now?

  135. In some cases a smart but nerdy kid may “need” a degree from an elite college to earn the same salary that another more savvy but non-academic type of kid can earn from the cheaper school. If I know my kid is not a good sales person, but he has a passion (yes, I hate using that word) for academic learning, then I might decide a selective school is a good choice for him. Then he’ll be able to use his elite degree and connections to make a comfortable income, albeit lower than the business major who parlayed his people skills into an UMC lifestyle. And along the line the nerdy kid can develop better skills and/or stumble into a more lucrative position from following a path that could only have originated with the elite college degree. Does that make sense?

  136. Finn – my vote is to do it now; it’s a natural tangent to the topic. Also, it’s not like you could never write a twist on the same topic again.

  137. BI thinks everyone at Stanford is making 90k as soon as they graduate. Pity the poor kids who are only making 80k 10 years out.

  138. “there is a $160,000 difference between the two options. So no, I would rather just buy them their first condo.”

    Is that what it costs to buy a condo, or is that the down payment?

  139. Talking about cash flow this and borrow that just onfuscates the fact that there is a $160,000 difference between the two options.

    Are you planning to take it with you?

  140. Chico’s where I used to teach. Lots of rural and first-generation college students. And I hear from those still I need the trenches that none of the state schools, including the Cal States, are easy to get into because the demand is so insanely high for cheap college degrees.

    And Chico is a sweet little town.

  141. Sky, I hope you jump in often on some of these discussions (as well as everyone else here who attended top-tier colleges).

    It may be wishful thinking, but I may be facing that sort of decision soon. I’ve encouraged DS to aspire to top tier schools, with the hope (communicated to him) that he will meet or approach their standards, thus making himself an attractive candidate for lower tier schools who offer generous merit aid.

    But getting into a top tier school is looking to be less improbable than it did a couple of years ago. He’s seen kids he knows, and older sibs of his friends, going off to top tier schools, and he’s gotten test scores good enough to not keep him out.

  142. Finn, why not save the $160k and just go top tier for grad school? That’s what the people I’m thinking of (Google TBP IA Alpha laureates) did.

  143. “Is that what it costs to buy a condo, or is that the down payment?”

    http://www.realtor.com/realestateandhomes-detail/1594-Garden-Ct_Charlottesville_VA_22901_M66826-89680?row=1

    Really, I don’t know that buying a recent grad a condo outright is the best choice. What you don’t want is for them to think “Awesome, no housing costs, let’s party every night and go away every weekend!” Seeding productive assets might be better. It depends on the kid.

    “Are you planning to take it with you?”

    No, but I do want to grow and leave a nice estate. Also, my thoughts are:

    1) They can go to just about any of the top schools on an ROTC scholarship.
    2) From what I’ve gathered, the remunerative value of the top-tier schools is limited to a few specific industries (IB, Biglaw, certain companies for management consulting) but in such cases, it’s the graduate degree, not the undergrad, that is more relevant. If that’s what they want, then it’s probably better to go to a state school first, anyway.
    3) My brother was not particularly thrilled with his Ivy undergrad. He always felt a little too middle-class to fit in. He does not think that the degree has been notably helpful professionally, and he specifically does not believe that they are worth the cost at their current prices.

    Considering all of the above, especially from the middle-of-the-road position of having to pay full fare but not being wealthy enough for the cost to be insignificant, I’m not convinced of the value. Just to cover the $160k premium, I’d have to earn nearly $300k.

    For so many reasons, capital/business/investment ownership is far more advantageous.

  144. Finn, whether it is worth it depends on the student, the specific school, and on how the aid package compares to what you can afford.

    I wanted to be a management consultant, did that for a while, and then wound up in BigLaw, where pedigree is critical. I would not have gotten the jobs I had without going to the schools I attended, because neither of my employers recruited outside the top 10 or so schools. Nor were they interested in anyone below the top 25% within those schools.

    I would pay a great deal to send one of my kids to Harvard, Princeton, Yale, MIT, or Stanford, because I think the undergraduate experience and network is worth it (and suspecting the medians are skewed by people in post docs, etc.).

    But I have a fair number of classmates whose parents would like to do it over again and send their child to Chico State, because the ROI never worked out.

    Looking back this was most true for what we called “non academic admits”: recruited athletes, geographic diversity admits, lefty activists (law school, not undergrad) who found it hard to compete academically or socially because they were on aid, and wound up in the bottom of the class.

    But they will always have the sticker on the car….

  145. I am all for not paying for Harvard if my kid can get in, provided I can prove it to him/her that he/she is worth that number but Harvard is not worth that number. This may be more difficult if I have been pushing them to achieve academically their whole life.

  146. Wow, sorry I missed a fun day (Rosh Hashanah — Shanah Tovah all). I was rather depressed to see my alma mater had the lowest avg salary of any of the ones I considered. I think it is partly geography (all others were typical NE ivies, vs the lower-cost upper Midwest), and partly selection bias — I went to the funky liberal school that didn’t even offer a business degree or a BS, so obviously the folks who wanted those would have gone elsewhere. Most of my peers were either of the “do good in the world” variety (who will never make much), or of the “require graduate study” variety (which run into the “six years post-grad” issue discussed above). Or, like my roomie, both (Ph.D in theology form Harvard, with her husband in seminary). So I do think the numbers are useful — my school does well on graduation, as I’d hope, and has a much more reasonable net cost than I expected), but would likely to be more confirmatory when the decision has been made, or at least reasonably narrowed down.

    Totally unrelated, huge swan dive off the Whole 30 wagon last night — competing challahs from my two favorite challah-makers, and one of them with big huge chunks of dark chocolate in it. I cooked all freaking day with no problem at all — then that shows up and I was a total goner within about 5 seconds of putting it on the board! But it was useful: I felt like total crap last night (even swollen glands this AM), so back on the wagon today.

  147. I agree with Sky. I enjoyed my time at my alma maters and feel that they tipped the scales on helping me get a few jobs that I’ve had. I, too, would pay my kids to attend top schools. This is why we work hard–to give our kids opportunities. However, I’m Asian, so my attitude might be influenced by cultural expectations.

  148. Re: full pay: we probably could pay full freight for either undergrad or grad school, but not both. So it would depend on a lot of stuff. First, it would have to be a real top school, and the right fit for my kid. Second, it would either have to be the terminal degree, or have a high likelihood of self-funded grad school (DH is fond of saying that in his field, if you don’t get a fellowship to go to grad school, you’re not smart enough to go to grad school in that field). I would not want my kid taking out $150K+ in loans for law school or med school — you’re just too locked in that way.

    I also have a soft spot for my alma mater so would likely spring for that, too. :-). But then again, it was an awesome school.

  149. “Most of my peers were either of the “do good in the world” variety (who will never make much), or of the “require graduate study” variety ”

    I encourage my kids to be of both the “make a lot of money” and the “do good in the world” varieties, and point out that it is easier to do good with a lot of money than without it.

  150. Finn – When I went to elite school it was an unusual time – a large proportion of the student body was public/parochial school, left leaning, middle class, ethnic/immigrant (that is not intended as a code word for my group, there were lots of different groups included). Soon after I graduated, there was a decision taken to go back to a more traditionally sourced class (with 50% instead of 20% women) and targeted recruitment of underrepresented groups. That was done in part to reduce student activism and in part to ensure a better crop of potential donors, but it was also just demographics – the baby boom was winding down. School was also affordable with work and parental savings (I don’t know if they had federal student loans back then – I don’t think so). I had a big scholarship (the same scholarship DD2 received 30 years later) to the leading Midwest school, but my Mom was all in for the Ivy and it was hard to turn down. For my two kids who went to elite colleges, I didn’t have to pay much more than I did for DS1 at state flagship. The largest cash outlay was for for the youngest when he was the only one left in college and my income increased. As a parent, the principal ROI decisions I had to make were for the eldest, who had lots of other issues and was not an elite student, when I was close to broke and had no idea how I was going to manage to educate all four. For DD1, one elite college in our home town was off the table when the package was all loans. DD2 was strongly encouraged to decide against eating club Ivy at discounted but far from zero tuition and take the scholarship.

    And it was considered bad form to put a sticker on the car….

  151. I often think about Rhett’s philosophical example, that the person who is helping to efficiently and economically deliver tens of thousands of ccf of clean, natural gas every day to people so that they can sleep in a warm house, cook their food, and take a hot shower is doing a lot of good.

  152. I think DW and I need to adjust our thinking a bit. We’ve been like LfB’s DH, and both of us had grad school paid for by our employers, so we’ve not really thought enough about grad school costs. But law school and med school have not been ruled out yet, so we need to keep that in mind as, to my understanding, those are rarely paid for by others (I’d appreciate any confirmation or correction if that understanding is incorrect).

    A lot of people here have suggested a lower tier school for undergrad, and then a top tier school for grad school (and we’ve also discussed how difficult it can be to get a job in academia without a grad degree from a top tier school), but I’m wondering if an undergrad degree from a top tier school makes it easier to get into a top tier grad school. I’m thinking of DS’ teacher from last year, whose undergrad degree was from Yale, and got accepted into Yale, Harvard, and Stanford for law school.

  153. Milo, I also think the entrepreneur who’s building businesses that employ people is also doing a lot of good.

  154. “DD2 was strongly encouraged to decide against eating club Ivy”

    DS recently told me that he has no desire to attend that school, despite the fact that DD’s BFF’s cousin just started there.

  155. A parent – but don’t you think it would be unkind to encourage your kid to apply to Harvard with the proviso that he can’t go there if he gets in? If you don’t think it is worth the money then I would discourage him (or her, sorry!) from looking at a school where you would pay full fare.

    I can see following the path of “we will pay for our state university, and we will pay that same sum towards a private school, but you will have to come up with the rest” and letting the kids make that decision.

  156. Finn, I think that most people underestimate what a pain in the *ss it is to be an entrepreneur. Give me a job working for “the Man” with a regular paycheck and benefits any day. Worrying about making payroll, managing employees, going without a regular salary and benefits, doing everything yourself, etc. sucks.

  157. Sky, did you enjoy your Ivy experience?

    Ultimately, I think the most important factor if DS is accepted to a top school, and we decide to send him there, is an expectation that he will have a richer experience there than he could get at a lower tier school.

    It’s kinda like with my kids’ current school. Every time I write a tuition check, I ask myself if it’s worth it, and it always comes back yes, because besides doing well academically, they are really enjoying their time there, much more than they would at a public school.

    Either that, or the aid package offered is better than the lower tier schools.

  158. “I think that most people underestimate what a pain in the *ss it is to be an entrepreneur. ”

    And that’s why we need to appreciate them.

  159. “they are really enjoying their time there, much more than they would at a public school.”

    How would you know?

  160. Finn, what does he think he will major in, and how hard does he want to work (and for how long)?

    FWIW my law school took more students from its affiliated college than anywhere else, but that was still fewer than 25 people matriculating out of a college graduating class of about 1,200. (It’s possible there was a lower yield in that group if students were tired of the locale, but I doubt they admitted more than 50 given the overall stats).

    It’s an edge, but one that has to be weighed against competing with other Ivy students for grades for four years first.

  161. “How would you know?”

    DS went to a public school before he moved over, and he was much happier afterwards. And I don’t think the classes, activities, and peer group he enjoys the most would all be available at a public school.

    Perhaps I’m also trying to feel better about writing the checks, and perhaps it’s also because the school does a good job of making parents feel good about it.

  162. Finn, I loved the academic experience, but I’m the sort who will start studying at 8 am and close the book at midnight, considering it a day well spent. The professors were brilliant and accessible and happy to dine at an eating club to discuss macroeconomic theory :)

    The social side was much more difficult for me. At the time the school required significant work-study (I tutored) and loans (hence management consulting before law school). With only 40% of the class on aid at the time, I often felt left out of things like spring break, which I spent working.

    It is likely I would have had more fun somewhere else, but I’m descended from a long line of Calvinists and don’t prioritize fun :) I doubt I would have learned as much elsewhere, in and out of the classroom, because I wouldn’t have been stretched as much.

  163. @Finn – for medical, one lady whose husband is an orthopedic surgeon mentioned that he was in the army and got his medical training fully paid for. There are service requirements but he came out with no loans.

  164. “what does he think he will major in”

    That could be a topic for another day, all by itself. What’s a good undergrad major for a lawyer wannabe?

    He’s slowly narrowing it down. He’s decided not to major in business, accounting, social science, education, or the arts. I think he’s most interested in either medicine, law, or science after grad school, and is considering an undergrad major in science (he’s really enjoyed both bio and chem, and is looking at biochem programs) or engineering (possibly biomed as in preparation for med school). He’s recently talked about trying to get an internship next summer with DD’s BFF’s dad, who’s an MD who does research in nuclear medicine.

    OTOH, he’s very interested in law. He and some friends follow SCOTUS decisions, and he likes to talk about them with me too. He likes debate a lot, and I think he harbors some unspoken dreams of arguing cases at a very high level.

    Would biochem or biomedical engineering provide appropriate background for law school?

  165. “competing with other Ivy students for grades for four years”

    I saw something where Malcolm Gladwell made a comment about Ivies admitting athletes and legacies because even at Ivies, someone has to fill the bottom quartile.

  166. Finn – we know his field already – patent lawyer :-). Engineering undergrad, then law school.

  167. Finn–If your DS wants to go to med school, I would discourage engineering and encourage a focus on an easier major where he could get higher grades. Louise nailed it on the IP focus in law school being the perfect fit for someone with a biochem background. I work with a bunch of IP lawyers and all have a life science background, with advanced degrees other than a JD.

  168. Ditto what Milo said at 6:21. Milo, I’ll see you at orientation in 2025 in Blacksburg or Williamsburg or Harrisonburg or Fredericksburg (or Charlottesville), and we can buy our kids a condo to share and rent rooms to their friends.

    In all seriousness, I think it really depends on the student and his/her goals for the future. I have a friend who went to MIT because she got in, but she transferred to UVA after one miserable semester so far from home. She went on to law school at U of Richmond and had a very successful career with a regional corporate law firm before she decided to go in-house at a company based in Louise’s city, which is an easy drive to visit family & friends back home. Sometimes middle class kids from small towns just don’t fit in at these elite schools. And if you want to stay in/near the same state, you might make the best connections at a state school because the local/regional companies are the ones who spend time and money on campus (recruiting and “investing” in programs).

  169. Houston, DS got similar advice from an MD mom of some kids he knows. She suggested not going to a top tier school as an undergrad, and instead go to a lower tier school where he can get a better GPA.

    OTOH, she went to Cal, and did well enough to get into her first choice med school.

  170. Finn – the decision making about attending a short list elite university for undergrad has three components.

    1. Is this a desired good or experience for the student and/or his family? Milo and WCE and several others have indicated that it is not something they would particularly pursue for a child even if cost were not an issue, although they would not stand in his way if the stars aligned for such an opportunity.

    2. Will the student academically and/or socially thrive in the environment?

    3. Will expending financial resources on this take away significantly from the student’s options later in life with no guarantee of return on investment, or from options for the rest of the family?

    For me and my ex as college students and later on for my two eligible kids, no 1 wasn’t even a discussion. Of course it was a desired good, and it was the parents’ job to figure out how to make it happen financially. But it wasn’t something that either in the 60s or the 90s we had to train for or that had dominated our childhoods – we showed up and did well in school (my schooling was quite a bit inferior to the other three) and the opportunity was known to us and there for the taking.

    No 2 was only considered in the selection process between elite institutions to choose the best fit. Both of my kids did not select eating club Ivy for well thought out social reasons.

    No 3 affected the selection process for the child who wanted to major in a humanities field – if you don’t have loans, you can study whatever you want and work for peanuts afterward.

  171. “Of course it was a desired good, and it was the parents’ job to figure out how to make it happen financially”

    If anything makes me hesitant about my resolve on this matter, it’s that my parents believed and stressed the same thing as what you just said. But…

    1) (and most importantly) the cost premium was much smaller back then, even adjusted for inflation
    2) they never planned to pay the entire fare; some loans were part of the deal
    3) they never shared, and still don’t quite share, my MMM-like belief in capital accumulation. They’re a little more like Rhettt, seeing money as a tool, but you can’t take it with you. The most highly ranked, most expensive college in the U.S. was fine, but after those four years, you’re 100% on your own financially, including any grad school.

    So these are some of the things I have to remind myself from time to time. It sometimes requires conscious effort for me to give myself permission to form my own, slightly different values.

    And I’m maybe about 95% sure. If I end up with an exceptional student who desperately wants one of the top elites, and it really makes sense over something like UVA, we can cross that bridge when we get there.

  172. There is a difference between the Northeast and my area. For Totebag kids the parents will choose a good public school district or opt for private options (of varying costs). They will also pay for extra curricular activities. There is quite a bit of shuffling around to find the best fit school.
    For college if the kid does well enough and gets into a flagship that’s awesome. Only very few even from the top private schools go to elite colleges.
    There are two homes in my with lawn signs saying “Oaks School High School Senior”. At the end of the year, I must ask which colleges they are attending.

  173. “Would biochem or biomedical engineering provide appropriate background for law school?”

    If he does well, he could write his own ticket. Most lawyers come from humanities backgrounds, and yet our job is often to explain technical or scientific things. Which tends to be much easier to do when you understand them yourself (e.g., one of my classmates was a dr. who was going to law school to do med malpractice defense, because she was so PO’d by the malpractice claims she saw as pushing good dr’s out of business). Per Houston, doesn’t even have to be engineering; could just use, say, some version of a bio degree to then go to either med school or law school.

    “It sometimes requires conscious effort for me to give myself permission to form my own, slightly different values.”

    Honestly, that’s one of the best things I get from this blog. Sometimes there are things that I so take for granted that I don’t even realize I’m taking them for granted. And then I hear you or Rhett or Finn or whoever and think, oh, yeah, ok.

  174. “Only very few even from the top private schools go to elite colleges.”

    Do you think that is because only a few can gain admission, or is it because, outside of the Northeast, the parents don’t place that much of a premium on the Ivy degree? There must be a pretty good number of kids from those schools going to Duke, right? Are they thinking that it’s a better investment for a kid who is likely to stay in the greater region?

  175. I have seen a number of CS majors get accepted to good law schools. Supposedly, there is a lot of opportunity for them iin patent law.

  176. Someone asked whether it is important to go to a top tier undergrad to get to the best grad schools. I think the answer varies so much depending on the field. It probably matters more in the humanities. In STEM, I think distinguishing yourself in your school, and in particular, working on some kind of undergrad research project, is really important, more important than the school itself. So, it is important to choose a school where people are doing some kind of research, and where the equipment is up to date. A third tier private liberal arts college or small public directional is probably not a good bet. But there are some liberal arts colleges which do a lot of undergrad research – Grinnell comes to mind, and Wellesley, and Trinity. Also, if a kid finds him or herself at a school where the professors have no equipment and are 15 years out of date, all is not lost – the NSF sponsors lots of undergrad research projects and fund the students for summer research. The program is called Research Experiences for Undergrads (REU), and typically funded students travel to a R1 campus for 8 weeks in the summer. Do one of those, and a student with good grades from Podunk U will get accepted to a good grad program.

  177. This is a really fascinating blog article on the history of the Johnson and Johnson firm, and the founding family. Rhett, this is right up your alley:

    http://www.joshuakennon.com/the-complex-history-of-johnson-johnson/

    The combination of low dividend payouts and high trust retention, along with beneficiaries themselves getting next to nothing relative to the trust value that was accumulating, led to a series of family tragedies, battles, deaths, and scandals that make a Mexican soap opera look tame in comparison. There was a Polish maid who got her hands on more than $300 million of the family fortune and turned it into $3.6 billion. There were allegations of rape and incest. There were drug overdoses and suicides. There was an alleged murder plot. There were numerous lawsuits that resulted in tens of millions of dollars going to lawyers. There were family members who married and divorced as if they were changing coats. On the plus side, there were staggering charitable donations that benefited civilization.

    One of Seward’s children accurately summed up the trusts General Robert convinced his brother to establish as thus: “Those trusts weren’t set up for love and caring, they were done because Uncle Bob wanted to control the vote on ninety thousand shares of stock without experiencing the tax consequences of ownership.

  178. Finn, I’m with LfB – there are a lot of opportunities for people who know both a hard science and law. Patent law, environmental law, and IP litigation all need those people, and there are very few of them.

    Based on what you have said about your DS, I would focus on the quality of the undergrad program for now, because if he decides to get a Ph.D. instead it will matter.

  179. Milo – I know a few parents who are Duke alumni but haven’t heard of many kids going there. Most kids do stay in the region. For instance, I know a few grads from SWVA Mom’s hometown and others who went to school there. Similarly, there are folks from UVA, Georgia, Clemson and of the course the NC flagships (both UNC and NC State). The academies are also a popular option so there are Totebag type kids going to West Point or the Naval Academy. I haven’t heard of anyone going to the Air Force academy which is in Colorado Springs (I think).

  180. Milo – The child who went to West Coast elite applied to UVA (for a full boat program) and had she received the grant she probably would have gone there and had the same deal as her sister with needing no loans. UNC Chapel Hill and Duke were considered top schools in my day and in my kids’ day and probably still are. But as I understand it, from Northern Virginia (unless you live far out in a more rural county) your kids will have to be elite level applicants to get into UVA. It may be the same thing for North Carolina kids from certain zip codes, I don’t know. The Texas system also seems to have some similar quirks. Mooshi worried once that a few Bs might keep her son out of Stony Brook. The Totebag parent is trying to give the child the widest range of options by either having enough money to pay full price or private school or high tax zip code and elite public school or lots of extracurriculars/tutoring or formalized help with learning or sensory or organizational issues or supplemental learning to stave off boredom and its negative effects. But a consequence of the shrinking pie mentality is that access to many top public options (which are not always funded or staffed so that a student can graduate in four years) is being limited by the same elite competition.

    The question I find interesting and that gets asked by the majority of UMC parents with children below the elite or near elite level is not, is Princeton worth paying full price, but is Skidmore worth it.

  181. “but is Skidmore worth it”

    Having spent more than a few nights in the bars and clubs of Saratoga, I’m going to say no.

  182. This seems relevant to today’s conversation: http://www.nytimes.com/2015/09/13/opinion/sunday/are-college-lectures-unfair.html?mabReward=CTM

    This is total anecdata, but the lecture format is a big reason I would prefer DD to go to a SLAC and am probably more willing than I should be to fork over $$ to do so. I found big lectures deathly dull, and I’ve always been afraid that DD’s bad angel would take over in that format. The Cogmed testing we did revealed that those fears have a legitimate basis: she is below the 10th percentile for her age in her ability to process audio information (as compared to way-above-average in both regular cognitive skills and visual processing). It’s like she has a giant funnel from her ears to her brain, and you pour stuff in, but the tube is too small, so this little stream makes it through, but everything else just swirls around and overflows and runs down the sewer. Smart-but-fidgety kid + hours in a giant lecture hall + processing giant masses of input through teeny tiny little audio learning capacity = setting her up for failure. I want a school that plays to her strengths instead of her weaknesses, and if I have to work a few more years to pay for that, I will.

    I feel bad saying I’m not sure I’d do the same for DS, but it’s true. I know I will be just as focused on a good school for him as for her, but he’s the kind of kid who will be just fine anywhere and everywhere, so there’s a bigger universe of “good fit” options out there. Plus I suspect he’s going tech, which would both argue more for larger public schools (given the resource issues Mooshi mentions) and increase the likelihood of merit scholarship $$.

  183. “‘but is Skidmore worth it’

    Having spent more than a few nights in the bars and clubs of Saratoga, I’m going to say no.”

    Largely I agree. But it depends on what the other choices are. If the other option is Podunk U, and it’s a kid like DD who will crash and burn in that environment, then, yeah, it’s worth it to me.

    OTOH, if it’s a question of full pay at my alma mater or a free ride at Skidmore, then I might just have to overcome my innate bias and tell her Saratoga is lovely at this time of year. :-)

  184. ” I found big lectures deathly dull, and I’ve always been afraid that DD’s bad angel would take over in that format.”

    One of the big advantages of my alma mater, which I never really appreciated, is that we never had classes larger than about 20 students, even for things like freshman Chemistry. And there were no TA’s.

  185. I’m in SF for a sports weekend with my dad and brother. Giants game Saturday, Raiders game Sunday, and 49ers game last night. We stopped at Stanford on the way down to the game yesterday and I’m sold on sending my kids there :)

  186. Having wanted to go to Duke at one point in my life, I was interested in what Louise said about not having a lot of their alumni in her area. The top 5 home states for the class of 2017 are NC, CA, NY, FL, TX. With only 6,471 undergraduate students and drawing them in from all around the world, I’d guess it’s only a few hundred from NC in each class, and with a degree from Duke they might be more likely to move away after college.

  187. My Ivy was definitely worth it. I had never been in an environment where there were Other Nerds! Interested in learning! And extracurriculars that EXACTLY fitted my interests. It was awesome. I was a bit limited on the social side – I still have this instinctive bias against schmoozing – but I did make a few close friends.

    I have a feeling that if we stay in the same town/area, our kids will not be able to go to Ivies or even close, unless they are mega-superstars in some area we don’t know about yet. Yet another reason to move to the country before HS. ;)

  188. Skidmore is on the list for my hs senior niece, who is a nice girl with plans to major in math, as many young women do, with the objective of becoming a high school math teacher. A product of a top rated local public school system but eclipsed by several classrooms worth of more test savvy and tutored kids, she wants to be within a four hour drive of home. Her mother wants her to be in a smaller school that lacks the sort of high achievers that have made her feel less able. Plus it has to have a measurable percentage of people from her ethnic group (there is a bit of contradiction in those two objectives). Mom went to a top WASPy college in Maine and hated every minute of it. Dad (who is 60 plus and there is another kid with issues two years younger) went to NYC public colleges, thinks state flagship is more sensible, but has resigned himself to working forever to fund undergrad private for these kids. Mom has a modest home business and the issues kid and her 90 plus parents on her plate. Those of us women in the family who are opposed to this vigorous exercise in limited expectations are mildly encouraged by the fact that Clark is the student’s top choice from the approved list.

  189. “There must be a pretty good number of kids from those schools going to Duke, right? ”

    The problem is Duke’s price tag. We are wrestling with this right now. Ivies don’t interest DS, as his focus is engineering. However, Duke, Johns Hopkins, etc. have excellent engineering programs and cost just as much as the Ivies.

  190. Coming from a good family, I can’t wrap my head around the fact people grew up that way, with so much neglect, abuse, entitlement, self-sabotage, and lack of purpose.

    I can’t quite wrap my head around someone thinking it’s all that unusual. The money part is unusual but the drama seems fairly typical of people I know well enough to know their secrets.

  191. DD – We stopped at Stanford on the way down to the game yesterday and I’m sold on sending my kids there :)

    Contrary to many visiting students who gripe about Stanford’s architecture on College Confidential, DH and I both liked the place. We have visited Cornell too, but felt that Ithaca was too remote. We visited in the summer once and once in the fall. It was beautiful but we wondered about the winters. OTOH, in a city like Boston with lots to do off campus, winters are not a big deal.
    I would definitely think of college location while choosing a school.

  192. Meme – Very interesting.
    “the sort of high achievers that have made her feel less able,” this was an issue for DW, according to her, in her sought-after HS, even though her stats were strong. She recovered her confidence in college. My experiences were the inverse.

    “The problem is Duke’s price tag.”

    True, but Louise was talking specifically about parents of kids in the top private secondary schools in her area. Seems strange that you’d live in the fancy suburbs and pay for 13 years of private school, THEN turn all MMM when it’s time to pay for Duke.

  193. @Milo – Some kids don’t want to go to Duke. I know of someone who went to Ponoma because he didn’t want to go to Duke (he said his whole class went there :-).

  194. I went to the same school as LfB – top tier SLAC. It was a life-changing experience and one that I would gladly pay full freight for my children to have. I was an econ major and fully appreciate the value of the util optimization (Rhett’s philosophy) vs. monetary optimization. I LOVED my college experience.

    Finn – my husband was a math major and worked before going to law school. One thing I didn’t realize is that if you do well on the LSAT a lot of schools will give you lots of money, especially those outside the top 14. He had the LSAT scores to get into any school, but he wanted to stay in our town. He got full rides to 3 of the schools in town and $15K/year to the top school. The financial analysis there was if he went to the lower ranked schools, he’d have to be in the top 5-10% to get the best jobs in town, but he’d have no debt vs. having some debt but getting a degree from a higher-ranked institution and more opportunities for top jobs.

    I got my MBA part-time and received $5K/year tuition reimbursement. Financially it didn’t make sense to pay more to go full-time or to try to get in a high ranking school because I wasn’t going to do I-banking or management consulting. The MBA was more beneficial as a screening/signaling tool. It has paid for itself with the raises and job opportunities I received by having it on my resume, but I’ve used very little of my MBA in my day-to-day job in corporate finance.

    Long story short – I’d pay for a better undergrad and the graduate stuff will figure itself out. Either you are smart enough to get it paid for (STEM) or you can get tuition reimbursement from work or good enough test scores to get some scholarships (or take a few years off in between grad school and law/medical school and save some cash for it).

  195. Rhett, it’s 10 years after enrollment, not graduation, so they’re more likely 28. But I do think you’re a bit out of touch with reality! :-)

  196. Rhett – I’m going to go with out of touch, just because that’s a single earner figure, and isn’t that about what you’d expect from those who jump on the IB or Biglaw trains? If there are 1,000 kids in a graduating class (just guessing), what would you realistically expect 100 of them to be doing to earn more than that? And if it’s running a startup, they’re not necessarily going to be reporting income much higher than that, anyway, but reinvesting.

  197. I don’t think everyone that graduates from Harvard is going to work for a law firm, Wall Street or IB. How many 32 year olds ware making $250K? We have young cousins that went to Harvard. One is working for a large tech firm in silicon valley. I don’t think she makes $250K and she is 30. She might have options that will eventually be worth a lot, but she doesn’t make that much right now.

    My other friend has undergrad from a top 15 college and Harvard MBA. He works for a game/tech firm. He doesn’t earn $250K in salary, BUT he does receive large bonus amounts in certain years for his product.

    Duke, Georgetown, and a few other schools are just as highly regarded as the Ivies, Stanford, MIT etc when choosing employees for IB, trading, asset management. The graduate school matters more, unless you just getting an undergrad and sitting for the CFA. Duke undergrad and grad alums have a very sting network across Wall St.

  198. My family was Totebaggy in its beliefs, but didn’t have as much money as the average family here. My college/law school path was really cheap – I was a good student in high school, but didn’t have anything special about me. I went to the big state school and got about 1/2 of it paid through scholarships. Did well there and got a high LSAT score. Went to a top 25 law school (but not a top 10). The schools ranked 10-25 were willing to give me a lot more money and I went to the one who gave me full tuition and a living stipend scholarship so I had no debt when I graduated which is a nice place to be since I now don’t work :)

  199. Finn – patent lawyers or hard-science IP lawyers usually have Ph.Ds and JDs – I know 2 with Ph.Ds in biochem. It is a long road of schooling to get to that point. OTOH, I don’t know many non-IP lawyers who were science majors in undergrad.

  200. I don’t think everyone that graduates from Harvard is going to work for a law firm, Wall Street or IB

    Right, but I assume if we’re looking at the 90th percentile you’re talking about exactly the group.

  201. “Right, but I assume if we’re looking at the 90th percentile you’re talking about exactly the group.”

    And that’s what I think you’re seeing, but how much did you think they were earning?

  202. I think math teacher sounds like a perfect fit for Mémé’s niece. My cousin’s daughter just started teaching math and my relatives have taught math to thousands of rural Iowans. If you’re bright enough to understand and explain the math in a variety of ways but not so bright that people who don’t understand immediately drive you crazy, math teacher is the career for you, especially if you marry at least a comparable earner.

    You start working at 22 or 23, get a pension from the state (choose your state carefully these days), hit your career level earnings in 10-15 years, have almost fully subsidized family medical insurance (choose your state carefully), and have minimal childcare expenses and lots of time with your kids once they hit school. You also get to keep your own child out of all the nasty bits of your local school, if you teach where you live.

  203. what would you realistically expect 100 of them to be doing to earn more than that?

    Well, 31% of Harvard kids go into finance or consulting so if we take the top 1/3 of them… IIRC you can make 250k to +2.5 million plus at 25 if you play your cards right at the right bank or hedge fund.

  204. $250k at 28 seems about right for the 90th %. Many probably either worked a few years, went to business school and now are just in the beginning years in IB or PE or VC or went to law school and are now third years. Check back at 38, and I bet the 90th % is much higher.

  205. but how much did you think they were earning?

    500k to 1.5 …10?

    But at 30, he abruptly decided to leave the Street. Despite the money Polk had been making, over the years he found himself nagged by envy. In a New York Times op-ed, he describes working at bulge-bracket firms like Bank of America (BAC) and Citigroup (C) early in his career, on trading desks where everyone sits together and perspective goes out the door — when you sit next to someone making $10 million, your $1 to $2 million compensation doesn’t look so great.

  206. Rhett – for reference, my contemporaries *who do well* and are biglaw partners or PE execs pull down a few mill a year if I am guessing right. This is 15 years out and they would probably be the 95th percentile of grads. The 90th percentile is probably my friend at biglaw who is not a partner but probably makes 400-500K.

  207. Yeah, I’m going to go with expectation adjustment. $250K six years post-grad? Very much on the high end. In my field, you’re still years away from partner at that point, and only the very, very top law firms will pay that much for a mid-level associate (don’t know about IB). Per most recent NALP survey, big firms start around $160K, and the median 7th-yr associate salary at those firms is $200K. A bonus could put you at $250K, but there is huge attrition between years 1 and 7, so it’s really a very very few who actually make that kind of $$. http://www.nalp.org/2015_assoc_salaries [Finn: take special note of the IP lawyer scale in the notes below the table for your DS]

    Also: IIRC, the article said this was based on W-2 data. Will that show things like stock options that are granted but not cashed in? I think a lot of the tech firms rely on non-salary-based incentives, so that $250K likely understates the true haul for a number of people in those top echelons.

  208. Very much on the high end.

    But, we’re talking about the top 10% of the top 0.1% of all college grads.

  209. “But, we’re talking about the top 10% of the top 0.1% of all college grads.”

    Not exactly. That top 0.1% comes from different metrics–SAT scores, HS GPA, etc.–so you can’t just multiply the two together. If you wanted to see the earned income of the top 10%*0.1% = 0.01% of all 28-year-olds, it’s certainly not going to be limited to Harvard.

  210. Oops, right. But still, 28 = 5 years out of law school. So my numbers above would be on the high side (6th year, not 7th year).

    I get that this is self-selected, i.e., by definition, the top 10th percentile of earners are those that started at the big firms and succeeded and stayed and getting big bonuses (whereas the top 10th percentile of *graduates* will include some percentage who flame out, don’t choose the highest-paid professions, opt out to have kids for a while, etc. etc. etc.). All I am saying is that even for that crew, in law, $250K number is on the high side for even the most successful 28-year-olds. And Biglaw is a pretty high-paying career among the various options available to Harvard grads.

    I think expecting even the top 10% to make $500K – $1MM 8 years out of school (and X years out of grad school) is very unrealistic. I think IB or maybe tech startup are the only real options for that — and don’t know that ANY school is good enough that 10% of its graduates will make it big in IB or thenextFacebook at 28.

  211. “but felt that Ithaca was too remote.”

    Even their literature said it before I went there…”centrally isolated”

  212. it’s certainly not going to be limited to Harvard.

    I would have expected it to overlap more than it apparently does.

  213. Denver Dad – the Raiders game was hard to watch, but the 49ers was a lot of fun! How were your stadium experiences?

    I agree that Stanford has a lovely campus, and its environs are charming. DS and I walked around the campus a few years ago with my niece. DS had no chance of going there, but my niece definitely did. Unfortunately she ended up not applying.

  214. Louise, I took a look at the link you posted and found it interesting that multiple students went to my local flagship U.

  215. I did not know that law schools offered financial aid, although I can see them acting just like undergrad colleges using it as a tool to boost their profile.

    Is merit aid typically tied primarily to the LSAT? IOW, is it relatively independent of undergrad U, or perhaps even undergrad GPA? Is LSAT score a primary means of benchmarking law schools?

  216. I really hope HM comments on this, but it seems to me that the dynamics of law school and med school here might be a bit different than in other parts of the country.

    I know of quite a few lawyers and MDs here who went to one of the top local private schools, then a top or near top tier college for undergrad, then to local flagship U for law or med school. My niece went to law school at flagship U and mentioned that a lot (most?) of her classmates fit that profile. My guess is that unless you go to a really top tier law school, the networking benefits of going to flagship law school may outweigh the benefits of going to a higher rated law school, even if you aspire to things like sitting on the state SC.

    I think our current state AG sort of fits this profile.

    Interestingly, our current gov turned down MIT for flagship U because of the cost.

  217. Finn – as far as I know LSAT and GPA are the primary admission criteria, but I don’t know how those tie into financial aid and/or merit aid. The US News ranking is an OK proxy, but you have to take it with a grain of salt, so “top 10” might encompass the top 15 schools, etc. In general, right now, I wouldn’t counsel anyone to go to law school outside of the top 30 schools unless you can go with a full scholarship.

  218. But if the local school places lots of grads locally (here the equivalent would be BC and BU), then you get a bump in effective ranking.

  219. About Harvard — Remember, the report only includes students who received federal financial aid, so they are only measuring about 10-13% of their students. This is assuming the numbers they’re reporting for salary cover the same cohort as their other data does.

    Only about 10-13% of Harvard students received federal aid.
    10% received Pell Grants.
    3% took out federal loans.

    I’m guessing this subgroup tends not to go into IB or similar lucrative fields. Assuming this information is correct, it highlights a reason to hold back from leaping to conclusions based on this report.

    https://collegescorecard.ed.gov/school/?166027-Harvard-University

  220. CofC,

    But, folks seem to be saying those number look pretty accurate for 28 year old grads. What do you think the actual numbers are? Closer to mine or closer to 250k?

  221. “My guess is that unless you go to a really top tier law school, the networking benefits of going to flagship law school may outweigh the benefits of going to a higher rated law school, even if you aspire to things like sitting on the state SC.”

    @Finn: I agree 100% with this.

  222. I’m guessing this subgroup tends not to go into IB or similar lucrative fields.

    And, we’re not talking about the entire group, we’re talking about the 90th percentile. You’d think you’d have a few strivers who would get snapped up by Bridgewater Associates or some such.

  223. Finn – at least when I was applying, a good GPA was necessary but not sufficient for merit aid. The GPA limited the pool of potential recipients and the LSAT score was what determined the winner. But this was ~15 years ago. Law schools have quite a bit of money to give out. Be careful, though, because many only offer it for the first year and the subsequent years conditioned on being in the top x%. I wasn’t confident that I would achieve that, so I went with one of the few schools that guaranteed the scholarship for 3 years.

  224. Louise– I don’t think flagship U has a real specialty, but we have a lot of kids who come here mainly to go to the beach, especially during summers.

    We also have strong programs in Travel Industry Management and marine biology. The son of a good friend in CA picked flagship U over a UC for marine biology.

  225. @Finn – I want to think it must be Marine Biology with the added bonus of the beach ! NC kids LOVE the beach ! Question – where did you go for vacation ? Reply – The beach.

  226. Denver Dad – the Raiders game was hard to watch, but the 49ers was a lot of fun! How were your stadium experiences?

    They are markedly different stadiums as you’d expect – the newest and one of the oldest (maybe even the oldest?). Levi’s definitely has the wow factor going but once you get past that, it’s nothing special. They still don’t have enough bathrooms – whatever formulas they use for the number of toilets they need don’t factor in that everyone goes at the same time. And traffic getting out was ridiculous.

    The coliseum is old and in a crappy area, but I liked it. The thing I found striking was the almost complete absence of advertising. Most stadiums have ads on every available surface and there was just nothing there. And the announcer was very low-key. At levi’s, he was trying to pump up the crowd after every play and the guy in Oakland didn’t do anything.

    What I found most interesting was the crowd at the Niners game was rowdier than in Oakland. Given the reputation of Raiders fans, I expected the opposite.

    My bug complaint was at AT&T. There are no water fountains and they charge 5.25 for a bottle of water. We were sitting by home plate and I asked someone where there nearest one was and he said it was in the left field bleachers.

  227. Finn, in 1993 DH got accepted to law school at Harvard, Yale, Stanford, Chicago, Berkeley, and U. of Indiana (the hometown fallback.) Only Indiana offered money. Still didn’t seem like the best choice. BUT — when he was applying for jobs, he couldn’t get arrested in Indiana. They only hire their own. So if you want to work in Indiana, go to IU.

  228. Denver Dad – I have been to the Oakland Coliseum many times (mostly for baseball, but to a few Raiders games). I like it, too! I never noticed the lack of advertising, but I guess that is a good thing. There is definitely a lot more of it at AT&T, and at Levi’s stadium (haven’t been there!). They were calling it the “Big Bellbottom” last night on TV – I wonder if that name will stick?

    Sorry about the lack of water fountains. I guess they figure they have a captive audience who will be willing to pay a premium for a drink, no matter what it is! It is a lovely place to watch a game, especially when the weather is nice.

  229. Finn — if you’re sure you want to practice here, UH Law is in many ways a better choice than even one of the top 14. It’s probably a professional disadvantage that I’ve never played in the Ete Bowl.

    I don’t remember hearing about anyone getting merit money when I was in law school, ~25 years ago (ye gods) at a school that hovers around 25 on the lists. Either I was clueless or it hadn’t become as much of a thing yet — gaming the US News list was still in its infancy.

  230. MooshiMooshi, I’m actually eyeing a couple of mountain state directional Us as possibilities for my oldest — he likes mountains, he’s interested in geology although computer sciences is a more likely major, and they all take the WUE (western states tuition exchange) which the flagships may or may not, so are definitely affordable. So it’s interesting to hear your perspective on computer science at Podunk U.

    I was very happy at my Ivy and would be happy for one of my kids to go there, but I don’t think my oldest has established the record he would need to go there and I’m not so sure it’s a fit for him.

  231. HM- your comment re: your son’s interests mirrors our dinner conversation last night. One of my son’s friends wanted to know what to major in if you want to be a developer. My husband was telling him in his area (oil and gas) they don’t hire anyone who majored in programming. They want people who understand the seismic or geology stuff who also happen to be able to code. So if he chooses that route, tell him to keep oil and gas in mind.

  232. MBT, that is very interesting. It wouldn’t have occurred to me that, say, a major in geology and minor in computer science could be a good combination.

  233. So we’ve discussed what a “land grant” university is. Now what is a “directional” university?

  234. Milo – e.g.

    Southwest Louisiana St.
    North Texas
    Western Connecticut
    Western Michigan
    Eastern Washington

    There are probably 100s

  235. one of my favorites:
    Northern Arizona University – Nogales campus (Nogales being on the Mexican Border). Main NAU campus is in Flagstaff.

  236. One of my favorites is Eastern New Mexico University, also affectionately known as Enema U

  237. I think the money was all for LSAT scores as part of the gaming of the US News. The local law schools that have strong regional connections want to boost their rankings. LSAT scores play a part in that. I doubt he would have gotten financial aid for the top schools, but he probably would have gotten into some of them based on his GPA and LSAT. Financially it made more sense to stay local due to networking etc.

  238. HM – one of my friend’s sisters (an opera singer) is married to his son. Such musical awesomeness at family gatherings!

  239. Milo, they are non-main campuses of flagship State U like Wisconsin-Milwaukee or Colorado State-Pueblo.

  240. Northeastern is NOT a directional state U, any more than Northwestern is. Both are good private universities. I don’t know about Northwestern as much, but Northeastern is a very up and coming research intensive school, that is especially well known in engineering and for its excellent co-op program.

  241. I think Southern New Hampshire is a for-profit? It is mainly an online career college in any case

  242. MM –
    Milo said NOT Northwestern. I added Northeastern, Southern and Western (none of which are state schools). We fully understood what we were talking about.

    Oh, and lest anyone forget, The University of Pennsylvania is NOT a flagship state university.

  243. Source: snhu.edu

    Expanding the Boundaries of Higher Education

    Southern New Hampshire University is a private, nonprofit, accredited institution with more than 3,000 on-campus students and over 60,000 online students, making us one of the fastest-growing universities in the country. Founded in 1932, we’ve been relentlessly reinventing higher education ever since and have gained national recognition for our dedication to helping students transform their lives and the lives of those around them.

    We’re proud to provide affordable, accessible education that students can pursue on our 300-acre campus in Manchester, NH, over our innovative online platform or at our regional centers in Manchester, Nashua, Portsmouth and Salem, NH, and Brunswick, ME.

  244. Southern New Hampshire advertises all over some of the shows we watch on cable. The ads look just like ads for a for-profit, so I presumed that is what it is.

  245. Northeastern in on our radar (and perhaps should be on Houston’s) in part because they have been generous with merit aid to NMSF, apparently part of an apparently successful effort to boost their academic profile.

    Houston, what schools is your DS interested in? Has he looked at Rice, or does he prefer somewhere a bit further away? Did he like Vandy?

  246. My sister just informed me that Vanderbilt doesn’t have an undergraduate business or accounting major. They used to, but no more. I just thought that was interesting in a major university, but perhaps it isn’t that uncommon.

  247. Thanks for all the replies. Based in part on what I just heard from you, this is what I’m thinking now (subject to change):

    -If my kids can get into a top-tier school, and get significant financial aid from the school, it’s hard to see them not going there. If they don’t really want to go there, why apply? And perhaps they shouldn’t apply if we don’t think they will do well there, as opposed to just muddle through.

    -If they get in but get no aid, then we’d need to think really hard, and compare it against any aid offers from lower tier schools. But it seems that going to a top-tier school, and doing well, provides more options than a lower-tier school, especially on a national scale.

    -Local schools make a lot of sense for kids who know they’ll stay in the same area, but top-tier national schools provide more options outside the area. But who really knows that? Kids often leave local areas for school, career opportunities, or love. But for my kids, I need to keep in mind the fairly common path of upper tier undergrad, and local med or law school.

    -I need to look into the cost of flagship U law and med schools, especially relative to others. At least the cost of attending one of those schools could be mitigated by living at home.

  248. “Vanderbilt doesn’t have an undergraduate business or accounting major. ”

    When I was in HS, my original plan was to double major in accounting and economics. Looking for undergrad business schools, I discovered that most of the best business schools were graduate programs only (e.g., Stanford).

    One notable exception was Wharton.

  249. Finn – yes, that makes sense. You major in something (like accounting or economics or engineering) and then get your MBA.

  250. Finn – a few notes about medical school admissions. In general, students are well served by a high MCAT score, high GPA, and important extracurriculars. Major is not particularly relevant, in my experience (my major was not science-related, not even social science). Having meaningful extracurriculars (authorship on a published paper, leader of a campus organization, etc.) is easier at a SLAC, I think. I am not sure an art major at Flagship U can get a grant to do science research in the summer time that leads to publication — it is kind of the way SLACs work. Also, I think a student is likely to have more solid letters of recommendation from a SLAC, especially if they are not a science major – a theater major who just takes intro science classes at Flagship U has no one to write a personal letter.

    The State Us are good places to go to school. UH accepts 68 per year, with more than 20 applicants per slot. (9 of those may be from out of state). Tuition is 36k now (70 for non-residents). There is no state U for medical school that is a “sure thing” — even for its residents.

    All medical students are independent (I would assume this is true of law school, as well) as they have already received a Bachelor’s degree. I had to FAFSA every year, but only my own information. I got some grant from the school — which was highly unusual. Most schools offer only loans, with perhaps a bit of merit-based aid.

  251. DD, did you love the smell at AT&T Park? Those garlic fries are great, albeit expensive.

    Finn, the line was a mile long so we didn’t get any.

  252. I went to the annual training for my alumni interviews for my college.

    It is not any Ivy, but top 15/20 school.

    If you are a Latino from Texas, you’re in.
    Kidding.

    The stats are fascinating because they show a large drop in applicants from mid Atlantic, northeast and New England in the next ten years.

    They think this will impact small liberal art schools in western PA, upstate Vermont etc. the reason is that the growth in applicants from the U.S. is coming from California, and many of these kids aren’t interested in small, regional liberal arts schools. Also, these schools don’t have the money to give air of these kids the financial aid they would need to recruit and convince them to give up cheaper state schools. They think the growth from Chinese applicants will remain flat or drop this year.

    They think Sweet Briar is the tip of the iceberg for the future of small colleges.

  253. Davidson grad here. I loved every minute of it, and have been served well by the extraordinarily strong alumni network, but it’s gone through the roof in terms of cost. Hard to know how I would feel about our kids going there.

  254. WCE – Thanks for your thoughts about my niece. It is very likely that she would be a good teacher and that this is a prudent choice. Of course, her grandmother was a top notch teacher. Her mother was told from the day she was born that she should be a teacher, she complied and was fairly good at it but never really happy with it and dropped it when the kids came (at 40). The mom’s sister dropped out of high school, traveled the world, has had intermittent creative work and now sits on her couch doing facebook activism. The first cousins from that mom are a married hipster non college grad barista and a college fashion focussed senior waiting for her boyfriend to finish law school. So the in law auntie and her daughters don’t want her to get stuck in a prescribed family role as yet another compliant female, but we know that it is not our business and are silent after expressing our opinions to the mom once. However, I appreciate what has been said by many totebaggers above about gaining confidence in undergrad years in a well fitting SLAC – maybe that is the best way to expand her view to include many possibilities, even though that will exhaust the funds and future schooling will be on her.

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