It frustrates me that these ROI calculations are done as comparisons between two separate populations, each with different characteristics like raw intelligence or work ethic. Return on investment should be looking at treatment effects only.
For example, it may be that science minded people have higher salaries in general, and those people also tend to apply to technical schools. In that case, the real ROI is from being technically minded, not from attending a school that focuses on that.
A better test would be looking at kids that got into both Harvey Mudd and MIT and separating them into populations based on where each kid decided to matriculate. That way you're factoring out the admissions bias.
Malcolm Gladwell wrote an article in the New Yorker about the difference between state schools and Ivy League schools that actually looked at treatment effects. And he found that there were none for the majority of the population.
I haven't seen one of these done for college vs. no college, but that would be much more valuable than misleading shit like this.
Yeah these comparisons are typically done incorrectly, as you note. Although Gladwell is often wrong, in this case he happens to agree with most research on the subject, in that the effects are small if at all present. However, it's worth noting that doing a study properly is difficult and there are issues with every single one, so we can't really be too confident of the result.
A similar argument shows that the "$2.3 million" benefit of college over high school is vastly overstated, although there is actually some effect in this case.
I really want to see one for no college vs college. People who got into MIT/Ivy Leagues/etc but decided not to go to college vs people who did go to the elites. Would finally stop people from doing the extraordinarily frustrating dual quotation of "going to college matters, they studied people who didn't go to college and people who did and those who did make way more money" + "but which college you go to doesn't matter, they studied people who got into ivies and went to state schools vs people who went to ivies and there was no difference!"
In the first case you're using two separate populations, and in the second you're not. Assholes.
EDIT: Actually fascinating that they found 191 schools with negative ROI using their ranking system. Suggests that the school really does matter - getting a simple degree isn't what differentiates you anymore, it really is where you get it from. Or perhaps those students just can't match par with the 75th percentile of high school grads, as that was their ranking criteria.
Of course HMC tops the list. It's free for everyone. Reminds me of that one (Forbes?) college ranking list that had West Point as the best school to go to, primarily because they factored in cost as a major ranking determinant.
And yes, everything's stacked in the favor of elite schools. They make you more money, and they cost less. I had a full ride to Harvard and so did everyone else whose parents made less than $80k. At state school I would have been fucked over twice.
$180,000 and under, all you have to pay is 10% of your parent's income for Harvard. Above that it scales, but still you have to be well in the $200s+ before you have to pay the full admission price. Similar for Princeton/Yale other schools with a shitload of money, though I'm not sure of the exact numbers.
Given a median household income of ~$50k in the US, I'd say yes, elite schools are almost unequivocally cheaper across the board than state schools. Common misconception held by most.
Shepherd University's is 4,500$/year tuition and Harvard's endowment is vastly superior to most Ivy's which enables them to have significantly lower tuition. Also, the income of parents sending their kids to collage is significantly better than the national average household income.
As a recent HMC grad: It's very much not free for everyone. Many of my classmates graduated with fairly hefty loans which will take many years to fully pay off.
Olin is free for everyone, and there's a wave in the elite schools to set up payments so that students don't leave with loans. Mudd has a relatively small endowment, so probably couldn't function under that model.
In my own case graduating with a degree resulted in an immediate 45k per year pay bump, and I don't think that was particularly exceptional. Their 30 year ROI sounds hopelessly low by an order of magnitude (at least for Eng and bus)
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[ 2.7 ms ] story [ 47.4 ms ] threadFor example, it may be that science minded people have higher salaries in general, and those people also tend to apply to technical schools. In that case, the real ROI is from being technically minded, not from attending a school that focuses on that.
A better test would be looking at kids that got into both Harvey Mudd and MIT and separating them into populations based on where each kid decided to matriculate. That way you're factoring out the admissions bias.
Malcolm Gladwell wrote an article in the New Yorker about the difference between state schools and Ivy League schools that actually looked at treatment effects. And he found that there were none for the majority of the population.
I haven't seen one of these done for college vs. no college, but that would be much more valuable than misleading shit like this.
edit: summary of the Gladwell article here http://notesandrestsmakemusic.wordpress.com/2011/09/14/the-v...
A similar argument shows that the "$2.3 million" benefit of college over high school is vastly overstated, although there is actually some effect in this case.
In the first case you're using two separate populations, and in the second you're not. Assholes.
EDIT: Actually fascinating that they found 191 schools with negative ROI using their ranking system. Suggests that the school really does matter - getting a simple degree isn't what differentiates you anymore, it really is where you get it from. Or perhaps those students just can't match par with the 75th percentile of high school grads, as that was their ranking criteria.
So the list is dominated by California and east coast schools where salaries are highest.
And yes, everything's stacked in the favor of elite schools. They make you more money, and they cost less. I had a full ride to Harvard and so did everyone else whose parents made less than $80k. At state school I would have been fucked over twice.
Given a median household income of ~$50k in the US, I'd say yes, elite schools are almost unequivocally cheaper across the board than state schools. Common misconception held by most.
Part of this is Age: "Households headed by persons between the ages of 45 and 54 had a median household income of $61,111 and a mean household income of $77,634." http://en.wikipedia.org/wiki/Household_income_in_the_United_...
And part of this is education: http://en.wikipedia.org/wiki/File:Income_Education_91_to_03.... with a higher percentage of people with a collage degree sending their children to collage.
Olin is free for everyone, and there's a wave in the elite schools to set up payments so that students don't leave with loans. Mudd has a relatively small endowment, so probably couldn't function under that model.
EDIT: Ahh, I was thinking of Cooper Union.
In my own case graduating with a degree resulted in an immediate 45k per year pay bump, and I don't think that was particularly exceptional. Their 30 year ROI sounds hopelessly low by an order of magnitude (at least for Eng and bus)