Tuesday, July 20, 2010

The Value of Expensive Colleges

A recent study examined the "value" of colleges. Our local newspaper covered the story, saying:

Tuition last year at Bucknell University in Lewisburg was $40,594. ...

The university may have one of the highest tuition rates in the Valley, but it also ranked No. 2 recently among all liberal arts institutions with its graduates obtaining the highest mid-career salaries — an average of $115,000 a year. The average starting salary is $56,100.

The story, and a sidebar that accompanied the print version of the newspaper, essentially went on to say that despite the fact that Bucknell (and to a lesser extent, Susquehanna) was so expensive, it is a great value because the starting salaries of Bucknell (Susquehanna) graduates are so much higher than average.

This report and story are an excellent example of people not thinking through issues before releasing a study. Bucknell is an extremely prestigious school. It's students, on average, will be much more intelligent than your average college student and also come from much wealthier families than your average college student. These two factor's play a huge role into determining lifetime earnings. Of course Bucknell students will have higher average salaries, but to credit the institution with adding value to these students is off-the-mark. In fact, a study several years ago found that students who got accepted to Harvard but went elsewhere did just as well as those who attended Harvard.

As an educator at a private college, I am biased towards these institutions. I see first hand the opportunities our students, especially our good students, can get upon graduation. I also know that this is an amazing environment for a student to spend his or her college years. But to credit the increase in salaries to the institution is crazy. Perhaps a small part of the starting salary differences could be from a college, but smarter kids going into college will make more money upon graduation - regardless of where they attend college.

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