With more than 4,000 degree-granting institutions in the United States, choosing a college can be agonizing for parents and students alike. The pressure to choose the right school among all these options, then get accepted and figure out how to pay for it, can be intense. But does it need to be? Why not just enroll at the highest-ranked in-state school that will accept you and be done with it? That simple choice serves many students well. But here are some other factors to consider.
Mid-Career Earnings Can Vary by School
PayScale’s College Salary Report provides information on mid-career earnings by the school to help students figure out where to earn their degree, what major to choose, and what profession to enter. The report is based on millions of alumni salaries from thousands of U.S. colleges and universities. The top three schools — Harvey Mudd College, MIT, and tiny Samuel Merritt University — focus on science, technology, engineering, and health sciences, so it’s no surprise that they have the highest salary potential.
PayScale also provides data on the annual return on investment of attending specific schools. Stanford University, for example, has an annual ROI of 7.4% based on a total four-year cost of $255,000 and a 20-year net ROI of $811,000. About half of graduates are in STEM fields, and the gender breakdown is 60% male, 40% female. So you can’t just look whether the school seems to pay off at a broad level, you have to look at whether it’s likely to pay off for you.
If you want to become a graphic designer, you should be looking at which schools turn out the highest-paid graphic designers. You might find graphic designers who graduate from a certain school earn a lot more — but that might be due to a higher cost of living in California than in Kansas. When you find a big difference in mid-career salaries for two schools in the same area, then you might be getting closer to information that can help you choose the best college for you.
Let’s dig deeper into how college selection might affect you, specifically.
Choosing a Selective College May Matter More for Women
Women who attended a college with a 100-point-higher average SAT score were five percentage points more likely to earn an advanced degree and had 14 percent higher earnings compared to women who attended a less selective school. For men, there were no significant effects. This is what three economists described in their working paper (a pre-publication version of an academic article) written in 2018 and revised in 2019, “Elite Schools and Opting In: Effects of College Selectivity on Career and Family Outcomes.” Women experienced superior outcomes from attending a more selective college because they ended up working more. They postponed marriage and had children later. But their hourly earnings weren’t higher than those of women attending less selective schools.
Selective Schools May Give an Extra Boost to Students from Low-Income Families
A different study found that elite colleges have the highest rate of propelling students from the bottom 20 percent to the top 1 percent of income. This study is described in the 2017 working paper “Mobility Report Cards: The Role of Colleges in Intergenerational Mobility.” The study didn’t identify causation, only correlation, but it’s an interesting one. The study also found that certain mid-tier public universities are highly correlated with moving students from the bottom 20 percent to the top 20 percent of income. These universities may be a more viable option for moving up in the world, since students whose parents are in the top 1 percent are 77 times more likely to attend an Ivy League college than those whose parents are in the bottom 20 percent, according to the study.
Lower-income students lack the business and social connections that higher-income students have. Still, they can make those connections at elite schools, observes staff writer Derek Thompson in his Atlantic article about college admissions, which cites the two studies mentioned here. He concludes that affluent families shouldn’t stress out so much about what college their kids attend, and selective colleges can help increase earnings for lower-income students (many of whom are minorities) and women in particular.
Selective Schools Have Higher Graduation Rates
Students who need extra support — who might be in danger of dropping out if they don’t get that support — can benefit from attending a more selective school if that school has a healthy graduation rate. Getting into a specific school doesn’t matter if you drop out and don’t earn a degree, since the most significant leap in lifetime earnings comes from having a college degree and not just a high school diploma, according to data from the U.S. Social Security Administration.
Overall, graduation rates are substantially higher at nonprofit institutions (i.e., private colleges) than at public or for-profit institutions, data from the National Center for Education Statistics show. The difference seems especially important for students who are black, Hispanic, Pacific Islander, or Native American because they graduate at far lower rates than white, Asian, and non-resident alien students.
Still, these are broad statistics, and highly ranked public institutions can have better graduation rates than poorly ranked private schools. Taking the time to review the specific graduation rates for all schools a student is considering — including majors or departments within that school — is essential.
U.S. News and World Report provides data on four-year graduation rates. Surprisingly high on the list? Babson College in Babson Park, Massachusetts, at No. 6 with an 89% graduation rate. The University of Massachusetts at Amherst has a 71% graduation rate. But the University of Virginia, a public school, also has an 89% graduation rate, on par with the Ivies.
Certain Companies Recruit from Certain Schools
Students who have their eye on working for a particular company after graduation may have a better shot if they attend a school that the company actively recruits from. McKinsey, the leading global consulting firm, has a website where students can see its relationships with individual schools. Look up Mississippi Women’s College, and you will find, well, nothing. Look up Harvard, and you will find pages geared toward six different types of Harvard students, from undergrads to law school students. It’s not that McKinsey doesn’t accept applicants from any school — they do — but it seems like a definite advantage to attend a school that already has an active recruiting relationship with the firm.
Similarly, a 2014 LinkedIn analysis by Business Insider deputy editor Drake Baer found that Goldman Sachs had large numbers of employees who graduated from specific schools. Topping the list was New York University, the London School of Economics, and Cornell University.
Factors That Matter Besides Pay and Prestige
The experience you expect to have by attending a particular school — the traditions, the sports, the types of students you will meet, the size — are also important considerations. Attending college is not just about academics, career potential, and salary potential, though all of those factors are important. It’s about choosing an environment where you can thrive, and that might mean attending a school because you want to stay close to home (or go far away), because it’s less expensive, because you want to play Division I volleyball, or because it just feels right.
So does it matter where you go to college? Of course, it does, but maybe not as much as high school students or their parents think. It is only one of many factors that will influence your happiness, your career, and your adult life.