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Most parents today do whatever it takes to pay for the college of their kid's choice. They think it's their duty to give their kids an advantage in life. But is there really an advantage to an expensive college?
On the parents side there is really no advantage. The parents are often left in a financial disaster after they've taken a second mortgage, liquidated their 401(k), and even taken second jobs. And now a study has been released by the National Bureau of Economic Research that answers the question "Is there an economic advantage to attending a selective college?"
The research team tracked the 1976 freshman class of 30 schools ranging from prestigious Yale University to public schools such as Pennsylvania State University. They compared the earnings of students who attended such prestigious schools with kids who were accepted to those schools but chose to attend the cheaper schools.
The results are not surprising if you think about it. Based on SAT and other scores, the smart talented kids who attended no-name schools, are doing just as well in their careers as the kids who chose the Ivy League schools. The only difference: the kids who went to the cheaper school aren't as far in debt.
Starting your life after college is hard enough without having to worry about paying $40,000 in school loans when you only make $30,000 a year. Keep in mind also that a degree from Yale doesn't ensure your child's success. An employer is more concerned with your child's ability to do the job, than where their degree is from.
If your child is bright, it doesn't matter what school she attends, she'll likely do well. Evaluate the merits of the school your child wants to attend against the costs and make an informed decision.
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