Over at Free Money Finance, FMF and his readers are having a field day excoriating a young woman, one Cortney Munna, and her family for having made the apparently stupid decision to borrow $97,000 to send her to an elite private school, where she took a double major in the liberal arts (religious and women’s studies). With a starting salary after graduation of $46,000—not bad, we might add, for any wet-behind-the-ears kid, even though she’s living in extravagantly pricey San Francisco—she now is looking at a lifetime of student loan payments.
The most generous of FMFs readers suggest that it’s difficult for young people to understand the implications of long-term debt, given the scarcity of practical education in personal finance and budgeting to be found in the public schools, or that the American public is being sold a bill of goods about higher education. Most, however, go in for the kill, ranting about the young woman’s naïveté and her family’s stupidity.
Well, you know… When I was a young thing and wanted a career in nonfiction writing —wanted to be the first female John McPhee—I worked like crazy at it and got published here, there, and everywhere, often in the national markets. And I got a Ph.D. from a state institution. After I’d been banging my head against the steel walls surrounding the top, high-paying U.S. markets, such as The New Yorker and The Atlantic, a fellow named Norman Sims published a book called The Literary Journalists
The headnote for each article included some biographical details about the author. As I leafed through the book, I realized that an awful lot of those folks had gone to Ivy League or “public ivy” schools: Princeton, Berkeley, Yale, Vassar, Brandeis, Columbia, Harvard, Colgate. In fact, of the 14 senior, mid-career, and junior authors whose work was collected in Sims’s first book on literary nonfiction, only TWO had attended anything other than top-ranked prestigious schools (University of Texas and Union College), and one of those is a private liberal arts college.
As they used to say at Ms. Magazine, CLICK! The light went on. For entrée into a high-powered career, four years at an Ivy League trumps ten years at a public university. While it’s not impossible to break into the upper ranks with a degree from an ordinary, relatively inexpensive school, neither is it likely.
So one might want to think twice about criticizing this family for wanting to get their child into the “best” school possible. And as for blasting Cortney Munna’s choice of majors: At Union, 25% of students major in social sciences, 10% in psychology, 10% in the liberal arts, 10% in biology, and only 11% in the potentially more lucrative engineering. At Yale, the most popular degrees are in social sciences (25%), history (12%), interdisciplinary studies (10%), biology (8%), English (6%), visual and performing arts (6%), and area and ethnic studies (5%). Of those who go to graduate school within a year after leaving Yale, only 1% go into MBA programs.
In 2008, according to Bloomberg Business Week, the median starting salary for a Yale graduate was $59,100. By mid-career, earners with Yale degrees typically made $326,000 a year, while graduates of Kent State, an excellent public school, earned an average of $124,000.
So, I’m afraid that the reasoning behind the family’s ambition to send Ms. Munna to a top-ranking school is not so all wet, after all.
Probably the issue here is that unless your family has the money to foot most or all of the bill for an elite school, you should downsize your ambitions and admit to yourself, right out of the box, that if you can’t pay for an elite degree in cash or are unwilling to shoulder a student loan the size of a house mortgage, you’re unlikely to have an elite career. After all, a salary of $124,000 is not such a bad fate. Ms. Munna and her family had only one failing: their ambitions were too high for their social and economic class. 😉
Well, this is not exactly a scientific study! For fiction writers, I think it may also be different. Look up Tim Gautreaux and Bev Marshall–two colleagues who’ve had tremendous success in fiction writing. The people I know who went to prestigious MFA programs…at best, they are teaching in MFA programs somewhere.
I read that before the meltdown, 30% of Harvard, MIT, and CalTech grads were heading to Wall Street (these may have been the quants one hears about). I don’t think all that many were seeking advanced degrees in the humanities or social sciences. For the largest percentage of PhDs in the making–look at Reed College.
Based on personal experience & observations of family and friends, I must say that going to high ranking universities have its advantages. Not only will one receive a good education, he/she will meet people who will (most likely) also do well in their chosen career.
Many companies do not hire based on receiving a resume from an unknown person. Many people I know have gotten their foot in the door because they share similar backgrounds (i.e. alumni) or know someone who knows someone…
That’s one thing many people do not realize about a college education. You’re not there simply to learn and get a degree; you’re also there to build up a network. I don’t mean it in a calculative or manipulative way – young people would definitely make friends in class or in college dorms.
@ Frugal: No, it certainly isn’t scientific, nor was it meant to be, having started as an off-the-cuff comment on FMF’s post. On the other hand, I have seen studies that show in general that liberal arts majors (irrespective of their institutions) start at lower salaries than majors in technical subjects but by mid-career out-earn them. As it develops, large corporations display a preference for executives with liberal-arts training, presumably because such training develops skills in logical thinking, communication, and decision-making.
I’m not saying that it’s bad to send your kids to public schools. Only that Ms. Munna’s family was reasonable in thinking it was worthwhile to try to get her into what they perceived as “the best possible” school. In retrospect, it looks like an idiotic decision — the kid is now saddled with almost $100,000 of debt, and her gross income isn’t even a quarter of that. But at the time, when they were trying to figure out what to do about her college education, their decision was rational.
@ Jersey Mom: On the other hand, vast public universities also present plenty of networking opportunities. In the spring semester of 2009, Arizona State University had enrolled over 67,000 students. Surely a few among that throng will grow up to be heavy hitters and people influential in hiring decisions.
To make it easier for such students to find each other, ASU has created an elite school-within-a-school by building a separate, cloistered minicampus for the honors students, where they live, eat, and go to class apart from the sweaty, alcohol-soaked masses. Thus, clearly if your grades were good enough to get you into a $100,000 degree program at a private school, they could get you into an elite “community” of future (presumably) captains of industry and government, for a lot less money at a public school.
The University of Texas IS a top-ranked, nationally competitive university . . .
@ annk: Yes, Texas IS an excellent university. It’s a large state-operated institution, quite a different atmosphere from a private college. In 1985 it was among the original “public ivy” institutions, and it remains on the list to this day.
I agree that there is a benefit in going to the elite schools if you have have high career ambitions. I have a few friends who did so (even some coming from modest family incomes) and it paid off in the end because they were focused in their career choices.
I have learned, after the fact, that if your chosen field requires a lofty education, and you have aspirations of being BIG, then it is worth it to pursue the elite schools. Especially in the arts fields.
The key is being focused and knowing what you want, though very few 18-year-olds fit this description. I know I didn’t!
I know a lot about this topic, but will restrain myself. I returned b/c your response to JerseyMom is spot on. Both my kids got National Merit Scholarships–their peer groups in their colleges of choice (both state schools) are an impressive bunch. In fact, when my daughter was interviewing for a program at Alabama, we were among the poorest people there! A few of the kids who declined the program got into-yes-Harvard; others turned down Ivies for Alabama. Yes-it happens.
The student in the article went to NYU–a genre of college that I think is a poor value. It’s big; many of the eminent teachers are part-time etc. If you’re going to spring for a private college, go to a SMALL one, where the teachers will be busting their butts to meet your every need.
I’m pro- elite Small Liberal Arts college. Thankfully the one I went to is also well-endowed. They accepted and funded me, so I only had to get subsidized federal debt (which my parents paid… made not having a VCR, Atari/Nintendo, or microwave as a kid worth it).
Without that degree I could not have gotten the elite graduate degree I have. Without the elite graduate degree it would have been harder to get a tenure-track job on graduation.
I might still be earning more though, and I would probably have a higher net worth from not wasting all those income earning years in graduate school with a piddly stipend. And without a tenure track job I’d be forced to work in the private sector, which pays a lot better.
Wow, “their ambitions were above their social and economic class.” Don’t you think that’s a tad snobbish?
Maybe the debt is worth it to her because she agrees with you that she’s in line to earn the big bucks through all that groovy networking. Maybe she wans to IMPROVE her “social and economic class.”
@ BagelGirl: Alas, there’s no emoticon with a mischievous frown and a wicked grin to evoke irony or sarcasm.
I’m the guy who edited The Literary Journalists, which you were kind enough to mention. At the time I published the book, I noticed the same educational backgrounds for the authors that you found, and it was slightly embarrassing for me. I’m a professor at the University of Massachusetts Amherst, a public university. Since then, I’ve tried to figure out what gives private colleges and universities an advantage. In Amherst, we are surrounded by top private colleges–Amherst, Smith, Mt. Holyoke, and Hampshire. Their faculty members are not necessarily better than ours; they do less publishing; they are not necessarily better teachers. But there is one enormous educational difference. In the private colleges, class sizes are small compared to those of public universities. I think that makes all the difference, especially if you are trying to teach writing. Small class size is one thing money can buy, and it’s probably worth it.
Hahaha. I know what you talking about. When i was younger, sometimes people from USA or other parts of the world would ask me what high school i went to. Me, not knowing what the question means would name the location or number of school. They would blink in reply staring at me. Then ask what was the school called. I would say it is called municipal school in such and such location. More blinking. Then they would say: so it wasnt private school? Here came my turn to blink and stare. Then i would say: there were no private schools in USSR. Then they would blink some more trying to process info and leave. And i would stand all puzzled :)))))))) Ones i got this question: but didnt your parents cared enough about your future to send you to a good school. To which i said again: all the schools were pretty much the same, there were no other schools.
it took me a very long time to understand this believe.
Perhaps those elite schools ON AVERAGE admit people who are better prepared for success, i.e., higher SAT scores, from better high-schools, from families with experience of success, better connections, etc. Not necessarily SMARTER kids, and not necessarily better college education.
Please note I said AVERAGE – everyone can quote the example of the kid from nowhere who went to a poor-quality college and did well. When I left my inner-city public high-school to go to the local average public college, the principal told my mother “He would have done well anywhere”, and I did! But on average, the kids from those schools don’t make it through college, or into high-paying jobs.
On the other hand, maybe being in the private school reinforces the already-good (or not so good) students, so they do even better.
@ Frugal Scholar: Your posts on this subject have been great, and full of good common sense. Hope you’ll add more, if you feel so inclined.
@ Nicole: Most of my classmates in graduate school ended up in tenure-track jobs–some of them not at the greatest schools, but still…tenurable. On the other hand, many a Ph.D. from an elite institution also ends up far from those ivied halls: friends who chair English departments at the community colleges here say that every time they advertise an opening for a full-time teaching position, they get applicants from Harvard, Yale, Princeton, and the like. You don’t need a Ph.D. from Harvard to teach freshman comp to graduates of Arizona’s low-rated K-12 system.
@ Norman Sims: I’m honored that you visited! It’s true, smaller classes count, particularly in teaching writing. At the Great Desert University, I once taught a technical writing class — online, an arrangement that requires about twice as many hours of work as an in-class section — that had forty-two students!
Here, too, the community college has the advantage over the public university: Maricopa County’s classes are capped at 20. Well, they were: so many students are fleeing the high tuition at GDU that the surrounding community colleges, coping with 15%+ jumps in enrollment each semester, recently lifted the caps to 25, still lower than GDU’s, which was 30 when I was there and has been raised since.
@ Marina: Some Americans are amazingly provincial. 😀
@ Mark: My ex- went to Stanford. He and some of his classmates observed that once you’re in, you don’t work any harder there than at any other school. “Average” is a deceptive term. I had a student who had come to GDU with an AA from a local community college. Did fine at our backwater west campus, where the competition was less than bracing. Then got himself into the MBA program at Oxford. LOL! He used an essay he wrote for my course as his entrance essay. Smart students are smart students, no matter where they are. One takes from an education what one puts into it.
While there are a variety of different issues relating to which college to attend at which cost, I think this comment is key:
“That’s one thing many people do not realize about a college education. You’re not there simply to learn and get a degree; you’re also there to build up a network.”
I certainly didn’t realize that, and didn’t even come close to getting what I could have gotten from my upper division classes at ASU — most of which contained anywhere from just one student to 17, with an average if 8 or 9.
Would I have realized that if I’d gone to an Ivy League school? I doubt it.
Funny– The econ market is different than the humanities market. The econ market is very rigid and structured for people just graduating. Applications are due Nov 15, interviews are done at a conference (right after the MLA) in January, flyouts are Jan-April.
The old boys networks is also very strong. If you have a degree from Harvard, MIT, Princeton, or Stanford, if you don’t get a tenure track offer on your own, your adviser will pull strings for you in April to make sure you get one, or that you will at least get a prestigious post-doc that will get you a t-t job the next year or maybe a stable government job. (They do strongly encourage some people to go directly into consulting if they don’t think academia is right.) People from less prestigious schools often don’t have those kinds of networks and employment is not guaranteed. They’re still probably better off than the average art history PhD though.
Not everyone stays in academia, but they’re all doing what they want to be doing, even if it’s leaving a TT job at Brown to work on Wall street. The name on my degree opens a lot of doors that I would have a very difficult time opening without. Sure, someone like John List has success now, but it took him 10 years and about a million proven publications before he got a University of Chicago job; he would have had that a lot easier and a lot sooner if he’d gone to a top 4 graduate school instead. In this field you have to work a lot harder to get to the same place if you don’t have the elite degree. Yes, lots of people from non-top schools get TT positions but they also sometimes face unemployment (even from the private sector) their first year off the market which is unthinkable for a top 4 graduate.
I’m not sure that a PhD helps get a community college job in economics because the majority of people with CC jobs in economics do so with masters degrees, not PhDs. If you’re looking for a CC job with a PhD that sends a different signal than if you’re doing the same thing in the humanities. A PhD from Harvard might even hurt your chances of getting CC job because the employer might worry that there’s something wrong with someone who has that degree who is seeking a CC job instead of making 6+ figures in industry or teaching at a 4 year school. If community college teaching is the goal, then an Ivy PhD in economics is not necessary.
Re: Mark– There’s a lot of evidence (from economists) controlling for selection effects suggesting that you’re right. Better schools select people with better inputs, whether that be measurable inputs like AFQT scores or unmeasurable inputs such as ambition. There’s no difference in outcomes once those are controlled for. But the output in these regressions is always income. Teaching in a graduate program, I know that my students who went to the large state school did not learn to think anywhere near as well as the ones who went to small liberal arts schools or honors colleges within state schools. The former come in thinking that memorization of facts is the end all and be all of learning. It’s really difficult getting them out of that mindset the first semester and the cognitive dissonance is really hard for them. So I’m thinking that maybe income isn’t the best output measure for the value of a college education.
Now I need to get to work if I want to actually keep my tenure-track job…
@ funny: You said ““Average” is a deceptive term.”, and went on to mention a student who did well. That’s exactly why I said “average” – obviously not everyone in the school is average … but on average they are!
You also said “maybe income isn’t the best output measure for the value of a college education”. It’s probably used because it is easily quantified.
Probably the best measure is “total lifetime satisfaction” or “happiness”, or something else equally difficult to measure. There are also studies which show that higher income does not correlate to higher satisfaction/happiness, once you get beyond a certain threshold (somewhere just above hungry and homeless).
For tax-subsidized education, perhaps the best measure is total “contribution to society”, which is something more than “taxable income”.
@ Mark: Exactly so! Some things (make that “most things”) are more important than money.
The last study I saw on how “happiness” correlates to income suggested about $40,000 was the threshold above which people could focus on satisfaction with life rather than mere survival. That’s significantly above hungry and homeless, but it’s a whole lot less than many Americans perceive as a decent income. When I was making $60,000 I was told my pay was “low.” 🙂
Kent State will sell you an online bachelor’s degree. Live at home with Mom & Dad, or keep your job wherever you are, and voila! Someday you earn $124K. Wonder if their bachelor’s is any better than huckstery schools like University of Phoenix or those?