As families begin to sift through their student’s college acceptance letters, they are weighing the pros and cons of each college. There are many factors to consider, but the cost of the education is usually at the top of the list. In America, the highly selective schools or elite schools cost over $300,000 for a four- year diploma and the cost is inflating at 5% each year. Is it worth it?
According to a WSJ article on Jan. 31, 2016, “Do Elite Colleges lead to higher salaries?” ….It depends. After extensive research, the WSJ found that diplomas from prestigious schools boost future earning but only in certain fields.
If your student is pursing the prestigious STEM degree, (STEM = Science, Technology Engineering or Math), the school selection makes no difference at all. The difference in wage earners, 10 years after graduation, from an elite school with at $300,000 price tag or a less selective school with a $90,000 price tag is insignificant. Salary’s and gainful employment are exactly the same.
If your student is pursing a business or liberal arts major, the prestigious schools do make a difference. The difference in wage earners, 10 years after graduation, from an elite school or a less selective school is upwards of 20%. The study notes a few different factors but most notably is the alumni and reputation the schools.
The reason we send our kids to college is so they can get a job, earn a wage, and support themselves and their future lifestyles. College is an investment and for all investments, one should strive for the highest ROI or return on investment. When considering the financial factors of a college education, you want to make informed and realistic decisions. These decisions will have a significant impact on your students, not to mention mom and dad’s, financial futures.