Is an Ivy League education worth the price?

Phelps Gate, Yale University                                Photo by Laura Monteros

There is controversy over whether the high cost of an Ivy League education pays off in the long run. While one might argue that a liberal arts education is not as much about monetary payoff as it is about expanding the intellect of the student, and that education is a process, not a product, parents who send their collegians off to an expensive university do have some hope of recouping the cost in better positions for their offspring upon graduation.

Attending Yale College, the undergraduate school of Yale University, will rack up $47,500 bill for room, board, and tuition for the 2009–10 academic year—and that doesn’t include transportation or personal expenses. Harvard comes in at $48,868.

The Ivies, however, have a commitment to affordability for their students and offer needs-based financial aid that can be very generous. According to the Yale University Office of Public Affairs and the Harvard financial aid website, families earning less than $60,000 annually do not make any contribution toward the cost of a child’s education. At Yale, families earning $60,000 to $120,000 typically contribute from 1% to 10% of total family income and Harvard offers further reductions in parental contributions for families with incomes up to $80,000.

Eric Schurenberg, a columnist for Moneywatch, wrote about his daughter’s college search and the choices before her. He cites studies that come down on both sides of the fence. A 1998 study by Alan Krueger and Stacy Berg Dale found that Ivy-caliber kids wind up making the same money whether they actually go to a highly selective school or not, while a 1996 National Bureau of Economic Research working paper by Dominic Brewer, Eric Eide and Ronald Erhrenberg, indicated that attending a selective private college not only paid off in the short term, but that the benefit may grow over time.

Either way, in the current economy, college graduates across the spectrum of schools are having difficulty getting any work, let alone the high-paying jobs that were available two years ago. A 2009 Yale grad who has not been able to find employment since leaving the ivy halls says, "It is even hard for some graduates to find simple jobs like employment at a cafe or museum. Many of these employers are hesitant to hire over-qualified grads who will leave the second that the economy gets better."

One parent, responding to a Yale Daily News article on the Schurenberg column, comments, “The offerings—not just academic, but social, relational, artistic—are phenomenal. My West Coast prejudices against the Ivies disappeared when my offspring attended Yale and I saw the differences….Yale can actually be cheaper than other universities. Two of my kids have huge student loans they took out to attend their private universities. Only my Yalie and the kid who went to a public university have come out loan-free.

“…the travel expenses were very hard on us, so in the long run Stanford might have cost less and U.C. Berkeley would have been next to nothing. The opportunity to live on the other coast, the Ivy League experience, and meeting the people my child met were more than worth the plane tickets (and credit card fees), though….Yale is absolutely worth whatever sacrifices we had to make.”

Schurenberg concludes with an observation that might resonate with many parents: “…I’m going to join the anxiety-ridden hordes and gamble that an expensive education is a good investment in my kid’s human capital. Does it burn me that so much of my tuition dollar will be spent on fancy gym facilities and gourmet dining halls? Don’t get me started. Is there a hint of parental vanity in all this? Guilty as charged. On the other hand, my daughter earned the grades that put her in the running for these colleges. So she did her job. Now it’s my job to fund the education she earned.”