This time of the year, excited seniors (and nervous parents 
) are filling out applications, polishing essays, feverishly searching for scholarships and starting to tour different college campuses. One thing I notice in the college boards is that people automatically assume that the Ivy league schools are out of reach for their budget. Why? I want to throw my 2c on why I think Ivy league schools might cost much less than a public school in some situations.
First lets see what an Ivy league education can get you?
- Higher pay potential : There are lots of studies that provide data showing that going to an elite school or a more selective school does provide you with much higher pay potential. The following chart is the result of the data collected by payscale.com
- High endowment : A lot of students going to these schools are rich and they bring in a lot of money. Even at the top of the recession, Harvard had more money than most of the public schools. More money means more financial aid to attract the best students, hiring good professors, more funding for cutting edge research.
- Great financial aid packages : This goes with the high endowment, but I feel this merits some attention. I will go into details about the financial aid packages offered by these Ivy league schools in the money matters section below. For low and medium income families Ivy leagues offer some of the most exceptional financial aid packages among the top schools in the nation.
- Other known advantages include : Brand/Prestige, Alumni network and rub shoulders with the best and the brightest
What are the down sides of an Ivy league school?
- High price tag : When you look at just the tuition, living expenses and books, ivy leagues can cost $200,000 or more for a 4 year degree.
- Limited major : Ivy league schools might not have a variety of majors offered by the other state/public schools.
- Other disadvantages include : Cut throat environment, oversized egos of many graduates from ivy leagues
and it could be very difficult to get into.
But if you do get into an Ivy league school, should you choose to go to one or not? What will be your deciding factor?
To Ivy league or not – Money matters
Lets talk money first. Whenever the talk turns to Ivy league education, the first disadvantage quoted is – it is too costly, you will be better off going to a public state school. This is NOT true for every one. For example, I live in CA. CA has some of the best state schools, no question about that, but we are talking about money here. Lets assume there are 2 families who earn $80,000 and $120,000 respectively, which is a decent salary in CA and puts you in the middle class category.
| School | Income of $80,000 fees | Income of $120,000 fees |
| University of California (System wide) | $26,980 | $26,985 |
| Harvard | $8,000 | $16,000 |
| Yale | $6,467 | $16,800 |
Source : The bottom line from the project on student debt
As you can see it is better for a person in CA (if everything else favors the Ivy league) to go to Harvard or Yale. If your income is even lower than $80,000 the tuition for Harvard or Yale goes down as well. (Edited to add : The parental portion of the EFC is waived for students with family income of $60,000 or less, so you will essentially pay nothing or very little compared to other schools). Even if you end up with more expected family contribution (EFC) than you can afford, you could go talk to the financial aid counselor and ask them to consider your situation. This holds true for any school, Ivy league or state. The the median debt of a graduating senior at Harvard in 2009 was $8,100, one-third of the national level. According to the U.S. Dept. of Education’s recent Cumulative Four-Year Repayment Rate by Institution a lot of public schools top the student debt amount. I am not saying going to an Ivy league institution always costs less than state schools. All I am saying is it can be surprisingly inexpensive to go to an Ivy league, if an Ivy league education will be beneficial to you future.
My thoughts : Apply, see what financial aid package you receive, talk to them and then decide.
Resources : Check out the Project on Student Debt website to see the list of schools that have pledged to reduce student debt and what they are doing about it.
A good place to start looking for other scholarships is Fast Web.
To Ivy league or not – Major matters
Ivy league schools are not the best by default. It depends on what major you want to take. If it is economics or law or some other major that the Ivy leagues are very strong in and will provide you with a good foundation – either through the exclusive hiring or the right contacts, then by all means consider them. But if your interest is in engineering or computer science for example, you might be better off with public schools that are strong in this area. You have to decide where your interest lies and then decide which school is best for your interest. If you don’t know what to do in the future and would like to explore, again public schools with lot of options, might be best. Later, if you end choosing a major that an Ivy league school would be best for, you can always try to transfer.
My thoughts : Based on your major research that specific dept. in each school and depending on how strong the dept. is make your decision.
To Ivy league or not – Mindset matters
Not everyone thrives in a cut throat environment. You might be someone who likes to compete with yourself and not others. That is perfectly fine. Also if you are not going to be using the Ivy leagues to their full potential by making powerful friends, then it might be better to go to a school that you will better fit into. Each of us is different, we thrive in different environments. For some it is a big school, for some it the intimate setting that develops them. There is no right or wrong way to do these things. We just have to pick the school that is best for us. After all, schools can get us only help us to a certain extent beyond which our life is in our hands. If you pick a school for all the wrong reasons, you might end up with a fancy degree but no satisfaction in life.
My thoughts : Pick a school based on your personality and what drives you, not just statistics.
The bottom line
There is no single best decision. The selection of college depends on what you want to do later in life and your personality. If you think an Ivy league education might be better, don’t be afraid to apply. They can be surprisingly inexpensive and if you get an opportunity to go to a good department in an Ivy league, I think you should – at least explore all the financial possibilities before assuming it is very costly.
The above is based on my collection of data and my opinions. If any of this is incorrect, please pitch in. If you went to an Ivy league (or other selective schools) was it worth it? Would you recommend it for others? Why/why not? If you think Ivy leagues are not worth the money, why do you think so?
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Is the table with the comparison between California, Harvard, and Yale the overall tuition? International tuition is over $10,000 a year, but for province residents is as low as $3,000 or so a year. Out of province residents is about halfway IIRC. This is subsidized through higher taxes though, and higher rental costs ( there are no dorms, so people rent apartments or stay at home with their parents).
As an aside, I don’t consider it necessarily fair that “expected parental addition” is taken into account. Some parents may contribute to their children’s education, while others do not care. Those students are then doubly penalized, as the state assumes that they are receiving help from their parents when they are not, which makes it harder to qualify for aid and loans.
@Kevin, no these are not International rates. International rates would be much higher I suppose and they have different financial aid packages for international students.
I had it in the table as a separate column then took it out as the table became too long and wordpress ate half of it, but completely forgot to add it in the text below. Thanks!!! As a returning student, I guess you now clearly know what you want to do as well… that is a HUGE advantage. Good luck!
@Kris, very true about the expectations of parents to pay. A bank loan would have cost you a lot in interest? I totally agree with choosing a school with variety of programs, I was fortunate enough to know what I want when I was 18 but my husband is still trying to figure out… and he is 29 now. Don’t know how to handle that, he is in his second masters and wants to do a couple more
@penny, I have edited the post to add the <$60000 rate, Thanks
Kevin, that parental thing drove me crazy in college. My parents did not contribute to my college education, but I couldn’t even get loans over a certain amount because they said my parents were expected to pay ‘x’ amount. So I actually had to take out a bank loan (co-signed by my parents) and had to make monthly payments. That was killer in college.
Suba, this is a terrific post. My son is a junior and we are in the midst of looking for colleges. Part of the problem with choosing a school is, many kids don’t really know what they want to major in when they are 17-18 years old. As you said, you school you choose depends a lot on what degree program you are interested in. I am guiding my son to try and choose a school that has a variety of programs in case he changes his mind from whatever he majors in at the beginning.
You didn’t mention that for families making under $60k, tuition is waived at Harvard, Stanford, and some other Ivy League colleges. For low income, high achieving students, it’s foolish not to apply.
My parents wouldn’t fill out the FAFSA, co-sign loans, or otherwise pay for college. I was allowed to live at home with a small rent. I did my general ed at community college and went to work. I’m now a returning student and don’t have to use my parents’ income, instead using my own (very low!) income for the FAFSA, and my private college tuition is being paid with grants. As an added bonus, I’m a hell of a lot more stable personally, am married so there’s no love life drama, and I have the motivation of young children to keep me from wasting study time drinking and partying. Basically, the things other than money that kept me from excelling in school are no longer issues, and I’ve really learned to manage my time wisely because of said young children!
While I wouldn’t necessarily recommend the “be poor at 24″ route, it is the path that’s getting me a good education at a low cost.
Everyday tips, you’re so right about knowing what you want! I didn’t have a clue when I was 18 and it would have been a waste of money to spend a lot of money on college just for me to change my mind over and over, which I did for cheap at community college.
I can kind of speak from experience here. I didn’t go to an Ivy League school, but I did graduate from a very expensive highly ranked college called Washington University in St. Louis. It costs $40k a year and is currently ranked 13th on the US News rankings.
While lots of people were struggling to find jobs as people my age graduated into a recession, I had multiple job offers not because I’m such a great applicant, but because Wash U graduates are so desirable. Graduating from a great school opens so many doors that are so difficult to open otherwise.
I personally recommend an elite education very much.
@Kevin @ Thousandaire.com I totally see where you are coming from. I went to a costly school (on scholarship) as well. The school gave me my first job and a above average starting salary for which I am grateful for.
Nice wrap up! $200,000 may SOUND like a lot… but it’s not that much if you graduate making $75,000 a year, and by the time you’re 30, you’re making $200-$500,000 every year. HOpefully you’ll get some need based help too.
No brainer imo!
Go to the best state university that you can afford is always the best advice in my opinion, unless your family is so wealthy money is not an issue.
Biz, if the state schools are costlier than the “elite” schools and the elite school fit the individual as well, why do you say it is better to go to a state school? I went to a highly selective school on scholarship which will make me biased, so I am really interested to know what the difference is (other than money and fit). Thanks.
One of the problems I have seen, is that it’s a lot harder to get into the universities now. When I was 18, if you got good grades and had a couple of teacher recommendations, you were in. Now, kids with perfect SAT scores are being turned away from some of the elite schools. I think it’s a shame that some kids with that much talent may not get the opportunty.
Bret, I guess the competition is more vigorous now. The only consolation is the smart kids might find other ways to come up in life as well, schools can get us only upto a certain level…
Excellent post! I came to the states as an international student. Didn’t go an elite college and still my tuition was 4K per semester + books, plus everything else. I graduated loaded with student loans. Still paying them off…
Great comparison. So many of these posts on college costs don’t actually *do* any of the research. They just repeat myths. And I know a lot of people for whom the state school was more expensive than a private.
I do want to say that most of these ivy league schools are not cutthroat by any stretch of the imagination and in fact have a ton of grade inflation. Now, I won’t let my kid go to MIT, HMC, or Caltech because those can be incredibly traumatic experiences… (He’s in preschool now, so we may change our minds in the next decade and a half.) But your average Harvard or Stanford undergrad has it pretty easy.
Also, don’t discount top small liberal arts colleges!
Ah, college was wonderful.
I also know a lot of poor people in Kris’s situation. It SUCKS when your parents are expected to pay but don’t– if they had less money it would be easier for the kid. That’s why we’re saving up a ton in our DS’s 529 now. I only know of one case where the kid was allowed to be declared independent, and she did it by saying they’d disowned her for being a lesbian. Which was horrible because they’d also given her a Mercedes, a big allowance, and took her on expensive shopping trips every weekend. Whereas my Mormon friend whose parents didn’t pay because he’d gotten into Brigham Young and decided not to go really was completely disowned but still on the hook for 200K upon graduation. A pretty terrible double-standard.
Wow, that’s a really horrible situation, Nicole. I really don’t like that rule that expects the parents to pay, either, and I really feel for that Mormon friend. It’s horrible when not only are your parents not helping (this is not necessarily a bad thing, but many times it can be because the parents don’t care or worse, as in your friend’s case), but you get punished a second time around because the system assumes otherwise!
@Nicole that sounds like a horrible situation. Hope you mormon friend has finished paying those loans
I hate it when they punish the kids for parents decision.
Really good post, Suba! Also, some good discussion as well, with some rather interesting examples given.
College is absolutely important, and I’m all for getting the best education you can get. I pursued an MBA, and have found it to be a great investment for me. I’m very, very happy I took the plunge to take on those loans, as I’m much better off than I would have been otherwise. So, I do see the value in taking on investments in futher education, and this includes paying for a high quality undergraduate academic experience. Often times, the payout may not be evident up front in terms of average starting salaries, but could show up later.
That said, the wrong college choice could actually hurt, even if the education is really good. Unless a kid is presented with an opportunity that TRULY justifies the investment, it’s often smart to attend a state school. If it’s Harvard vs an average state school, and one actually intends to work hard post-undergrad on a career, I don’t see many reasons why anyone would turn down Harvard. If it’s a good private school (not Harvard-level but just “Good”) vs an average state school, it may actually a LOT better to go to the state school.
@Squirrelers I guess I have the same question to you as I asked Biz. If the cost is same, or lower for the private school, for the – a good private school (not Harvard-level but just “Good”) vs an average state school, why is it better to go to an average state school as opposed to the private school? More majors or something else? Not arguing, I am just genuinely interested to know.
@19 Suba, after reading this post I went and Googled him and found his blog (though it hasn’t been updated since August). He appears to be working for Google now and has a new girlfriend. So… doesn’t appear to be doing too badly for himself, though still somewhat estranged from his family. We did go to a fantastic elite private school, so perhaps the education was a good investment even at that cost. (I was in the opposite situation– low income parents who over-saved for college plus lots of academic scholarships. I am forever grateful to how much importance they put on saving for our college education. Totally makes up for the no VCR/dishwasher/dryer/video game/Disney vacation etc. in our youth.)
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