IS A DEGREE FROM an elite school the golden ticket? I recently read Jeffrey Selingo’s excellent book Who Gets In and Why—and came away with some fascinating insights.
Selingo says experience and skills often trump where someone went to college. Each year, 1.8 million students graduate from four-year colleges, with 54,000 leaving with a degree from an elite institution. Simple math confirms employers must fill jobs with more than just graduates from elite schools.
According to Selingo, “Elite colleges seem to lead to elite jobs, and in turn, elite money. Around half of Forbes’s list of the most powerful people, as well as half of America’s billionaires, attended top schools.”
But there’s a catch. Many students attending Ivy League schools come with colossal financial and social capital. Do graduates reach prosperity due to their schooling, or is their success the result of winning first prize in the genetic lottery?
A famous study by Stacy Dale and Alan Krueger leans toward the latter. They updated their own study from a decade earlier, examining the incomes of more than 30,000 adults who graduated from 30 colleges. The subjects were now in their 30s and 40s. The findings validated the power of the individual. The earnings of graduates from schools of different selectivity, but who had similar academic abilities, were essentially the same.
“A student with a 1390 SAT who went to Miami University of Ohio but was accepted by the University of Pennsylvania earned as much on average as the student with 1390 who went to Penn,” writes Selingo. “The average SAT scores of colleges where students applied were more likely to predict success than the school students actually attended.”
Majors and skills, it seems, count for more than attendance at a brand-name school. The College Scorecard provides some interesting data. A computer science major from the University of Illinois drew $92,200 upon graduation. The results weren’t much different from a graduate of eighth-ranked Duke, who came in at $95,200. An economics major from 44th-ranked Tulane earns around $44,000, less than a Binghamton University graduate. Binghamton’s tuition is $27,383 for in-state residents. Tulane charges an astronomical $80,322 per year.
Similarly, consider a finding from Burning Glass Technologies. It found marketing majors with specific SEO (search engine optimization) and SQL (structured query language) skills brought home $20,000 a year more than those lacking these qualifications. Notably, this income data didn’t vary with the college that these marketing majors attended.
Less than a third of college graduates find a job in their major. The upshot: Rather than obsessing about getting into an elite university, students should focus on acquiring skills and winning internships.
One exception is students from lower-income families. “Earning a college degree is a crucial step up the economic ladder,” says Selingo. “A college education may be the only way out for those struggling to escape poverty. And, if that degree is from an elite university, the benefits are more significant.”
But for achievers from wealthy families, an elite school education isn’t required for prosperity. College is the first stop on the road we call life. Not getting into Harvard isn’t a career death sentence. As B. Alden Thresher, author of the 1966 book College Admissions and the Public Interest, wrote: “One cannot tell by looking at a toad how far he will jump.”
Tony Isola’s previous articles were Daylight Robbery, 403 Beware and Seven Deadly Sins. Tony works at Ritholtz Wealth Management, specializing in helping educators reach their financial goals using a fiduciary model. To learn more, visit his blog, A Teachable Moment. Follow Tony on Twitter @ATeachMoment.