Is an Ivy League degree worth it? Report finds advantages beyond future earnings

By Jessica Dickler | August 2 2023 10:14 AM

When it comes to elite college admissions, most expert agree: The Supreme Court’s ruling on the affirmative action admission policies of Harvard University and the University of North Carolina could have an immediate impact on who gets in and why.

And that may have far-reaching consequences on career placement and potential earnings.

A recent study by Harvard University-based non-partisan, nonprofit research group Opportunity Insights compared the estimated future income of waitlisted students who ultimately attended Ivy League schools with those who went to public universities instead.

In the end, the group of Harvard and Brown University-based economists found that attending an Ivy League college has a “statistically insignificant impact” on earnings.

However, there are other advantages beyond income.

For instance, attending a college in the “Ivy-plus” category — which typically includes other top schools such as Stanford University, Duke University, the University of Chicago and Massachusetts Institute of Technology — rather than a highly selective public institution nearly doubles the chances of attending an elite graduate school and triples the chances of working at a prestigious firm.

Leadership positions are disproportionately held by graduates of a few highly selective private colleges, the Opportunity Insights report found.

Further, it increases students’ chances of ultimately reaching the top 1% of the earnings distribution by 60%.

“Highly selective private colleges serve as gateways to the upper echelons of society,” the researchers said.

And “because these colleges currently admit students from high-income families at substantially higher rates than students from lower-income families with comparable academic credentials, they perpetuate privilege,” they added.

Meanwhile, at the nation’s top schools, including many in the Ivy League, acceptance rates hover near all-time lows.

“The harder it is, the more it’s coveted,” said Christopher Rim, president and CEO of college consulting firm Command Education.

Admissions policies are in flux

At the same time, admissions practices are shifting.

As colleges are being forced to rethink their policies in the wake of Supreme Court’s ruling against affirmative action, more schools are also choosing to end legacy preferences, adding more uncertainty to the process.

For future applicants, “you can’t predict what’s going to happen,” Rim said.

Rim says the Supreme Court’s decision could encourage colleges to put more weight on students’ household income and their regional background to diversify their student bodies. Schools may also rely less on standardized test scores or even eliminate SAT and ACT requirements, which have reinforced race and wealth gaps, other studies show.

But interest in the most selective schools has not waivered, according to Hafeez Lakhani, founder and president of Lakhani Coaching in New York.

“I see this razor-sharp focus from families that it’s only worth going to college if you can go to a life-changing college,” he said.

However, “the pathway to CEO is not necessarily an elite university,” added Alvin Tillery, a political science professor and director of Northwestern’s Center for the Study of Diversity and Democracy.

In fact, most hail from large state universities, he said, such as “Michigan, Illinois, Wisconsin — the big 10 schools.”

The Supreme Court’s decision could further encourage employers to ramp up recruitment efforts at large state universities, as well as at “historically Black colleges and universities,” or HBCUs, and other institutions serving minorities, to maintain a diverse pool of talent.

Colleges with the best return on investment

The Princeton Review analyzed more than 650 colleges and universities to determine the schools with the most value, considering cost, including tuition and room and board, as well as financial aid, academic offerings, career placement services, graduation rates, alumni salary and overall student debt.

Georgia Institute of Technology earned the top spot among public colleges, while MIT ranked No. 1 for private colleges, both overall and for career placement.

The Princeton Review also factored in PayScale.com data on starting and mid-career salaries and job satisfaction.

Originally published on CNBC on August 02, 2023