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Live Chat: Public Schools Beat Ivy League in College Payback Survey

As recession-weary families crunch the numbers, higher education becomes even more of a budget-blaster.  But SmartMoney.com’s story, Colleges That Help Grads Get Top Salaries can help focus decision-making.

Matthew Heimer, SmartMoney’s deputy editor and co-author of the survey, took reader questions about the value of an Ivy League education, compared to non-Ivy private schools and public universities on August 11.  WSJ.com’s Journal Community editor, Demetria Gallegos, moderated. Replay the event.

Full transcript follows: Hello, everyone. Thanks for checking in. Please leave your question above. Matt Heimer will answer as many as possible when we get started in just over an hour. Thanks! by Demetria Gallegos 8/11/2011 4:22:45 PM 12:22 PM

Hi all. Looking forward to hearing from you. by matt.heimer 8/11/2011 4:50:00 PM 12:50 PM

Matt – thank you for your time. What’s the response been so far to this article? If the Ivy League doesn’t land on top, that’s a slightly controversial finding. Is SmartMoney’s Payback Score ringing true for grads? by Demetria Gallegos 8/11/2011 5:30:56 PM 1:30 PM

My pleasure, Demetria. Anecdotally, it seems as though the Ivy grads are saying, “you’re crazy,” while the public school grads say “you’re right.” Partisanship! ;-) by matt.heimer 8/11/2011 5:31:51 PM 1:31 PM

However, we’re also getting some nicely nuanced responses. Most notably, people are pointing out that the student’s motivation and focus often matter more than the school who’s name is on the diploma, when it comes to career success. by matt.heimer 8/11/2011 5:32:49 PM 1:32 PM

And we, of course, completely agree with that idea. by matt.heimer 8/11/2011 5:32:59 PM 1:32 PM

What university has the largest Avg. ROI? by will 8/11/2011 5:33:13 PM 1:33 PM

Hi Will. Thanks for your question. By our measurement, the Georgia Institute of Technology (aka Georgia Tech) had the best ROI. We define that, by the way, essentially as average alumni salaries divided by the tuition and fees they paid. by matt.heimer 8/11/2011 5:34:13 PM 1:34 PM

Ga. Tech grads are heavily focused in engineering and computer-related majors, and it shows when they get out: their director of career services told us 63 percent of May’s graduating class had jobs at commencement, up from 53 percent of the class of 2010. by matt.heimer 8/11/2011 5:35:05 PM 1:35 PM

Average salaries after two years in the work force are around $57,000. One big caveat, though: Out-of-state tuitions at Georgia Tech have more than tripled since the mid 1990s; that’s a symptom of public colleges’ budget woes. by matt.heimer 8/11/2011 5:35:52 PM 1:35 PM

Will, you can look up schools by name in the sortable table that SmartMoney created. It lists the top 50 highest-scoring schools according to the payback index. by Demetria Gallegos 8/11/2011 5:35:56 PM 1:35 PM

Hi, Matt. I work for the University of Kansas, and also graduated from its journalism school last May. What intangibles did I earn from my public education as opposed to my Ivy League friends? by Austin Falley 8/11/2011 5:36:52 PM 1:36 PM

Hi Austin. One thing before I answer: Our survey broke down employees’ salaries based on where they earned their undergrad degrees, not on graduate school. (That’s a whole different issue i’d like to get back to.)

by matt.heimer 8/11/2011 5:38:07 PM 1:38 PM But one thing leaps to mind about public colleges: They tend to be much bigger–KU has about 20,000 undergrads on campus, while an Ivy school may have just 5,000. So a public college undergrad often has to learn to stand out in a much bigger crowd–how to find resources and opportunities amid more competition, say.

by matt.heimer 8/11/2011 5:39:38 PM 1:39 PM An interesting sidebar: If you look at the educational backgrounds of Fortune 500 CEOs, a lot of them went to Ivies for GRAD school (Harvard, Penn, Columbia). But their undergrad credentials are just as likely to come from big public schools (Wisconsin, Texas, Michigan). Food for thought. by matt.heimer 8/11/2011 5:40:51 PM 1:40 PM What do you say about the schools in regards to their admittance to top graduate schools (especially medical schools) in the public vs. Ivy debate? by Derp 8/11/2011 5:42:47 PM 1:42 PM

Hi Derp. This follows on a bit from my previous answer. The top grad schools (including med schools) essentially say they’re taking the top performing undergrads from all colleges. It seems to be true, though, that some colleges — public AND private — have wea ker academic reputations, and a student from there may have to really crush his/her standardized test scores to compensate. by matt.heimer 8/11/2011 5:48:27 PM 1:48 PM

How can you explain the long term affect of graduating for an Ivy league college, as the payback is just one factor which is quite short term. by Faizan 8/11/2011 5:48:45 PM 1:48 PM

Hi Faizan. In terms of salary alone, the value of an Ivy League education certainly seems to emerge over time; if you look at our sortable table, you’ll see that 15 years after graduating, Ivy alumni occupy 7 of the top 10 slots. As for other factors–richness of intellectual life, network of social connections–they’re undoubtedly important, but hard to quantify. by matt.heimer 8/11/2011 5:50:40 PM 1:50 PM

Students at the Ivy League rarely pay the sticker price, I should know! I’m a Yale alum! The endowments of such schools allow students that fit into certain financial criteria to attend for a very low cost, even cheaper than good public universities. by Brandon Lauer 8/11/2011 5:50:50 PM 1:50 PM

Hi Brandon. You make a very good point, and it’s one we also mention in our article. The Ivies really paved the way where that kind of aid is concerned, and they can afford it. But there’s still a sizable population that can’t take full advantage of that aid (a student who’s an only child, for example, usually gets less aid than one of many siblings). by matt.heimer edited by Demetria Gallegos 8/11/2011 5:52:57 PM 1:52 PM

One other note about the Ivies: Compared to other private schools, they’ve also been able to slow down the growth of their sticker-price tuition — again, often by diverting resources from their endowments. by matt.heimer 8/11/2011 5:53:37 PM 1:53 PM Who’s better able and more willing to give financial aid for diverse candidates? Public or private colleges? by Richard 8/11/2011 5:54:12 PM 1:54 PM

Hi Richard. There’s no across-the-board answer to that question, but it’s often true that nondiscrimination laws restrict the extent to which a public college can take, say, someone’s gender or ethnicity into account. Private schools have more leeway, where that’s concerned. And economic diversity is something almost all the schools say they’re committed to. by matt.heimer 8/11/2011 5:55:56 PM 1:55 PM

About ROI, Matt – some readers have similar questions: by Demetria Gallegos 8/11/2011 5:56:33 PM 1:56 PM

On the ROI arguement, wouldn’t any of the service academies be at the top of that metric? by Lauren Clark 8/11/2011 5:56:39 PM 1:56 PM Why isn’t Cooper Union on the list? None of the school’s students pay tuition. The ROI should crush every school on the list. by atown 8/11/2011 5:56:41 PM 1:56 PM

Thanks Lauren and atown. You make a good point: There are still some schools where an education is essentially free. I guess their ROI would be…infinity? :) by matt.heimer 8/11/2011 5:58:36 PM 1:58 PM

But more seriously: We made a deliberate choice to restrict our analysis to schools (even public schools) whose full sticker-prices were among the highest. The idea was to highlight the question: Is their tuition worth it? by matt.heimer 8/11/2011 5:58:45 PM 1:58 PM

Hence the exclusion of the service academies, Cooper Union, and many other very competitive schools. by matt.heimer 8/11/2011 5:59:05 PM 1:59 PM Where does the salary data come from? Right after graduation and 15 years later? The high schools cannot report rational graduation rates and you have data that gives average salaries 15 years after college graduation? Thanks. by jj 8/11/2011 5:59:20 PM 1:59 PM

Hi jj. The salary data comes from Payscale, a company that’s based in Seattle. They have a database of about 29 million compensation profiles (essentially, descriptions of those employee’s salaries and backgrounds, with the names and other ID data removed). They cross-reference that data by a number of variables, including undergraduate degree. by matt.heimer 8/11/2011 6:01:24 PM 2:01 PM

Do the tuition figures for public schools show in-state tuition or out-of-state tuition? The difference is usually significant. by rickj 8/11/2011 6:01:36 PM 2:01 PM

Hi Rick. We’re using out-of-state tuition. And if we were measuring by in-state tuition, the public schools would perform even better. But the out-of-state figures, interestingly enough, have been climbing very sharply over the years, as states try to close budget gaps. No longer are New Yorkers flocking to Michigan for a “cheap” degree. by matt.heimer 8/11/2011 6:02:55 PM 2:02 PM

We’re running out of time – just enough left to hear from Austin. by Demetria Gallegos 8/11/2011 6:03:23 PM 2:03 PM

After scholarships and grants, I spent 17k on my undergrad and began my full-time industry job at 40k. How does that compare to the norm? by Austin Falley 8/11/2011 6:03:26 PM 2:03 PM

Hi Austin. You’re far ahead of the norm, as it turns out. (I wonder if you were paying in-state tuition?) In any case, with numbers like that if you have loans, you’ll be able to finish paying them sooner — and get on with the rest of your financial life. by matt.heimer 8/11/2011 6:04:49 PM 2:04 PM

If I may – would like to squeeze in Blane’s excellent question. by Demetria Gallegos 8/11/2011 6:05:03 PM 2:05 PM

Matt, as you note, the Ivy League schools are smaller and have much less diverse areas of study (Agricultural Studies, anyone?). To really measure the “payback” how about an analysis of the top 5,000 graduates at a public school (many of whom could have chosen an Ivy League school) vs the top, say, 50% of graduates of the Ivy League? by Blane 8/11/2011 6:05:05 PM 2:05 PM

Hi Blane. That’s a really good point. And more ambitious than SmartMoney had time for, sad to say. But go ahead and look up some recent research by economists Alan Krueger and Stacey Dale: They say that students whose grades/test scores good enough to get them into an Ivy usually perform just as well as Ivy grads — regardless of where they go to school. by matt.heimer 8/11/2011 6:07:10 PM 2:07 PM

Thank you so much, Matt, students and parents. It’s such a helpful analysis, but in the end – and in this economy – the trick is still just landing a post-graduation job! by Demetria Gallegos 8/11/2011 6:07:21 PM 2:07 PM

Thanks so much for your time and questions, everyone. Have a great day. by matt.heimer 8/11/2011 6:07:21 PM 2:07 PM


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    • I remember matriculating into my medical school class and as a graduate of a public university, I initially felt quite intimidated by the kids from the “ivy’s”. My fears were baseless and in fact the students from the “ivy’s” were the most poorly prepared for the rigors of medical school. The guy who graduated tops in the class did his undergraduate work at a little no-name school in PA, followed by a woman from a public university, and then myself. No “ivy”-leager graduated in the top ten. Later, when I became a resident, I had the opportunity to teach many medical students from the “ivy” league school where I was completing my residency. Surprisingly, the students were unprepared and amotivated and this was manifest in their work product. While my experiences may not reflect the potential performance abilities of “ivy” league students, they were clearly thought provoking.

      Then again, had I been so smart, perhaps I would have realized that the payoff of becoming a physician was fairly poor in first place as illustrated by BU economist, Laurence Kotlikoff http://finance.yahoo.com/tech-ticker/forget-harvard-and-a-4-year-degree-you-can-make-more-as-a-plumber-in-the-long-run-says-prof.-kotlikoff-536046.html

    • I am surprised by this table and ranking. It seems it does not account for in really any meaningful way the main objective of attending a university or college …. being educated. Here the ends are trying to rationalize the means when what should be import are the means which would substantiate and determine the ends. Attending and pursueing a post secondary education is a gift, it is, in its very essence, an opportunity to expand and devleop ones mind. Yes employment and financial security is important and ncessary, but there are plenty of other ways to obtain that. And these are by products of successfully being educated for the sake of being educated. Perhaps this table should be ranking the best vocational institutions.

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