Plain Dealer (Cleveland), August 30, 2004, Monday

Copyright 2004 Plain Dealer Publishing Co.
Plain Dealer (Cleveland)

August 30, 2004 Monday
Final Edition; All Editions

SECTION: BUSINESS QUARTERLY; Pg. E12


HEADLINE: Elite schools not always worth the price;
There is a lot more to consider than just a collegiate brand name

BYLINE: Christopher Montgomery, Plain Dealer Reporter

BODY:
FRAMING A COLLEGE PLAN
After nearly two years of test- taking, soul-searching, college visits and prayers, your daughter just opened her acceptance letter from Dartmouth College.
It's fantastic news, but tempering your excitement is that Dartmouth information packet sitting on your desk. Or more to the point, the numbers it has inside. Tuition plus room and board comes out to nearly $38,000 a year, and the aid package is pretty slim. For four years, you're facing at least $150,000.
Gulp.
For many families, regardless of their fears, the college-selection process would end right there. With an Ivy League acceptance in hand, they would suck it up and do everything necessary, short of selling the family farm, to send the kid to Dartmouth. How in your right mind could you turn it down?
But let's say, for argument's sake, that she was also accepted at Miami University and offered a financial aid package that's just short of a full ride. There's also an offer from Hiram College, which, being a small private school, is still pricey, at $27,500 a year. But its financial aid office said it's eager to come up with a package that works for you.
With a set of options like that, you might want to hold off on a decision. There's no denying that Dartmouth and its elite ilk are venerable institutions, but economists can't agree on whether degrees from such schools are worth the price of admission. When it comes to finding the best college fit for your child and your finances, there's plenty more to consider than a school's brand name.
Alan Krueger, a Princeton University economist, and Stacy Dale, a researcher at the Andrew W. Mellon Foundation, raised a few eyebrows in 2000 when they published a study concluding that degrees from prestigious, highly selective schools aren't necessarily passports to higher earnings.
Their findings, predictably, showed that graduates of such schools do earn more over the course of their careers. But the problem with that data, they said, is that students at highly selective schools - as measured by the average SAT score of enrollees - would earn more regardless of where they chose to attend for the same reasons they were admitted by the elite school.
Princeton students, in other words, have high earnings potential not because they're at Princeton, but because they're bright, ambitious and self-confident.
To correct this so-called "selection bias," Krueger and Dale examined students who were accepted by comparable colleges. A student who turned down a highly selective school to attend a moderately selective school, they found, wouldn't suffer any hit to her earnings.
In the final analysis, they found that where students apply is a better predictor of future income. (They called this the Steven Spielberg Effect, referring to the Hollywood giant who was rejected by both the USC and UCLA film schools.)
Krueger and Dale found that the only students who clearly benefited from attending highly selective schools were those from economically disadvantaged backgrounds.
The point of all this is that there isn't a "one-size-fits-all model" for choosing a college, Krueger said in an e-mail.
"Parents and students should find the college that is best suited for them," Krueger wrote, "given the child's interests, talents, etc., the school's strengths, and the family's resources."
Ronald Ehrenberg, director of the Cornell Higher Education Research Institute at Cornell University, agreed that choosing a college should include more than just shooting for top-ranked schools. Some students want to go to large public universities, where they can enjoy big-time athletics; some are more comfortable at smaller schools in rural areas.
"There is no right choice," Ehrenberg said.
But he said that most studies, including his own, have found a positive correlation between a school's selectivity and future earnings.
For one, there are the powerful alumni networks at elite schools that help students land their first jobs. There are also the students themselves. Fraternizing with similarly talented and motivated classmates, the thinking goes, enhances your marketability.
"I joke with my students," Ehrenberg said, "that it's not me providing you with this great education, it's your contacts with other students."
There are situations where elite schools clearly aren't a smart choice. Syracuse University economist Dan Black said that for students intent on pursuing careers with modest income potential, say education or social work, higher tuition costs simply aren't worth it.
That underscores the importance of factoring majors and potential careers into the decision process. If it's a choice between a well-respected program at Ohio State University that's tailored to your child's interests, Black said, and a high-priced private school that doesn't have a similar program, Ohio State is probably your best bet.
The bottom line, Black said, is that if "you get a motivated student and send him to a place that's maybe not Princeton, he's going to take advantage of everything that place has to offer and do just fine."
Loren Pope, a former education editor for The New York Times, is a major advocate of looking beyond the typical shortlist of prestigious colleges. One of his books, "Colleges That Change Lives," profiles 40 small, private, liberal arts schools that emphasize teaching (over research) and character development. Ohio schools that made the list are Denison University, Hiram, Antioch College, College of Wooster and Ohio Wesleyan University.
Pope said those kinds of schools help students to become better critical thinkers and promote value systems that are absent at more selective institutions. Beyond that, he said, a degree from a Yale or a Stanford simply doesn't have the heft it used to.
"Sixty or 70 years ago, we had an establishment society, an old-boy network where you got everything through connections," Pope said. "But now competence trumps connections. The old-boy network is becoming obsolete."
After you graduate, Pope said, "it's your own center of gravity that matters, not where you went to school."
Pope's books are standard fare in the offices of many high school guidance counselors. But Eileen Blattner, chair of Shaker Heights High School's guidance department, said the schools Pope champions are appropriate for only certain students, those who may want more individual attention or aren't willing to jump into the hyper-competitive environment at an elite school.
"But for a kid who already has that confidence, I just don't see it," Blattner said.
Another counselor, Gene Thomas at Western Reserve Academy in Hudson, said students should take a long, hard look at the schools on Pope's list. One major perk, he said, is that small private schools are often more willing to come up with financial aid packages that substantially bring down the cost of attendance.
Thomas said a number of Western Reserve students have turned down elite colleges in favor of less-selective schools.
One was Nathan Mealy, a 2002 graduate who was accepted at Amherst College and Williams College, and was being recruited to play football at Yale.
Mealy, of Hudson, also made a visit to Wheaton College, a small Christian school outside of Chicago (and one of Pope's picks), "to appease" his mother. Once there, he was hooked - by the friendliness of the students and faculty, and by the inclusion of faith in Wheaton's curriculum.
"It was like a giant breath of fresh air," Mealy said.
Now a junior political science major at Wheaton, Mealy is a decathalete on the school's track team and is vying for a starter's job at wide receiver on the football team. When he graduates in 2006, he said he'd like to go to law school - at Yale.
That gets to something that most economists agree on, that the pedigree of the graduate school you attend is much more important than where you spent your undergraduate years.
Western Reserve's Thomas said students who know they want to pursue a post-graduate degree are smart to consider less-expensive undergraduate options.
"If your ultimate goal is bigger than a four-year plan, then it might be worthwhile to bank some money," he said. "You've got to do what's best for your long-term interests."
To reach this Plain Dealer reporter: cmontgomery@plaind.com, 216-999-4059
BOX
Did you know?
The federal financial aid formula used by most colleges requires students to contribute 35 percent of their own assets annually for their education. Parents, by comparison, are required to put in 5.64 percent of their qualifying assets each year.
SOURCE: U.S. Department of Education