Are the elite colleges and universities worth the enormous effort and cost it takes to get admitted and graduate?

The current scandal about parents using six-figure bribes and fraud to get their kids into elite schools raises again the question are these schools worth it. Or exactly how much are they worth?

One article I saw put the incremental value of a top Ivy or Stanford degree at $800,000 more in salary over the first 10 or 20 years.

I am not buying that. You can go to work for investment bankers or other such top salary-and-bonus Manhattan operations. And your making hundreds of thousands more salary than other jobs is probable if you do that. But I and many, maybe most, others had no interest in those jobs. Many elite grad students work for non-profits, government, or go to grad school. Even within the same fields like MBAs or JDs or MDs, the salaries can vary tremendously depending on where you work and in what speciality. In some cases, like Manhattan, the cost of living is so high that the salary and bonus alone is misleading.

How did my college and grad school affect my life? I was a nobody from Podunk High. Had I gone to my safety school—Rutgers—I would have become a nobody from my state university. That sort of mindset results in you and others having lower expectations for yourself and that can adversely affect your whole life.

But I got into my dream college: West Point, perhaps the most famous military academy on earth. It is hard to convey the public image of West Point then to today’s Americans. One way to put it was a West Point cadet was an “All-American Boy.” Today, that is a punch line of sorts. Back then, “All-American Boy” was respected. It meant that you had a rare combination of athletic ability, smarts, leadership, toughness, “Eagle Scout” good citizenship, integrity.

I and others overestimated the quantities of those characteristics in every cadet before I got there. Some cadets had all those things in breathtaking quantities. But the average cadet was not that great. Maybe a star intramural athlete at a civilian college, top half of his college class academically and in leadership and ability to withstand hardship, and much better than average citizenship and integrity.

But I remember that a great many famous people came to speak to us—and they almost all started with the same statement: how honored they were to speak to the “cream of the crop” of American college students. If you hear that enough from famous people you have heard about growing up, you start to believe it.

So you get a huge boost of self-esteem from the acceptance letter. Then you get a more gradual boost as you successfully meet the many challenges of West Point and it becomes more certain that you are going to graduate.

By the time you graduate, you have a far higher self-confidence and self-esteem that if you had gone to Rutgers—where the speakers are more likely to be semi-famous and more likely to tell you how glad they are to be here at Colgate, er, Rutgers.

So far, I have been talking about the prestige of the school and the good housekeeping seal of approval getting in and graduating gets you. That can dramatically increase your self- confidence and the esteem in which strangers and even friends and relatives hold you.

What about value added by the education and other aspects of the school? 1. You probably majored in the wrong subject so how well that prepared you for what turned out to be a different career is pretty much beside the point. 2. What about the more general formal education and informal maturing that happens at college? First, you get to get more of that at a college where you live on campus. Second, there are party schools and there are serious schools where a great many students are trying to get into Harvard Law or Harvard Medical. 

Hanging around with a bunch of slackers is likely to hurt you. Real students are likely to help you. Some U. of MI students who were friends of one of my son's Columbia teammates attended class at Columbia one day.

They were amazed at the focus of the Columbia students on actual learning. Getting into Harvard Law was more likely the motive, but that had the same effect.

They said at U. of MI, students are screwing around in class. MI is called a "public Ivy" by the way. Ha!

So, yes, they're is a considerable benefit to associating with and making lifelong friendships with top-notch, ambitious students. But there's also great cost associated with living on campus and at a schools like MI, you have both bums and good kids. At schools like West Point in the 1960s and Columbia in the 2000s, being a bum was sort of not allowed. 

Elite schools today leave you with the greatest debt. After a point, that can dramatically, adversely, affect your life, perhaps overcoming the benefits. 

So getting into an elite school is more of a mixed bag than the parents in the scandal seem to think. Plus, if the school you get into is a serious academic school, not being sufficiently academically prepared or motivated is likely to flunk you out, which more than wipes out the benefits.

There was an interesting article in the WSJ a year or three ago. It said that if you studied STEM in college, elite schools did not matter in terms of future salary. That is, an electrical engineer from San Jose State makes the same as one from Harvard. But if you major in a bullshIt subject like women’s studies, you get paid a lot more if you graduate from Stanford than if you graduate from Temple.

Why? The curriculum and standards for getting the degree and the fundamental nature of the discipline are real in STEM. Funny. We had a joke at Harvard Business School that there's no BS like HBS The MBA there is about 60% STEM. And the overall “framework for analysis” is mostly a STEM mindset.

In other words, if you study STEM, you get paid for the value added by the education, which has the same curriculum and standards no matter where you go. If you study BS, you get paid according to the application that got you admitted to the elite school.

Sometimes looking at the extremes makes it easier to see thing like education value added. The most extreme example of value added is medical school. That is STEM. Go to any medical school in the US and you are likely to make a hell of a lot more money in your life than if you had gotten any other formal education. Why? A ton a subject matter knowledge with the number of doctors being artificially held down and high stakes work.

Ivy better than state medical school? Nah. A medical doctor is a medical doctor.

Which schools have the LEAST value added? Probably liberal arts studies of the “great books.” (Columbia is big on that. My son Dan got a Computer Science BA there.) Should you read the great books? No. They are not the greatest books. They are the great books written a thousand years ago. None are in the top 100 anymore. Just read books on your own outside of formal education.

Where you go to college may affect your spouse choice, where you end up living, where you end up working. 

So are the elite schools worth going through extreme ethical effort and expense to get admitted to and graduate from? If you are going to be a STEM person, no. If you plan to be a BS artist for the rest of your life and get hired by prominent pretentious institutions, try to go to the elite schools—Ivy League, Stanford, MIT, Cal Tech, maybe the Little Ivies.

The educational institution prestige that looms so large when the prospective student in question is in high school, is, in the grand scheme of the student’s life, a non-issue outside of the few fields that are thick with graduates of those institutions—investment banking, consulting, academia, national political office.

Since WW II, our presidents have been about about 60% Ivy League or service academy. Maybe that is the best answer. National politics is a prominent, BS field. Ivy Leaguers and service academy grads are overrepresented as a percentage of all graduates. On the other hand, nearly half of the post-WW II presidents attended no such college.
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Helpful in a small number of fields? Yes. Required for any field? Sort of for investment banking, consulting, academia.

Worth the cost? Marginal, especially considering that student-age people rarely know what they are going to be doing as adults. If you are so rich you don’t notice the $250,000 per student to gain ethical admission and graduate, go for it. The elite schools make sense for a rich kid who does not know what he or she wants to do for a career—because it gives the graduate maximum flexibility if they end up wanting investment banking, consulting, academia.