Why Do Smart Kids Make Dumb Decisions About Private School?

The College Of William & Mary

I've long wondered why people still spend a fortune attending private school when education is 100% free now thanks to the internet. I attended The College of William & Mary from 1995 – 1999, a public school that charged $2,800 a year in tuition (~$10,000 a year all-in) because I felt guilty having my middle class parents pay for my education. I wanted to pay them back and knew that worst case, I could with a minimum wage job.

I've also wondered who are the kids that attend our nations most elite private schools? Are they that much smarter than the rest of us? Or are their parents so rich they don't think twice about the astronomical price tags? Something must be wrong giving the student debt issues we keep hearing about.

I had a 3.7/4.0 GPA, was the captain of my varsity tennis team, and won a couple academic awards but didn't have a snowball's chance in hell of getting into private school mainly due to my mediocre SAT score. Then again, I'll never know for sure because I never applied. The gap between in-state tuition versus out-of-state tuition or private school tuition was just absurd. 

I've invited reader Money Commando to break down the private versus public school debate as someone who graduated with the most lucrative major from one of the most selective private schools. Take it away MC!

Dumb Decision About Private University

A new school year has started and for high school seniors that means worrying about the biggest decision of their young lives – where to go to college.

Students and their teachers pore over the latest college rankings, schedule school visits, download applications, and hope to get into their dream school. Applications are filled out, fingers are crossed, and when the acceptance letters come back students and their families are forced to decide what school to attend.

On its face, the selection process seems simple – go to the highest ranked school you get into, regardless of the financial sacrifices required. After all, an education at one of the elite private universities will pay for itself, right?

I'm not so sure.

About Me

I graduated in 1998 from Stanford University with a degree in Computer Science. I had originally gone to school wanting to be a physics major.

I'd loved Physics in high school and was convinced I'd love it in college as well. The Physics program required a few introductory Computer Science classes, and after taking them I realized I liked the CompSci classes a lot more than I liked my Physics classes, so I switched majors. Talk about getting lucky!

I had stumbled into what ended up being the single most lucrative degree of the last 20 years (at least according to an analysis done by The Atlantic a few years ago that analyzed the average earnings for different degrees at different schools). Here is the graph from the article:

The most valuable college degrees

But here's the thing – just because a Stanford CompSci degree resulted the highest average income over 20 years doesn't necessarily mean that getting a Stanford CompSci degree was the best educational investment.

This graph shows the earnings; it doesn't factor in the cost of the degree itself. Here's a better way to look at the decision – even if we assume that a higher ranked but more expensive school is a “better” school, is it worth the additional money to attend that school? Is a fancy private school, in fact, worth the additional money?

Educational ROI – Computer Science majors

Tuition at Stanford in 1998 (the year I graduated) was about $21,000/year, or approximately $84,000 for 4 years. According to the graph, the average Stanford CompSci degree was worth $1.7M over 20 years. That's a 20.24x return over 20 years, or a 16.2% return per year.

UC Berkeley (a public school) was number 3 on the list. The average UC Berkeley CompSci grad had 20-year earnings of approximately $1.55M, yet the tuition & fees at UC Berkeley in 1998 were only $3,799/year. Berkeley CompSci majors made 91.1% of what Stanford CompSci majors made, but only paid 18.1% the tuition. The Berkeley CompSci grad had a 26.0% return per year vs. the 16.2% at Stanford. That's an enormous difference!

It's clear that going to UC Berkeley and getting a CompSci degree would have given me a much better return on my college investment than my Stanford degree did. To get the same 14.2%/year ROI that I did, a Berkeley grad who paid $15,196 for 4 years of school would only need to make $216,297.43 over 20 years. Because the cost of tuition is so low it would be almost impossible for a Berkeley grad to not have a higher ROI than a Stanford grad.

Related: The Difference Between Private And Public School People

Educational ROI – Average Graduates

But that's only comparing Computer Science majors. How does the average graduate from public vs. private universities fare?

Payscale.com did an analysis of the early and mid-career (10+ years experience) salary potential for various universities in the US. Here they are, ranked by mid-career salary.

RankSchool NameSchool TypeEarly Career PayMid-Career Pay
1SUNY – Maritime CollegeMaritime Academy$65,200$134,000
2Harvey Mudd CollegePrivate School$78,200$133,000
3 (tie)Harvard UniversityPrivate School$61,400$126,000
3 (tie)United States Naval Academy (USNA) at AnnapolisMilitary Academy$78,200$126,000
5California Institute of Technology (Caltech)Private School$72,600$125,000
6Massachusetts Institute of Technology (MIT)Private School$74,900$124,000
7Stanford UniversityPrivate School$65,900$123,000
8Princeton UniversityPrivate School$61,300$122,000
9Babson CollegePrivate School$60,700$121,000
10 (tie)Stevens Institute of TechnologyPrivate School$66,800$120,000
10 (tie)United States Military Academy (USMA) at West PointMilitary Academy$78,500$120,000
10 (tie)University of PennsylvaniaPrivate School$60,300$120,000
10 (tie)Washington and Lee UniversityPrivate School$54,700$120,000
14Carnegie Mellon University (CMU)Private School$64,700$118,000
15United States Air Force Academy (USAFA)Military Academy$71,900$116,000
16 (tie)Colgate UniversityPrivate School$53,700$115,000
16 (tie)Tufts UniversityPrivate School$54,200$115,000
18 (tie)Cooper Union for The Advancement of Science and ArtPrivate School$62,700$114,000
18 (tie)Rice UniversityPrivate School$63,900$114,000
18 (tie)University of California – BerkeleyPublic School$59,500$114,000
21Santa Clara UniversityPrivate School$58,900$113,000

If we ignore speciality and military academies we see that the highest rated public university on the list is UC Berkeley at a tie for #18. The average early career Harvard grad makes $61,400 and the average early-career UC Berkeley grad makes $59,500. in 2016 the tuition at Harvard is $45,278 vs $12,972 at Berkeley. For a 4 year degree the Harvard grad pays $155,168 more in tuition yet only makes, on average, $1,900/year more after graduation.

Again, the private school doesn't seem to make sense from a return on investment perspective.

Caveat – Almost Nobody Pays Full Tuition

Of course, it's a bit more complicated than that, because we've been comparing the list prices of the schools. Here's the reality – the published tuition for a university is like the MSRP on a car… almost nobody actually pays it. Only the truly wealthy pay the full list price. Everybody else receives at least some financial aid.

One of the main reasons the top schools are the top schools is because they have enormous sums of money at their disposal. Here are the universities with the largest endowments and the ranking of each university from US News:

School name (state)End of fiscal year 2014 endowmentU.S. News rank
Harvard University (MA)$36,429,256,0002
Yale University (CT)$23,858,561,0003
Stanford University (CA)$21,466,006,0004 (tie)
Princeton University (NJ)$20,576,361,0001

The schools with the 4 largest endowments just happen to be the top 4 ranked schools in US News. That's certainly no accident. Larger endowments allow schools to pay for the best facilities, hire the best professors, and make other investments in their educational experiences.

It also allows them to offer financial aid, and most of it is need based. For example, in 2016:


  • If your family makes less than $65,000/year you'll pay nothing to attend Harvard. Harvard will cover all tuition, books, fees, room and board
  • If your family makes $65,000 – $150,000 your family will pay between 0-10% of income. That means the max you'd pay is $15,000 (10% of $150,000) per year


  • Zero parent contribution for incomes below $65,000. There will still be a student contribution expected, coming from loans, summer jobs, etc.
  • No tuition for incomes under $150,000. The family will only be responsible for books, room, and board.

Given that the average family income in the US is $52,000, it's fair to say that at least half of the students in the US would pay nothing to attend these top-tier schools.

My personal experience was somewhere in the middle. My parents were both in education and our family was probably upper middle class. Combined, they made too much money for me to get need-based grants but not enough money to be able to pay for everything themselves.

They paid about 1/3 of the total cost to attend Stanford and I paid the rest through student loans and working (2-3 part-time jobs during the school year and a full-time job during the summer).

If you're one of the students who will pay as much or less to attend a top private school as you'd pay to attend a top public school, it's hard to argue against attending the private school. However, it's not a slam dunk, as I believe there are both advantages and disadvantages to attending a top-tier private university.

Related posts: Should I go to public or private university? It depends on your guilt tolerance.

Advantages To Attending A Top Private University

1) You're surrounded by great students

Jim Rohn has a great quote, “You are the average of the five people you spend the most time with”. One of the key advantages to attending a top school is the students you'll be surrounded by for 4 years.

In 2015 Stanford was the most selective university in the country with a mere 4.7% acceptance rate. Stanford accepted less than 1 in 20 applicants, and the applicants were all at or near the top of their class. Just how selective is that?

Look at it this way – there are approximately 37,000 high schools (public and private) in the US. Each incoming class at Stanford is about 1,750 students. Even if ONLY the valedictorian from each high school applied to Stanford there would only be space for less than 5% of them. The numbers are similar for all the top schools.

Surrounded by the best and brightest

By definition, the students applying to and getting into the top schools are the best and brightest students. They are smart, driven, and hard-working. They genuinely enjoy learning, they want to take interesting classes, and they expect the best from themselves. They push each other. Being around other students like that is contagious.

In addition to taking classes with these students, you'll have them as contacts later in life. We've all heard that it's not what you know, it's who you know, and it's certainly an advantage to start your career with great connections.

But here's the thing – there is essentially no difference between the incoming freshmen class at most of the schools. Just for kicks, I decided to look up the stats for the 2015 incoming class at Stanford, Princeton, UC Berkeley, and UCLA, taken from their admissions/FAQ pages:

Average unweighted GPA

  • Stanford – 3.95
  • Princeton – 3.91
  • Berkeley – 3.90
  • UCLA – 3.90

Average ACT score (75th percentile of students)

  • Stanford – 35
  • Princeton – 35
  • Berkeley – 34
  • UCLA – 33

Average SAT composite score (75th percentile of students)

  • Stanford – 2360
  • Princeton – 2380
  • Berkeley – 2330
  • UCLA – 2160

It's clear that the students at the top schools, whether public or private, are essentially identical. They are all likely to be hard-working, driven, and success oriented. You'll reap the same benefits from being around UCLA students as you would from being around Stanford, Princeton, or Berkeley students.

It's A Wakeup Call

Let's assume that Harvard only admitted students who were valedictorian of their high school class. These are kids who were the best students in their high school. These students walk into their first math class at Harvard, expecting to ace the class as they've always done.

At some point during the semester one of those students is going to come to a terrifying realization – “I am the worst student in this class and every other student understands this material better than I do.”

Remember, this is a student that was the best math student at his high school! This student is probably better at math than 99% of college freshmen in the country. If this student went to a different school with a more typical distribution of students he'd likely be one of the top students in the same math class at that school. But here, surrounded by other top students, he'd struggle.

This was my exact experience. My first semester at Stanford was an eye-opening experience. I was the valedictorian of my high school class. I was used to getting straight A's with little work.

I arrived at Stanford and quickly realized that everybody around me was not only as smart or smarter than I was, but they were working harder than I was too! I was going to have to improve my study and work habits if I wanted to be successful.

Greater Prestige From A Top Private University

A very typical startup founder resume. They all have the same backgrounds.
A typical startup founder resume. They all have the same backgrounds. Yet, you don't need a degree to be an entrepreneur!

Let's face it – prestige and status are the primary reason most people go to a top school. Yes, they have amazingly beautiful campuses. Yes, they have professors who have won Nobel prizes and are doing cutting edge research. But ultimately, I think most high school kids want to go to a top school because they want to have that name on their resume for the rest of their lives. They believe that's the ticket to success in life.

There is certainly some truth to this. There are employers that only recruit from top schools. Going to a prestigious school will certainly make it easier, all other things being equal, to get a great first job.

As we learned from the FTX collapse, the best occupation for prestige and status is actually being a professor. You make good money, can buy a $16 million vacation property int he Bahamas, and people revere your wisdom.

Disadvantages of Attending A Top Private University

1) Being a small fish in a big pond

When I arrived on campus my freshman year I was stunned to realize that approximately one-quarter of my fellow frosh planned to go to medical school and become doctors. By the time we graduated well under one tenth of my students planned to go on to medical school. What had happened?

It's simple – by definition, half of the students in the pre-med classes had to be below the average. (Note: Stanford doesn't actually have a pre-med major, so students who are unofficially pre-med usually major in Human Biology, Chemistry, or some similar science, but I'll just call them all pre-med for simplicity).

These students got C's for the first time in their lives. For many students, this dissuaded them from continuing on the pre-med track. They told themselves that maybe they just weren't meant to be doctors after all. They decided that maybe they weren't as good at science as they thought they were.

It's awfully tough to stand out when you're surrounded by the best and brightest.

For some people going from being a big fish in a small pond to a small fish in a big pond is disheartening. Malcolm Gladwell writes about this in his book “David and Goliath: Underdogs, Misfits, And The Art Of Battling Giants”.

His conclusion is that for most students it's better to go to a university where you can truly excel rather than a university where you barely succeed. You build confidence, you are able to stand out among your peers, and you're more likely to end up studying a topic that you're truly passionate about.

Related posts:

Is an MBA a big waste of time and money?

Everybody should try a job in sales (Money Commando)

It's Not Clear That a Top school Actually Adds Value

Does attending a top tier university actually provide a better education than an average school? After all, a calculus class at Yale probably uses the same calculus text-book that a class at University of Arizona does. A History major at Princeton has to take more or less the same classes that a History major at the University of Michigan takes.

I think the reality is that the success of graduates from top-tier schools is a function of their selectivity in admissions. Graduating from a top university says a lot more about how you did in high school than what you learned in college.

In addition, smart, driven, and hard-working people are likely to succeed regardless of what university they attend (or if they attend a university at all). That is, if you took the incoming class of Princeton and instead had those same students go to Rutgers (the top rated public university in New Jersey), it's likely the students would end up just as successful. In fact, you could probably take those same students and have them skip college altogether and they'd likely do better financially than the average person.

Yes, the person attending a prestigious school will likely get a better job out of college, but as your career progresses it matters less and less where you went to school and more and more how you perform at your job. In fact, the person attending the less expensive school has a huge advantage – they'll likely graduate with much less debt, which means they are freer to take chances.

This is important, because the real path to wealth isn't through getting a salary paying job, it's through starting a business or working at a job where you get paid based on production. It's tough to start down those paths when you spend the first 10 years of your career paying off huge student loans.

Professors Care More About Research Than Teaching

My sophomore year I took a multivariable calculus class (I was still thinking I was going to major in physics). As you can imagine, this is the type of class where having a good instructor is important, as it's not exactly a simple subject.

If the final exam for the class had been to pick my professor out of a lineup I would have failed. Why? Because I never saw his face. He walked into the class (always wearing exactly the same sweater with leather patches on the elbows), and spent the next hour with his back to the class, writing equations on the board. He didn't ask or answer questions (although this didn't really matter because he had such a thick accent that it was impossible to understand him anyways).

In short, he was terrible teacher. So why was he teaching the class? Because he was a brilliant mathematician.

Professors Are There To Do Research

I realized that the professors weren't necessarily there to teach. The professors were the big names. They had won Nobel prizes and were doing cutting edge research. They were featured prominently in the school's marketing literature. They were the ones who had written the (very lucrative) textbooks we used in classes.

And, as a general rule, they weren't very good teachers.

There were exceptions of course, but the reality is that for many of the professors, teaching seemed like a burden. It was something to be endured.

I did have some great teachers at Stanford, but they tended to be lecturers, not professors. Lecturers weren't on the tenure track and they focused on teaching, not research.

They weren't writing textbooks or publishing papers, but they were awesome at explaining things and answering questions and it was clear that they were investing considerable time in putting together interesting assignments.

The problem is that the university doesn't advertise the lecturers. They fill the prospectus with information about the Nobel Prize winners that don't want to (and probably shouldn't) teach classes.

I went to Stanford expecting every professor to be like Robin Williams in “Dead Poet's Society” and every class to be a scene from “Stand and Deliver”.

My Experience Attending A Private University

I loved my time at Stanford. It was one of the formative experiences in my life. Through a combination of luck, hard work, and taking some calculated risks I've managed to put together a life that I'm very happy with. However, it's not clear to me just how much attending Stanford had to do with my success.

The biggest benefit I got out of Stanford was realizing that I wasn't NEARLY as big a deal as I thought I was in high school. I realized that if I wanted to do well I was going to have to put in some serious work. That's a lesson that's served me well ever since.

If I could go back and do it all over again I'd spend a bit less time on studying and lot more time on social activities to meet people outside my existing social circle. The reality is that the difference between getting an A or a B in a class is a lot less significant for your future success than widening your social circle and developing more “soft” skills.

Since graduation nobody has ever asked me what grade I got in my “Data Structures and Algorithms” class, but I've been able to leverage my Stanford friends' connections and knowledge many times throughout my career.

Public vs. Private – My Recommendation

It's impossible to justify the list price of a private university. There's no evidence that you'll get a better education at a top private university than you'd get at an excellent public university. In addition, the difference in salary, both starting and mid-career, doesn't vary much across different top schools, whether public or private.

Apply to a number of schools, both public and private, and don't make a decision until your financial aid packages have been delivered. Depending on your family's financial situation it's possible that Stanford could cost less than the University of Arizona. Or, it might be that UCLA is 1/10th the cost of USC. Once you know the actual cost to attend the various schools you've been accepted to you can decide what's the best fit.

Ultimately, a college decision should be made knowing that an excellent education can be had at many different universities, as long as the student is willing to put in the time and effort to study, work hard, and surround himself/herself with like-minded people.

Wealth Planning Recommendation

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About The Author

The Money Commando is a software nerd who's always been more interested in investing than technology. He spent the first half of his career in engineering before he realized that he’d never get wealthy unless he either started his own business or found a job where pay was linked to performance. He moved into a job in technical sales and started aggressively saving and investing with a eye towards early financial independence.

He’s finishing his CFP (Certified Financial Planner) coursework with an eye towards a possible career change in a few years. The Money Commando has set a goal of having $120,000 of passive income by July 1, 2021.

100 thoughts on “Why Do Smart Kids Make Dumb Decisions About Private School?”

  1. This was a valuable post. Thank you for writing it. This is also a topic very dear to my heart, and in which I have invested my professional life, almost entirely. I believe that by sharing we all gain.

    I am a professor of educational psychology in a high research productivity public university. Full disclosure: my pedigree is public state school BA-> Ivy #1 ranked private MA -> Large public mid-western research 1 PhD ranked 1 or 2 in my field. I had the ivy experience which was nice, but I am glad I did it only for a shorter degree. It had it’s charm and resulted with a good job and eventually a decent fellowship for my phd, but the loan was difficult to pay off.

    One thing you mentioned in this article was that private school professors were terrible teachers. The problem with this statement is that it is not qualified. I don’t believe they are poor teachers. Rather, they are not actually paid to teach undergraduate courses and generally resent it. At most research universities undergraduate teaching is a kind of occasional duty to satisfy public misinformed demand. There are no incentives to sink in the kind of time required to teach undergrads well. There are incentives to sink in the required time for doctoral students however. Doctoral students make great future colleagues. Undergrads disappear. So what you experienced was probably not a poor teacher, but rather someone drawn away from his *real* job to blather for 50 minutes because some administrator needed to satisfy a board member who complained that the tenured faculty are not teaching enough undergrads. A decent education can be found at any of these schools, but generally, learners are poorly informed about the dynamics of a university to spot what is really going on.

    great post. Just my 2 cents.

    1. That’s a solid point. The reality is that tenure is not based on teaching – it’s based on research and publishing. If there’s no incentive to be anything other than a middling teacher why spend time teaching? The incentive is clearly to maximize research, so that’s where the prof’s attention is directed.

      I think that in the case of my math professor in particular, it must have been dreadfully dull for this guy to spend an hour talking about multivariable calculus, which to him must have been the equivalent of me talking about algebra.

  2. I have attended them all, community college, a large public school and a small private university. I have to say that each had its advantages and disadvantages. I built a much better network and contacts at the smaller private school, the community college had professors who could focus individually on each student and seemed to really enjoy what they did. The large public university introduced me to the reality of being just another fish in the sea and that I would have to find my own path.

    I took a psychological test the other day and one of the questions I answered “True” without delay was “Do you have absolute confidence in yourself and your abilities?” This confidence was honed at the large public university. I agree at the author’s description of people being relatively smart at all types of schools. However at a large school, we had what they called “weed out” classes for majors like engineering (which I started in) these were classes of 500 people that were graded on a curve. The students scoring on the lower half in too many of these classes were denied being able to continue in their major. I had always felt a sense of inferiority to the other students from the suburbs and rich cities because I attended high school in a poor urban community in New York. These classes taught me that I could compete with anyone out there. I had to do the hard work and build the confidence to walk into a room with 500 smart people and know that I could walk out with the highest score in the class. That coldness and dose of reality never left me and I always knew that I had to work hard but that I could compete with he best of them.

  3. Jacob M Sondergaard

    I am currently attending a community college where I receive a terrific education. The College does not pay the professors very much which inadvertently is a good thing because it means that all the professors there do their jobs because of their love of teaching and not because of their love of money. We have former Doctors and Psychologists teaching.

  4. It is funny to read a post like this as someone who wouldn’t have stood a chance of attending any of these schools. If I was a California resident maybe I could have got into Berkeley but as an out of state student it would have been a stretch school for me. Stanford wasn’t even a consideration. There were a few people from my high school graduating class who went to private schools. The most prestigious school was a girl who went to Stanford. A few others attended liberal arts colleges that are ranked in the top 50 in US News. From what I can tell they aren’t any more successful than anyone else in our class who went to our state universities. The people who studied nursing at the state schools I would guess make more than the girl who went to Stanford. If you want to go into investment banking or consulting, then going to one of the top schools will help you get there and you will make a lot of money. If you go into any other field, however, I don’t think the school will add much to your income at all.

    1. It’s clear that attending any given school isn’t a guaranteed ticket to “success” (however you define that). The most important factors in success will always be hard work and taking calculated risks.

      1. You make a good point that success needs definition. In most of these discussions it tends to center around the amount of money you make. I think this is determined much more by your choice of career than where you went to school. For certain careers like investment banking going to certain schools can help you get in. But if you are going into almost any other career the difference is minimal if any at all. If you go to Harvard and become a teacher you will make the same salary as any other teacher in the school district you end up teaching in. My friend that went to Stanford has a great career in non-profit fundraising but she doesn’t get some kind of bonus for having gone to Stanford. She also had to work pretty hard to get into that field that she was interested in. People didn’t just offer her jobs because of where she went to school.

  5. I think looking at ROI is a bit misleading. In the Stanford vs Berkeley compsci example, the ROI is 16.2% vs 26.0%, which indeed is a big difference. However, the Stanford student still ends up with about $75,000 more after the paying the difference in tuition. So would you rather have a higher ROI or more money? I’d rather put more money into a 16.2% ROI venture than less money in a 26% return venture, if I end up with more money.

    16.2% is a really good return. The only way the math works out in Berkeley’s favor is if you could have taken the extra $75,000 and invested it at an ROI higher than 16.2%, which is very difficult.

    The other thing that is very misleading about this analysis, is that all of the schools evaluated are VERY good schools. Comparing Berkeley and Stanford is a bit like comparing Harvard and Princeton, they’re both top schools. So, the chances of getting into both, is likely low-ish. Getting into these schools is a crap-shoot.

    If you get into both, then you may do the math as discussed. But if you get into Stanford and your only public school choice isnt Berkeley, than the public school 20 year value will probably be a lot lower, and the math still might not work out.

    1. You’re absolutely right. You might not have the option of choosing between Berkeley and Stanford. These schools are incredibly competitive, and even then, YMMV on the ROI.

      I was recently told that the Behavioral Neuroscience program at UCSD was the top in the country–would someone choose UCSD over Princeton if they had the choice, and there were no scholarships in either case? Who knows if the ranking would even apply to someone in college rather than in graduate school.

      1. Good question, or would either be worth the cost for undergrad if grad school is the plan? Would they only be worth the cost if they helped a student get into a grad program at a high ranking school? How else could a 100-200K undergrad degree provide a good ROI?

  6. Does this family income basis apply to all students or just domestic students?
    In other words, are international students required to pay full price?

    1. It applies to everybody. Private schools place a premium on having a diverse student body, so they will often provide excellent financial aid to foreign students as well as domestic.

  7. Fiscally Free

    I’m sure everyone’s experience is different. But I went to a very non-prestigious public school and have been able to do everything I ever wanted career-wise.
    Tuition was incredibly reasonable, but I still managed to earn a full scholarship, so it was basically free.
    As far as I’m concerned, public school is the way to go, as long as you live somewhere with decent ones.

  8. I always thought my kids would go public all the way. Frankly nothing else really occurred to me. Until my kid (in first grade) is bored out of his mind and asking for harder with every day. the curriculum and the school believes in enrichment not advancement (for ex. In patterns – green blue yellow blue green blue yellow etc, instead of red yellow red yellow … Which to my kid is the same thing). Had him tested third party and he scored a perfect score on the wisc, which is apparently unheard of. Seems to me he learns to sit and waste time, i send him in with tons of notebooks and hope he continues to teach himself, or go to this private school for the gifted where they will put him in third grade math and reading and accelerate based on performance (he stays with his peers though, they have lots of kids who are several grade levels ahead).

    To me elementary school is about making sure he doesn’t hate school and just check out. It’s less about roi, because as long as he learns to learn and doesn’t get totally depressed and disillusioned with school (which is what is happening) I’d want to keep him in.


    1. Hi Anon,

      I stressed and worried about the same things with my daughter through grade school. Gifted kid, getting bored, poor curriculum, you name it. She is now a senior in H.S. Looking back, I realized I wasted a lot of time worrying about stuff that didn”t make a bit of difference.

      What’s made the biggest difference not only in school but in how she’s turning out as a person was love, discipline, and time.

      Thanks, Bill

  9. The Alchemist

    Another potential disadvantage of the top end private schools: The students get somewhat pampered and coddled, and as a result are prone to develop an attitude of entitlement. I have heard from several folks in Silicon Valley that their (top end) company pretty much refuses to hire Stanford graduates because they have such high opinions of themselves that they’re darn near impossible to work with.

    Obviously that’s a pretty darned broad brush to paint with, but apparently it’s got some substance to it. I’ve known Stanford grads who are fine folks, but have also experienced several of the kind noted above. It’s possible these individuals already believed they were “all that” before they ever set foot on The Farm, but Stanford does little to disabuse the little dears of that notion while they are there.

  10. SUNY system here in NY is probably the best bang for your buck public system in the country. I myself am a product of this system.

  11. Smart kids make dumb decisions because society surrounding them tells them to do it, otherwise they risk being the ostracized individual.

    My stay at home wife doesn’t want to home school our future kids. So what choice do I have? I can take them to my company have them code 6 hrs a day then spend the rest of the day doing whatever kids choose to do.

    History is not used again. 2nd or 3rd languages are never again spoken. Math equations nope. Chemistry, biology aren’t touched again. So why learn them? I feel like I’ll be hitting my kids over the head by forcing them to spend yrs learning this garbage, so public civil servant teachers have work.

    For the same reason ur genius professor does a terrible teaching job. Prestige and higher money grants are given to professor for better papers produced based on research data. So imagine ur the professor, no one will care or know about whether u prepare these kids well, or do a shoddy half job. At best 2 or 3 decades down the line a very successful former student of urs is gonna give an interview saying, “yes, professor so-so was a huge influence on me in his class. I took his lessons to heart, and it made me who I am today.” So is that compliment worth it? Or is prestige to be recruited by Google, FB and millions of dollars in grant money more worth it? Duh obviously the money and prestige. That’s why you get teachers who don’t care. The research and teaching function need to be separated from one individual to 2 separate individuals.

  12. One thing I want to mention is that if you look for it, there are still deals to be had on a college education (in-state colleges w/ merit scholarships, smaller scholarships, etc). While the time has passed for this, I was fortunate enough to have parents who invested in Florida Pre-Paid, a program where you begin paying college tuition once your child is born. So my parents paid for in-state tuition 18 years ago, and now the cost of attendance for me at my dream school (the University of Florida) will only be $6,000/year, combined with the Florida Bright Futures Scholarship. On top of this, some of my friends are attending UNF, UCF, UWF, etc on scholarship, and are even getting paid to attend! If the research is done, I’m sure incredible deals like these can be found across the country.

  13. I had great grades/GPA/test scores and I went to a public city university in Ohio. I was given a full academic scholarship and have no regrets about going. (I do have regrets that I got an anthropology degree, but that’s another story.) I doubt I would have been given a full ride at a more competitive university. My husband got his CompSci degree from Ohio State and does very well. He took out loans and paid them off 100% within 3 years of graduation.

  14. I went to public schools for undegrad/grad school. Graduated with zero debt and make more than pvt school graduates. In my experience, unless its an MBA or Law, pvt schools are Not worth it at all. I think even going to college is not the best decision depending on your personality. There are many other options that save time and earn you the same, if not more, but your decisisons have to be smart. I got into Colombia for grad school, but chose a public school, and make more than Colombia graduates that I know.

  15. Adam and Jane

    “A man’s got to know his limitations.” I remember this line from a Clint Eastwood movie and it has stuck with me through my life. I am not saying to self impose limitations on yourself but be realistic with your abilities and situation.

    I was always a B student and at age 13 I knew I wanted to be a computer programmer. I always hated school but I like programmering. I went to a local public high school and a city university with a decent computer science program. Sure, I rather attend NYU like my friends but I knew my limitations. I knew I was not smart and I knew my parents were struggling with their own business. NYU was around 15K/yr back then. It was a no brainer for me to attend a CUNY which was 1K a year in the 80’s and it cost my parents 4K for my degree. I had a 3.0 GPA. I got A’s in all of my computer programs but I sucked at remembering stuff for tests. In order for me to learn, I had to use and apply what I read. I did not understand theories and BS stuff that you had to remember to pass a test but I did well in math, physics and computer programming.

    I started at 19K as a trainee programmer and after 30 years in the same company I make now make 170K not including bonus. I am truely blessed because I exceeded my expectations. In the first 20 years, I earned 1.64m and in the last 10 years I earned 1.76m.

    My wife is also a computer science major and she worked in the same company as me. She also went to a public city university BUT she went for free because of her grades. She had a 3.73 GPA. She has many siblings and she did not even think about a private university because her parents had no money.

    I think we lucked out and did ok. We got a very good ROI by attending public universities.


  16. What about splitting the difference? I did 2 years at my local community college (actually dual-enrolled in high school) for $20 / credit or ~$700 / yr. My textbooks cost more than tuition! Plus I got to live at home. I then transferred to Cornell for my junior and senior years. Got all the benefits for half price :)

    – Cheaper
    – More room for exploring, I didn’t have to commit to a major right away
    – Learned how to be a college student (responsible for my own learning) in a low stakes environment
    – Professors are more likely to be lecturers / teaching faculty at a community college, so they might be better teachers.
    – When I got to Cornell I was mostly taking upper level classes, which are a better fit for all those prestigious research faculty – they’re less bored and get to bring in more of their own research. No guarantees that they won’t still be terrible teachers, but it’s less of a problem in upper level classes, and you sometimes get to hear about really interesting, cutting-edge research.

    – Some schools are less than generous in accepting transfer credits. Although at least in CA the community colleges have guaranteed transfer credit for certain classes with other state schools.
    – Less time to make connections
    – It’s a little weird to come in as a Junior. Most of my friends ended up being Freshmen, since we went through orientation together and I was the same age as them.
    – Fewer opportunities for research, may be harder to find internships (although there are programs aimed at community college students, you’ll probably have to do more work to find opportunities, rather than being able to just talk to an advisor / career center)
    – Harder to fit in study abroad, if you’re interested in that

    I completely agree that the most valuable things I got from Cornell were (1) the connections to other smart, hard-working people who are now doing all sorts of interesting things, and (2) the small-fish-in-a-big-pond wakeup call, realizing I’m not as awesome as I thought I was in high school and that I need to work really hard if I want to keep up. Those are both things I was able to get out of my two years.

    I would definitely do it again. Socially it would have been nice to come in earlier, but financially and educationally, two years was perfect :)

    1. I’ve always thought this is the #1 way to go for families who don’t have much money. I considered going this route as well, but even I realized $2,800 a year for tuition at William & Mary wasn’t that much. I was making $4/hour at McDonald’s and maybe up to $5/hour moving boxes for a temp agency.

      I gotta say though, I had A BLAST my freshman and sophomore year. In fact, I had so much fun all four years of college. Time of my life!

      But, you won’t know what you don’t know. So all is good!

  17. Aside from getting in that prestigious school as a prerequisite to attending, your ROI ultimately depends on how you can leverage the resources that you otherwise would not have had access to had you gone to a cheaper/public university.

    The prestige aspect plays a much bigger role if your career choice involves some sort of professional career (lawyer/doctor) if you end up working at an academic institution. For instance, I attended a top private school for college and a top Ivy for medical school and residency. Yes, the prestige aspect will give you bragging rights. Does it confer a higher ROI? Absolutely NOT guaranteed, and maybe even less likely compared to had I gone an easier route. However, it does make it much easier to remain working at any of the top institutions, sort of like an unwritten rule.

    1. May I ask what type of top institutions are your referring to? Hospitals or private practices?

      How much did you end up paying for your undergrad and medical school? Did you get grants or help from the parents? I’d love to know these financial figures, as they are often left unsaid.


      1. College, medical school, and residency hospitals. Residency hospitals don’t really count in the matter since we got a stipend of around $45k annually.

        I did get some scholarship money, but coming from a middle class family, we didn’t make the cut for need-based financial aid. I believe that college back then was roughly $23k for tuition, plus another $11k for room/board. I borrowed about 60% of all of the need, and some some work-study employment and did some software programming to pay down a huge chunk by the end of college. I didn’t really had any financial sense back then, but I just hustled.

        Medical school back then was about $50k tuition annually, along with another $10-14k room/board. HCOL area. I got some serious grant money which I didn’t consider when enrolling. I did end up getting smarter about the finance during my residency training, although I spent most of my free time doing academic research/presentations (Read: not conducive to extra income activities).

        I documented some of that here:

        In the end, I didn’t get hit that hard as many other people I know. Going to these prestigious places did give me a biased view that many (maybe even most) of my classmates had serious amounts of old money since they didn’t seem to be much concerned about money yet owned very fancy things and took fancy vacations on a $0 income during medical school. Perhaps they were also obvious to money.

          1. If you (1) went to the most prestigious institutions AND (2) now work at a high ranked institution, your coworkers and patients will unlikely care. However, completing (1) will strongly increase your chances of (2), although it is not a prerequisite.

  18. I tend to agree with nearly everything the author has to say. I went to a private school to study engineering as an undergraduate and completed my doctoral degree in an engineering discipline at a public university. After a few years in industry I went into academia. I recently posted an article about STEM degrees on my own site, based on my experiences as a faculty member and department head. One issue that is never mentioned is that of intellectual diversity. At the Stanford’s of the world, students are only exposed to others in the top percent of intellect. Attend a good state university and you are exposed to students who are good enough to get into Stanford, but also students who will find it challenging to get through the program. This is much more representative of the people STEM graduates are likely to encounter in the work place. I also agree with the writers statement about soft skills. My experience tells me that these skills are as important, or more important, than technical skills when it comes to advancement. Its certainly nice to graduate from Stanford or MIT, but STEM students will do fine graduating from a reputable state school.

    1. The reality is that hard work, good people skills, and being willing to take calculated risks will have a much greater impact on your eventual success than just about anything else. Being smart is, frankly, overrated, as is going to a top school. Those things are helpful, but neither necessary nor sufficient for financial success.

  19. Choosing a spouse and a profession are probably the two most important decisions a person will make in a lifetime. That said, parents typically have a huge influence on both decisions based on how a child is raised, the examples modeled, advice given, etc. It really is a tremendous responsibility to educate and guide, as parents generally want better for their children. My daughter got accepted at UCSD which is generally recognized as one of the top 10 public schools in the country and SoCal is where she eventually wants to live. However, we are too rich for any meaningful aid and to poor to do it without loans. It’s about 31K/year with room and board. Hard to justify when she could continue to live at home and attend state school for about 8K/year tuition. She has already narrowed her career path down to school psychology, psychiatry or non-invasive cardiology. All were selected and are being considered based on a combination of pay and quality of work life. A six figure undergrad degree just doesn’t seem to make since with the cost of grad school/med school down the road unless the undergrad school choice somehow impacted the ability to get accepted into med school if psychiatry or non-invasive cardiology are selected. Decisions, decisions…

    1. I’m assuming the $31K/year is for out of state students then? After one year, I think she can apply for in-state tuition.

      I’m impressed she already knows what she wants to do for a living as a high schooler. But as we should come to expect, desires change!

      What is the state school?

      1. The 31K is for in state tuition plus room and board, books, etc., whereas CSU Sacramento would be about 8K for tuition and books. Of course there is the cost of supporting her at home as well so it’s not really an accurate comparison to say 31K vs 8K I guess. Two years of JC would obviously be a much more significant difference. 4.0 student that will graduate HS with anywhere between 5-7 AP courses completed. I think she would probably ask why she worked so hard in HS (academically and athletically) to attend a JC or state school but she is also smart enough to understand the importance of making financially responsible decisions. Unfortunately, UCSD doesn’t have much available in the way of athletic/academic scholarships unless GPA and SAT scores are through the roof (competing against top 5-10%) with 100K(+) applications per year.

  20. Financial Panther

    It’s pretty interesting how important prestige is when you’re a student. I know in the legal world, all of us law students were always talking about where every school ranked. I have friends who just recently started law school and that’s all they care about.

    Now that I’m three years out of law school, I have no idea where any school ranks. Sure, I know certain schools are better than others. But I find that none of the older people who actually do the hiring have any idea where any school ranks or which ones are more prestigious than others, other than the fact that Harvard or something like that is better than another school.

    In my mind, choice of school is a selection effect. Someone who’s good enough to get into an elite school is probably the type of person who will do well anywhere they go. So folks going to Harvard are going to do well, simply because that’s the type of person they are inherently.

    I recall a study that Malcolm Gladwell talked about where some economists looked at students who got into both Penn and Penn State, yet opted for Penn State. They found that the choice of school had no effect on the level of income they made. In other words, the school doesn’t make you. People going into Penn are a smarter level of student and likely to have a higher income. But that’s a selection effect. If you’re good enough to get into Penn, you’ll be fine going anywhere decent, most likely.

    1. Law is the one area where it seems that ALL THAT MATTERS are GPA, school, and prestige yeah?

      I remember talking to a lawyer who worked at Sullivan & Cromwell in NYC. They were GS’s main law firm back in 1999. Not sure about today. He was pretty proud of where he worked, but then he said he wished he worked at GS, because “he’d be closer to the money!”

      What are you doing now after consulting?

  21. I think it depends on the career path.

    For me, I followed the traditional business path, getting an undergrad degree at a highly ranked public school, followed by an MBA at a tier 1 private school, then accepted an offer at one of three strategy consulting firms during the early part of my career.

    For this path, I found that it didn’t matter what the undergrad school was, but it was very important to getting into a tier 1 MBA program if you wanted to pursue i banking or strategy consulting. Most of the recruitment centered around target schools and if you didn’t attend those, it was difficult (but not impossible) to get an internship and/or job offer.

    I think this is true for law as well. For comp sci, I think it matters less. For entrepreneurs, I think it really doesn’t matter at all.

      1. After consulting, I moved into a role within megacorp running strategic planning and worked my way up to run a business unit, which is what many MBAs strive for: to manage a p&l.

        As you work yourself up the corporate ladder, I found that it makes little difference on what degrees you have or where you got it from, similar to your observations. It’s all about how impactful you are and how well you navigate your career. Consulting experience definitely helps here.

        1. Ah, if you love running a P&L, then you will LOVE running your own business. It excites me to no end to speak to a prospective client, negotiate a deal, get the best deal possible, execute, and earn. I’ve wanted to be an entrepreneur since middle school, but I went the safe route after college instead. Trying to make up for lost time!

          Almost every single moment you work on your business is a joy. I’d start a side hustle while you’re making the big bucks now!

          PS went to Berkeley from my MBA and am using almost everything I learned

          1. I went to Berkeley undergrad when business classes were still taken at Barrows. Interestingly enough, my second job was at a start-up company and my intent after getting an MBA was to return to the bay area, before I took a side turn via the consulting route. Throughout my career, I worked on creating a start-up for a client and I judge at start-up competitions, but have only recently focused on creating my own side hustle investing in real estate. Despite my successes, I’ve always respected people who could take an idea and evolve it into a business, so I enjoy reading your stories about real estate and creating financialsamurai.

            On private/public education, I recall when I first went to Cal, the tuition was $800 per semester, and throughout my 4 years there, it spiked to $1600/semester. Naturally the students protested the outlandish 100% price increase!! How little did we know at that time that we were getting a fantastic deal compared to the price of tuition today.

          2. I went to Berkeley undergrad when business classes were still taken at Barrows. Interestingly enough, my second job was at a start-up company and my intent after getting an MBA was to return to the bay area, before I took a side turn via the consulting route. Throughout my career, I worked on creating a start-up for a client and I judge at start-up competitions, but have only recently focused on creating my own side hustle investing in real estate. Despite my successes, I’ve always respected people who could take an idea and evolve it into a business, so I enjoy reading your stories about real estate and creating financialsamurai.

            On private/public education, I recall when I first went to Cal, the tuition was $800 per semester, and throughout my 4 years there, it spiked to $1600/semester. Naturally the students protested the outlandish 100% price increase. How little did we know at that time that we were getting a fantastic deal compared to the price of tuition today.

  22. Hi Money Commando. I graduated from UC Berkeley with EECS degree, I couldn’t afford the most expensive private schools even though I was accepted to MIT. I don’t think the financial aid back in my day was as comprehensive as now.
    Having a degree from a public university didn’t hurt my financial success. However, I think an EECS from Stanford would have resulted in better connections than from Berkeley. I think Stanford students probably starts more companies than Berkeley students.
    Curious why you went into sales with a Stanford CS degree rather than eventually starting your own company?

    1. As Sam has pointed out before (https://www.financialsamurai.com/a-day-job-is-so-much-easier-than-entrepreneurship/) the reality is that starting a company is fraught with peril. Most companies fail. You’ll commit 100+ hours per week to start a business that may or may not succeed. Even if it does succeed, you have to REALLY succeed to make the after-tax benefits worth your time.

      The other problem is that once you’re sufficiently advanced in your career the opportunity cost of giving up your current salary for the unknown is high. The best time to start a company is right out of school – you’d be giving up maybe $75k – $100k in salary as a STEM major. If you’re later in your career and making $250k it’s a lot hard to walk away from your salary unless you’re already financially secure.

      For me, going into sales was a lot like starting a business, but with less risk – see my article for more information: https://www.themoneycommando.com/everybody-try-job-sales/

  23. I work at a prestigious NE university. What we are is a brand par excellence. Students who go here get plugged into an amazing alumni network–that is the real value-added. It helps them immensely in finding interesting internships and eventually jobs. And the benefits last a lifetime.

    Don’t get me wrong, the teaching (I like to think, since that is what I do) is also excellent. And most professors that I personally know actually care about pedagogy in addition to being productive researchers. Here’s the thing–at the top of the food chain, you’re tend to be competitive with others in every respect–no professor wants bad students evaluations.

    The real travesty of American higher ed concerns those mediocre private liberal arts schools that charge an arm and a leg but don’t have the resources or brand of a Harvard, Stanford, Yale or Princeton.

    The basic advice is this: get into the best school you can. If it’s not an Ivy or equivalent (e.g, Stanford, the most selective liberal arts such as Amherst or Williams), you’re much better off going to a solid state school than attending an overly costly and mediocre private LAC (liberal arts college). And don’t even get me started on for-profit places…

    1. I have a really hard time understanding the value proposition of a mediocre or poorly ranked liberal arts college or for-profit college. They are more expensive than a public school while offering a similar or worse education.

      If you can’t get into a good public university directly there are lots of “back door” options. For example – SBCC (Santa Barbara City College). It is usually ranked in the top 10 community colleges in the US. It is in an awesome location (great weather, great college town, and the SBCC campus is on the water). A recent foundation enacted a program called “The Promise” that provides FREE tuition for 2 years to attend SBCC to high school graduates who live in the area. In addition to all of that, it has a program called “Transfer Admission Guarantee”. Basically if you take the required classes and achieve the required GPA you are GUARANTEED admission to a specific university in the UC program. Most SBCC students go to UC Santa Barbara, which is an excellent public university.

      Even if you had terrible grades in high school all you need to do is buckle down for 2 years at SBCC and you’re guaranteed to be able to go a great school.

    2. I benefited greatly from my prestigious NE college, but they also recruited me heavily and subsidized my life with grants and fellowships. My undergrad was precisely what I needed and got me out of a terrible environment with no hope. (Everyone else from my high school has five kids and abusive spouses and remain in that small community with no jobs on the horizon).

      My college gave me most by way of prestige. In my field, your college matters to roughly half of the folks you meet. The alumni network opens incredible doors.

      1. Didn’t know! Congrats on getting recruited and given grants! Well done.

        No prestigious university recruited after me :) I do remember one classmate was publicly lauded by a recruiter from Columbia University. He was a good looking guy who played basketball, did photography, and got great grades. His family was also wealthy. A stud with all the gifts in life.

        He’s a photographer in NYC who also did some short films. Not exactly the career I thought he’d pursue with the expensive degree, but I hope he’s pursuing his dreams.

  24. BChicagoTeacher

    I work in a high school in Chicago and you have an interesting perspective. I went to the University of Illinois to teach math, but was also thinking of doing computer science. After two computer science classes, I could not do it. I had a similar issue with my calculus class that I could not understand my professor and was unable to complete a math degree. I do have a teaching degree (English and History), but I am lucky that I moved to special education and also teach math (my favorite subject to teach). It is sad that the university did not value teaching me math to become a math teacher by having professors there for research rather than teaching. Though my female freshman math advisor told me I had no talent in math/Calculus. That’s true, but I can easily teach Algebra and Geometry. In fact, now the Gates Foundation is sponsoring some math meetings with Chicago teachers and I am able to keep up easily with the other “regular” education math teachers with a math degree.

    For grad school, since Chicago schools do not pay all or part of tuition (the suburbs do), I decided to go to grad school for 10K at Northeastern instead off 30K (Loyola Chicago) as I knew I was essentially getting the same degree and going to make the same amount of money. In fact, the University of Illinois had the same program that I went to – but I did not investigate as I knew it was going to be more than 10K and a hassle to either go to UofIllinois or somewhere downtown in Chicago to go to classes. I passed the same test as the UofIllinois teachers and got my degree.

  25. Mark me in the public school team. I went to public schools throughout my entire education. When it came time to pick a college, I knew I wanted to study business and play baseball. The baseball thing didn’t work out (to be expected). I narrowed it down to two schools, Indiana and Wash U (St. Louis). School-wise, Wash U is better but not in business.

    I ended up receiving enough scholarship to make it like I was an in-state resident. I didn’t know it at the time, but the best gift I’ve ever received was graduating without any debt. I would not have been in that situation with the Wash U choice as I would have had to take out loans to bridge the gap.

    So with that being said, I would urge all young kids looking at school to look at good public universities. It matters more what you study than where you study it. Other things that made the experience better, big school with sports teams. Even if you aren’t a fan, typically stronger sports programs = bigger school. More enrollment = more options for friends, dating, networks, etc. The last thing, and the only thing I would change about my decision would be to pick a warm weather school if you have the option.

  26. I’m not sure our experience from almost twenty years ago would still be relevant to the young people making their college choice today because the way college works has changed so dramatically.

    I went to a public commuter school in 1999, graduating on time with no debt since my grants covered the very, very low tuition (2,000 a year) and I had money Left over for books and other expenses. My jobs both on and off campus also paid enough for me to afford an apartment in NEW YORK CITY of all places. When I finished, I was able to find a job within weeks because the economy was booming.

    Fast forward to 2016, the same school charges four times the tuition and jobs for high school graduates with very little experience are scant; those available pay so little that you’re better off taking extra classes so that you finish sooner. Housing costs have more than tripled (if not more) in most areas in NYC, not to mention other living expenses.

    Of course, going to an expensive school doesn’t fix these problems; if anything, it exacerbates them. But colleges both public and private have come up with new ways to slash budgets while fattening admin pay. Many schools have created many new admin positions that somehow are needed today but not ten/fifteen short years ago. New facilities, sorry, “capital expansion projects”, that no one uses have been constructed to attract more students. Employers expect graduates to come out with “job skills” while they have been advocating cutting education funding.

    So a student, no matter how savvy, is caught between these forces that are well beyond her control. Your suggestion that students today can get educated online is overly optimistic. If you don’t have the requisite degree, your resume wouldn’t even be looked at. Then your guest writer recommends getting a degree that has more potential. But as you well know, what is popular today might not be what will be ten years down the line. Financial Engineering field were hot fifteen years ago, then were shunned around the Great Recession, but now they’ve become sought after again. These two obstacles simply do not disappear the moment the student decided to follow your advice.

    At the end of the day, people make decisions based on the information available. In this case at least, our economic structure is too warped and education opportunities too uneven that I truly believe it’s not merely the difference of smarts. (We’re talking about people who manage to get into respectable schools, but there are many who are unprepared by their high schools to even do that and thus have to resort to going to a for profit school.)

    1. The information available today states:

      1) If you can’t afford to attend private school, don’t worry about it because there are plenty of cheaper options that enable you to have similar success

      2) It’s always good to be a skilled communicator, listener, speaker

      3) It’s always good to develop high emotional intelligence

      4) The skills you learn today have fundamental basics that can be adapted for other things

      5) The value of a college education has gotten diluted

      6) It’s never been easier to create your own brand thanks to technology

  27. Go Finance Yourself!

    So many great points from this post. I’ve never seen the value of attending an expensive private school. As you point out in your post, the great schools like Harvard, Princeton, etc. have great students not because they mold students into the best through superior teaching, but because great students go there. I’ll admit I didn’t know how affordable schools like Harvard and Standford could be for low-income families and even middle-class families. That changes things if you can get a significant discount on the price of tuition. I still think great students will be successful no matter where they go.

    1. I was also surprised when I found out how inexpensive the top schools can me. They are trying very hard to fight the perception that they are just for rich white kids. The size of their endowments means they can offer amazing scholarships to low-income and even some mid-income families. For many of those students a top private school will be cheaper than a public school.

      1. I think we need to be frank though, there is an OVERREPRESENTATION of wealthy families who go to private school. What would be fascinating would be the median and average income stats of families who go to private school.

        1. Oh, absolutely. There are LOTS of rich kids at private schools. The very wealthy don’t care about an additional $50k/year to send their kid to private school vs. state school. Even if being able to put Harvard or Princeton on their kids’ resumes adds a mere 1% to their chance of success, the rich are happy to pay it.

          During my junior year there was a girl from a very poor family in my dorm. I was chatting with her one time about Stanford and she said that her 4 years there were “like a foreign exchange program for the rich”. That comment always stuck with me.

        2. According to the Harvard Financial Aid Office 60% of students receive need-based financial aid. As reported in this post families with incomes pay up to 10% of their income but I’ve heard even up to 250,000 you can get some discount of the sticker price. I would guess then that about 40% of undergrads come from families with incomes over 250,000. That is a huge over representation of wealthy students.

            1. Some of these are need-based grants, and the rest are loans. Sometimes there are some named loans offered by the university at much more favorable interest rates than what private banks or federal governmental loans can offer.

              These packages are often structured such that a lot of the grant money is offered during the first two years of college while backloading the loan portion in case you need to take out unsubsidized loans that accrue interest while you are in school.

            2. Most would be grants at the well endowed schools. If full price is 65k and your family makes 100k a year you pay 10k a year. The other 55k is a grant. It is up to you if you want to take out a student loan to pay the 10k you are responsible for or pay it out of pocket. That seems like a pretty reasonable loan amount to take on for someone from a family of that income. It is below the Stafford loan limits so they could cover all of it with low fixed interest rate government backed loans. And most people at that income will at least have a small amount set aside for their kids’ education.

              Where it gets ugly is with private schools that don’t have large endowments. I applied to one and they only offered enough aid to bring it down to my FAFSA expected family contribution. At that time the full price for a private college was running about 40k and my EFC was 25k. My family had an income of about 100k. That would have required my parents to take out PLUS loans and I really didn’t feel comfortable asking them to do that. Plus 100k seemed like way to much for a degree from a non-prestigious school. I am surprised these schools have any students at all, but I guess there are still a lot of rich people out there whose kids couldn’t get into Harvard or the other very top schools.

  28. I say – it depends. I went to a top private university and it was the perfect place for me. I have raised 7 children now 19-29 years of age and they have attended community college, state schools and private universities. Most made the correct decisions. The 2 that went to elite private universities absolutely did. The two that went to mid tear private school chose their majors without great foresite and are struggling to find satisfying, well paying careers. The community college certificate programs in some of the allied health fields like occupational therapy assistant are great deals – good choices. One son decided college wasn’t for him at all. The right decision for him. It depends. IMO parents tend to project too much of their own junk onto their kids. Stand back and let them be – even if it means biting your tongue nearly in half. Unless drug abuse, other abuse or some other serious danger is in need of intervention, be there for them, but don’t design their lives for them. It is far more interesting ;)

    1. Fascinating insights! Good advice on parents PROJECTING too much of their own junk.

      I think there’s just this great FEAR we have of providing poor guidance and having our kids regret their choices for the rest of their lives. What do kids know about college and life if they’ve never been through that stage and we have?

      The missing factor is: who paid for your education and who will pay for theirs? We NEED to talk about the cost more as MC has done in the post.

  29. MC,

    Thanks for sharing your thoughts. As I was editing the post, I zeroed in on the Prestige section.

    The last time I thought about prestige of college education was senior year in high school. After that, all I thought about was PROVING to myself and others that attending college for four years wasn’t a big waste of time and money.

    While working, I didn’t think about college prestige b/c my co-workers who went to Harvard, Princeton etc were still doing the same menial tasks I was doing the first two years at GS (getting coffee, xerox copying papers, etc).

    My analyst class was told in week one to forget about where we went to school. All that mattered now was how you performed going forward. Ever since then, all I’ve focused on were results.

    I still remember a guy my same age join my previous firm one year as an Associate, while I was an Executive Director. We studied abroad in China together in 1997, and he went to private school since childhood and graduated from Princeton. It was great to reconnect, but I was thinking to myself, what happened? Did he go the scenic route or something? I was at his level five years ago.

    It turns out, he didn’t go the scenic route. He went to a boutique investment bank, did some business development for a software company in Beijing for two years, worked at a major IB, then came to my firm. I still don’t know why he was so many years behind. The only explanation is production. In banking, you eat what you kill. If you win a deal, rank tops with your clients, bring in a big trade, you will get rewarded. It was as meritocratic an environment as one could hope for, until the financial crisis of 2008-2010.

    Focusing on prestige can be harmful, because you might get into the mindset that the prestige will help carry you forward instead of hustle. I caution students and parents alike to not be so allured by prestige. Instead, focus on actual substance.


    1. I think prestige matters a lot…to other high school and college kids. Nobody else really cares. Where you went to school MIGHT help you get your first job – all other things being equal, I’m guessing that a student from Harvard will get a job over a student from University of New Mexico (which I picked because that’s what came up when I Googled “lowest ranked university”). Employers need a way to differentiate among the large number of applicants they receive for entry level jobs. The only things that a recent graduate can put on his or her resume is where they went to school, the few jobs they had during summers and during the school year, and maybe some personal interests or projects that are relevant to the job.

      After your first job, I don’t think where you went to school matters much. You performance in your first job helps you get your second job, and that helps with your third job. I think employment is very much a “what have you done for me lately” thing.

      I am in sales, which is similar to finance in that it’s purely production based. I’ve negotiated a lot of contracts and done a lot of deals, and not once has a customer ever stopped and said, “This all looks good, but before we decide to commit to your company I have one question – where did you attend university?”. Not once during the sales process has anybody asked for a copy of my resume or asked how I did in high school or told me that getting a deal depending on if I played sports or had enough extra-curriculars.

      That’s also why I think that, to a degree, college itself is overrated. 50 years ago it was a differentiator just to have a college degree. Now there are so many people with degrees that it doesn’t help you stand out anymore. Maybe it helps you open a door to get your first job. Beyond that, all that matters is performance.

      1. Jack Catchem

        Prestige is almost worthless if you are looking at government employment. Degree & GPA are the main metrics. As long as it’s not a Trump University degree, it’s all you.

  30. “Smart, driven, and hard-working people are likely to succeed regardless of what university they attend.”

    This is so true. The schools I went to was a small unknown Methodist school in west Texas; definitely not one of the best. However, it was very inexpensive (about $8k/year for 4 years). I had no scholarships my first year, but after hard work and dedication, was able to obtain multiple scholarships in the remaining years, bringing my total tuition to about $20k for all 4 years, enabling me to graduate with no student loans. While I did not start out making a great salary ($30K government job), I joined to six figure club about 6 years into my career. I personally do not think your success depends on what university you attend. It’s hard work and drive that make a persona successful in life.

    1. Congrats on going from $30K to $100K+ in 6 years, and what I assume is before 30 years old!

      That’s a great accomplishment, especially if you live in a low cost area. What is that you do?

      1. Danielle@wenthere8this.com

        I worked a government job the first 10 years of my career auditing government contractors. I’ve since switched sides and now run the finance department for a small government contractor. I’m a licensed CPA, but I despise taxes so I chose this field. I got my MBA (from an inexpensive public school) at 28, paid for by the government. I have my real estate license because I also despise paying the realtor fees. Having my license both makes it easier to property hunt, and enables me to collect a commission on purchases. And last, I recently started a blog that I’ve been spending much of my free time on (it’s hard work!).

        However, I live in San Diego, which is not a low cost area. BUT…in my opinion, it is a great place to won property if you can afford it.

        I really enjoy reading the F/S website, and look forward to your new posts every week. It’s very motivating!

        1. As someone who hopes to be a CPA someday this is very encouraging. I am definitely going to work hard and try and get those promotions to get a nice income in a few years. I also am not a big fan of taxes so I’ll be doing auditing, but mainly of businesses.

          San Diego is a pretty expensive place to live but it is cheaper than San Francisco and the weather is much nicer.

  31. Ten Factorial Rocks

    I went to both and enjoyed my time there. I went to a private university on partial scholarship for undergrad and a public university for grad school with full financial aid with a RA stipend more than enough to cover my costs in a small univ town – all this allowed me to graduate not only debt free but with $10k in savings! This gave me a financial head start in my career compared to my peers with large student loans. Like the money commando, after the first few years, my interest in engineering faded away into a passion for investment and business leadership within the corporate world. That has made a huge difference in my income progression, which is what I would rate as the single biggest factor in my FIRE journey compared to public or private school.

  32. Ms. Conviviality

    Over a year ago, my friend’s daughter faced the decision of whether to go to Stanford or USC. My friend is upper middle class so her daughter wouldn’t be receiving financial aid. My friend went through the costs with her daughter and showed her that the rate of return wasn’t worth it for a Stanford degree. She let her daughter make her own decision knowing that the additional cost of the education would be her daughter’s responsibility because her two sibling’s college educations needed to be paid for too. The daughter chose USC and is having a great time. This past summer she got an internship with Facebook and they invited her back for an internship next summer. This is another example that success in life can be through an individual’s own efforts.

      1. I’m actually surprised by this. This year USC’s total cost of attendance is $68,711 and Stanford’s total cost is $62,801. Tuition alone is $52,283 at USC and Stanford is $45,195.

        If the only factor was financial then I would think your friend’s daughter should have chosen Stanford, as it’s actually a bit cheaper than USC. If it was based on rankings then your friend’s daughter should have chosen Stanford – as Sam points out, it’s consistently higher rated than USC.

        If the decision was based on some other factor I’d be interested to hear what that was.

        1. Jack Catchem

          I will begrudge USC this (as UCLA alumn) they are extremely giving with aid. It is very rare for someone to have no scholarships. Most off their students get very generous ones. An additional consideration is the “local network” effect. Harvard is great, but USC reigns in Southern California. Once away from So Cal everyone says “where?”

          Take into account where they want to end up. If it’s south of Santa Barbara, the rabid Trojan network is worth the buy-in cost.

      2. I would guess she must have been offered merit aid. At a lower ranked school like USC they still give merit aid to try and attract top students so they can move up in the US News rankings. If she was accepted at Stanford as well I assume she must have had pretty high grades and test scores and Stanford only offers need based aid.

  33. Jim @ Route To Retire

    I went to a public university and my experience was very good. I didn’t feel like I was missing anything that a private university had to offer. I was able to take my degree and turn it into a high-paying job in a white-collar field… all without incurring *arguably* unreasonably high student loans.

    With my 6-year old daughter, we continue to put away a small amount of money for her in a 529 plan, but I think the value of a college education can be very overrated. I’m hoping to see some type of major changes to the university situation by the time she graduates high school.

    Maybe, along the lines of what Sam mentioned, there will be a bigger focus on online classes. I would love an ability to focus on what matters and not just the mandatory required classes that aren’t relevant to your major (or life for that matter).

    More importantly though, if I can raise her right, she’ll be focusing more on working for herself and less on trying to go through college with the sole intention of trying to impress an employer.

    — Jim

    1. Christine Minasian

      LOVE that idea Jim! I teach high school kids and you’d be surprised how few have jobs or do chores around their house! I say work ethic is the most important thing to give your kids.

  34. I will be pushing my kids to the state flagship university. I had both experiences I went to a state school for undergrad, and private school for medical school. While I thrived at medical school finishing at the top, I am still paying off that debt. If had to do it again I would probably go to the in state med school as well. We also make way more to get help from any private schools, so it would be the full price for us…

  35. My guess is that Harvard and its ilk are probably worth it in the long run, for contacts as much as anything, for a large number of its graduates. What I don’t get is spending Harvard-type money on St. Whosits. There are hundreds of small liberal arts schools, usually but not always with some historical connection to some church (though few are “churchy” these days) that charge 30-50 thousand a year, as opposed to the $$5-10 thousand that public universities charge, which had none (or at least very little of) the prestige of a Harvard, Yale, or Sanford. Those are the kids who are having trouble paying student loans.

    1. Yeah I applied to a religiously affiliated small university in the Midwest. Even though they offered a 50% discount off the sticker price it was still 3 times as expensive as my state university and if you look at the US News rankings my state university was considered more prestigious. I really don’t understand why someone would go to a school like that. It seemed like a nice place and all but not worth that much money.

  36. The service academies remain a very good option for those willing to become military officers. No tuition, excellent teachers focused on teaching, leadership training throughout, entrance into a well-paying profession at graduation, the ability to serve… the list of positives is quite long.

    1. Jack Catchem

      If you have more time than money, by enlisting you become a veteran. Veterans are allowed to declare themselves independent. Once independent you are eligible for full aid because you aren’t worth anything.

      The military & VA paid for my bachelors and masters degree. Thanks War on Terror!

  37. This certainly caught my attention since I write about decision making and I have two kids with college decisions this spring (graduate/undergraduate). I was the first person in my family to go to a four year college. I chose a private college that gave me a financial package very similar to the public universities in our area. It helped that I was a good student and could swim fast ;) I also graduated in 3 years and stayed the 4th year and finished my Master’s degree. I was also a lecturer at a public university last year because I only wanted to focus on teaching and not research. My private school education has served me very well but it equaled the cost of a public university education.

    I have had both of my kids create a list of ranked goals in terms of what they need and want from their college education. They have both applied to schools and been accepted – and now we are waiting for their financial packages. I’ve written about this – but you can’t assume private will cost more – and you can’t assume out of state public schools will cost more. Right now my son could attend a public university out of state for about $15,000 (including all costs, travel, etc.) with the scholarships he was offered. If he gets an ROTC scholarship they may PAY HIM a lot of money to go to that school too – since he will still get some of the scholarships he has been offered in addition to ROTC! He is taking his ACT’s over right now to try score one point more – and it will increase a scholarship offer by $6,000 a year. Crazy.

    My daughter goes to a terrific public university in-state that costs $23,000 a year and doesn’t offer many scholarships at all. She is finishing in 3 years which helps but for grad school – we are definitely putting all 3 schools she is interested in against each other in terms of costs. She will come out with a very similar degree from each one – so the goal is to choose the school with little/no out of pocket costs to get the degree!

    My biggest piece of advice? Be their parent and not their friend when you help them make college decisions (especially if you are funding some/all of the costs!) Don’t let kids “fall in love” with a school. Have them find a few where they could be happy and wait to find out the true costs. You are not doing them any favors to allow them to go into massive debt to get a “big name” school on their diploma.

    1. Christine Minasian

      Thank you SO much for your advice! I have a senior in HS right now applying to expensive universities (65K+) just for the “name” I believe as she attends a college prep high school- where the name of the college is so important! Never mind their parents probably cannot afford it either. She just received a merit scholarship to a close Jesuit college which makes it cheaper than her attending a public school. Everyone is telling me the same thing- it doesn’t matter where they go- unless it’s the few Ivy League schools. I’m thinking we save money and go for the close scholarship school! Thoughts? I have 2 younger kids and would love to have a nice retirement!

      1. I see you said “we save money” – if you are paying or helping pay, you definitely have a say! My son applied to a university that will cost about $40K after the scholarship he was offered. It’s his #1 school. If he gets ROTC, he can go there for almost nothing. If not, he will have to pay the difference between that and our in-state university (which we will cover a good part of) and it will be about $17K/year for him if he chooses that. We had him do an amortization schedule for $50K in student loans (he plans on graduating in 3 years) and that really woke him up to the costs. We did a budget then of rent, insurance, phone, utilities, food, fun etc and showed him how much those college loan payments would negatively affect his life after college. He gets it now – I think.

      2. I think Vicki is right on – as I mentioned at the end of the article, you can’t assume that a private school will cost more than a public school. Private schools have a LOT of money. Many of them have programs that make elite private schools cost less than in-state schools.

        The only way to make the decision is to wait until you have the financial aid packages from all the schools your kids have been accepted to. Lay them all out, compare the pros and cons of each school to the total cost (after scholarships and financial aid), and then make a decision.

  38. I think it ultimately depends on the schools in the comparison. I can’t see much difference between any of the top 10 public schools (full disclosure one of which i attended) and top private schools. However there is a difference between Joe’s university and these. Its a balance.
    Sam went to a good public school and that does open doors. So did I. I live in a state with only 3 public schools all if which I’d consider mediocre( one of which i have a master’s degree from because it was free.) However my undergrad degree was from a great school out of state and it did open doors. It was also way less then top ranked private schools. I guess what I’m saying is its relative.

  39. Greg M. Tamayo

    A degree is the basic foundation of most jobs but it seems that a personality that has leadership traits takes the individual far farther in life than the educated skillset of the profession. I have friends who never made it through college but were so focused and driven, have risen to high levels of income and asset ownership. I would look first at the natural leadership skill of the person and then decide which school to attend. Mid-career pay is flat for low leadership skill workers but the driven are managing those workers and making money off of them.

  40. Trump wants to hand out vouchers and have everyone attend private schools. Go figure. It’s the silliest thing ever.

    1. For K-12, why not? Private schools on average are as cheap or cheaper than public schools (especially fully burdened with pension/health benefits for teachers forever) with better outcomes – and that’s with very limited scale of private schools.

  41. Mr. Tako @ Mr. Tako Escapes

    I attended a public university, and the quality of instruction proved to be quite good.

    However, I did learn one important thing from my time there – I learned far more outside of class than I ever did in-class.

    Personal projects and having a passion for learning mattered far more.

  42. GPA Underdog

    It’s absolutely true what you say about high school top performers no longer being big fish. That initial jolt is disheartening, and, depending on your disposition, will cause you to either sink or swim. Having done a mixture of both myself, the best inspiration is that oft cited statistic that you were top of your high school, i.e. top 1%! But really, who cares what you did in high school?

    Although you say you wish you could spend less time studying, and more time socializing, if the sands of time were turned, I’d do the exact opposite — less time socializing, and more time studying. Who says hindsight is always 20/20?

    But despite all this, I don’t think I’d ever make a different decision about where to put my money. I’d always choose to go to the elite university, not (entirely) for the vanity, but for the challenge. Although, I’d attribute a sizable portion of my current success to my university — *ahem* Quaker *ahem* — Gladwell wouldn’t agree (https://www.newyorker.com/magazine/2005/10/10/getting-in).

    He argues that those “accepted” into the nation’s elite universities are (more or less) already destined for success. The choice is really what luxury experience do you prefer? BMW, Mercedes, Rolls Royce? I think we all know which one Sam would take :-). “Rhino?! Come. Where are you boy?” I think he’s got it all figured out.

    1. I’m a big fan of Malcolm Gladwell. In fact, I have a copy of “David and Goliath” sitting right here on my desk, just begging to have a blog post written about it. So it’s probably no surprise that I completely agree with the article you posted.

      Smart, hard-working people are going to be successful regardless of career or university attended. It’s possible that a top school might add a few percentage points to your odds of success, but there are plenty of unsuccessful people who attended top schools and tons of very, very successful people who didn’t.

      1. GPA Underdog

        Bravo! Here’s to those who did, and those who didn’t. Success is for those that want it.

        I look forward to that post on Gladwell ;-)

  43. Great post! I went to a public school and had a great experience learning and networking. We all know people who have succeeded out of public and private but I think it boils down to putting in the hardwork (thats a minimum prerequisite) and most importantly networking with the right people (both friends and the professional community). I agree the cost of the private university is hardly justifiable on paper but the lifelong network at some of those schools I imagine is priceless.

  44. I think I can beat that ROI from Berkeley…. my average yearly return so far is around 44%. My in state engineering degree cost around $24,000, and I’ve averaged around $88k/yr so far after 10 years. To project a conservative 3% (for my Megacorp) annual increase in salary for the next 5 years before I plan to be FIRE, its more like 32% ROI.

    So I completely agree to focus on a public, in state, well respected school that specializes in STEM. Even if its not your true ‘passion’, suck it up for 10 years and do what you love when you FIRE. As many a new graduate will eventually realize; even if you graduate with a degree and job that is a passion today may not be tomorrow (due to personal development or the soul crushing of a company).

    1. Wayne – I couldn’t agree more. Although it’s romantic to think of college as a time of exploration and growth where you can learn about 15th century French literature, the reality is that with the cost of college as high as it is today it’s only practical to factor career and income into the choice of a college.

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