Is University Prestige Really That Important?

A degree from a prestigious university might look great on the wall, but does it offer any real advantage in life? The answer to that question might once have seemed obvious. More recently, though, researchers have begun to take a serious look at the evidence, with some surprising results.

Consider, for example, the 2014 Gallup-Purdue Index, which surveyed nearly 30,000 graduates on how they were faring in their careers and the rest of their lives. The report’s conclusion: “It's not 'where' you go to college, but 'how' you go to college.”

Next, in 2015, came a widely discussed book with a similar title and message, "Where You Go Is Not Who You’ll Be: An Antidote to the College Admissions Mania," by The New York Times columnist Frank Bruni.

“For too many parents and their children, getting into a highly selective school isn’t just another challenge, just another goal,” Bruni wrote. “A yes or no from Amherst or Dartmouth or Duke or Northwestern is seen as the conclusive measure of a young person’s worth, a binding verdict on the life that he or she has led up until that point, an uncontestable harbinger of the successes or disappointments to come.”

Key Takeaways

Research shows that it's less about which college you go to when it comes to success and happiness.
The New York Times columnist Frank Bruni concluded that a highly selective university is neither a prerequisite to success nor a guarantee of it.
In fact, many of the CEOs of the top 10 largest Fortune 500 companies and Inc.'s top 10 fastest-growing private companies did not attend Ivy League schools.
Beware the popular U.S. News' Best National Universities list, says Bruni, as it "largely subjective" and “easily manipulated."
Reports indicate that factors other than university prestige, such as mentorship and career advice at university are more important.

Who Went Where

Bruni marshaled evidence from a wide assortment of fields, including business, politics, and the arts to show that a degree from a highly selective university is neither a prerequisite to success nor a guarantee of it.

For example, he noted that the CEOs of the 10 biggest companies in the Fortune 500 mostly attended state schools for their undergraduate degrees. As of 2022, this is primarily still the case. Below are the top 10 Fortune 500 companies in 2022, listed with their CEOs and the CEOs' undergraduate university.

Walmart: Doug McMillion - University of Arkansas
Amazon.com: Andrew R. Jassy - Harvard University
Apple: Tim Cook - Auburn University
CVS Health: Karen S. Lynch - Boston University
UnitedHealth Group: Andrew P. Witty - University of Nottingham (UK)
Exxon Mobil: Darren Woods - Texas A&M University
Berkshire Hathaway: Warren Buffett - University of Pennsylvania
Alphabet: Sundar Pichai - Indian Institute of Technology (Kharagpur, India)
McKesson: Brian S. Tyler - University of California, Santa Cruz
AmerisourceBergen: Steven H. Collis - University of Witwatersrand

Smaller, more entrepreneurial outfits are no different. Looking at Inc. magazine’s 2021 list of the fastest-growing private companies in America, it turns out of the 10 highest-ranked companies, only two CEOs (Keith Cooper–CEO of Revolutionary Clinics–and Colin Walsh–CEO of Varo Bank) attended Ivy League colleges as undergraduates.

U.S. News is well known for its college rankings, but Bruni is among its harshest critics, calling them “largely subjective,” “easily manipulated,” and “about vestigial reputation and institutional wealth as much as any evidence that the children at a given school are getting an extraordinary education...”

The Grading Game

U.S. News may be the most prominent arbiter of the nation’s universities, but it hardly has the field to itself. Other magazines, including Money and Forbes, plus an assortment of websites, also rank schools on various measures.

Payscale.com, for example, calculates what it calls a “20-year net ROI” for over 2,000 colleges and universities, based on the salaries reported by visitors to its website. Net return on investment (ROI) refers to the difference in median earnings over 20 years between someone who graduated from that college and someone who only finished high school, minus the school’s total four-year cost.

Perhaps not surprisingly, its list favors schools with high concentrations of majors in well-paying fields, such as engineering. MIT, the no. 2 rated school by U.S. News for 2022, holds the no. 1 spot on Payscale.com's ROI list.

It's worth pointing out that the founders of many of the most successful companies of the past 20 years dropped out of university, such as Bill Gates, Steve Jobs, and Mark Zuckerberg.

But the U.S. Military Academy, SUNY Maritime College, and Colorado School of Mines, all in the top 10 on Payscale.com's ROI list, might come as surprises to anyone familiar with the U.S. News ratings where only the Colorado School of Mines makes the list of Best National Universities at no. 83.

The highest-rated Ivy League school on Payscale’s list is Princeton at no. 15, while Harvard turns up at no. 19. Payscale also allows visitors to sort by major and learn, for example, where an art major can expect to get the best ROI for their four years.

Even the Brookings Institute got into the grading game in April 2015 with a report called “Beyond College Rankings.” It assessed how attending a particular college affected a student’s future earning power when compared with similar students at other colleges.

The 20 four-year schools that added the most value in terms of mid-career earnings, Brookings found, didn’t include a single Ivy. Other prestigious universities were represented, such as Caltech, MIT, Rice, and Stanford, but the rest were mostly middling performers in the selectivity sweepstakes.

What Matters More

To many critics within academia, as well as the “real world” of business, almost any type of rating misses the point. What’s more important than a school’s prestige, they argue, is the effort a student puts into their time there.

That includes taking advantage of opportunities such as internships and study-abroad programs and getting to know (and becoming known by) the right faculty members. A motivated student can get a great education at a supposedly so-so school; an unmotivated student can get a so-so education even at a highly selective one.

The 2018 Strada-Gallup Alumni Survey report (previously the Gallup-Purdue Index report) highlights meaningful mentorship, career advice, and academic challenge during a student's time at school as measures of success after graduation.

Still, many parents remain convinced that getting into a top-tier school is essential to their children’s success in life, especially on the career front. And they’re willing to do—or spend—whatever it takes to make that happen; hence the booming industry of SAT tutors and college admissions consultants.

This desire is perhaps best seen through the 2019 college admissions bribery scandal that revealed many wealthy individuals, including many celebrities, paid into a scheme that bribed admissions officials at universities in return for accepting their children.

A Gallup and Lumina Foundation poll from 2013 illustrated the disconnect between perception and the actual working world. When American adults were asked how important they thought a job candidate’s alma mater is to hiring managers, 80% said it was either very or somewhat important.

But when Gallup put the same question to business leaders, the people who are actually in a position to offer graduates jobs, the results were strikingly different. A majority of them, 54%, said it was not very important or not important at all.

How Do I Know the Prestige of a University?

Prestige is a factor with no specific metrics. However, a university can generally be deemed prestigious when several attributes are present. Perhaps the most important is reputation. A university with a good reputation historically and consistently receives accolades in research and academics and produces high-performing graduates. Another important component of prestige is how restrictive the university or college is at selecting its student body. Prestigious universities typically receive more applications than available seats, and applicants with the best GPAs and admission test scores are selected. In addition to training the brightest minds, a prestigious university also has the best of the best faculty to train them.

How Much Does University Prestige Matter?

According to a 2013 poll conducted by Gallup and the Lumina Foundation, approximately 54% of business leaders do not believe that the prestige of the university matters when considering an applicant for employment. On another note, prestige may matter more to the student for personal reasons.

What Are the Prestigious Universities Called?

In the United States, the most prestigious universities are members of an elite group known as the Ivy League, situated in the northeast. The Ivy League is comprised of eight private universities: Princeton University, Columbia University, Harvard University, Yale University, University of Pennsylvania, Dartmouth College, Brown University, and Cornell University. Today, these institutions are highly regarded for their academics and for churning out some of the brightest minds; however, the Ivy League was not formed because of the schools' academic achievements; rather, it was formed because of their outstanding sports performance. Despite their popularity, Ivy League members do not own exclusive rights to prestige as there are many other highly-regarded institutions. For example, Stanford and Massachusetts Institute of Technology (MIT) rival with several Ivy League universities.

The Bottom Line

For many students, a degree from a “prestigious” university is no longer a ticket to success and happiness, if, indeed, it ever was. Numerous, less vaunted schools can prepare them just as well for their careers and lives. While a degree from top schools may be a shortcut, students at any school who play an active role in the process and take full advantage of the opportunities those four years can provide have a leg up on those whose best effort ends at acceptance.