Does it make a difference to go to an Ivy League school? Rising undergraduates students are increasingly weighing the difference between Ivy League degrees vs. state school degrees, pointing to anecdotal evidence on either side of Harvard-educated CEOs such as Microsoft's Steve Ballmer, or others like Steve Jobs that went to less prestigious colleges. Currently, 11 percent of Fortune 100 CEOs have Ivy League degrees.
Does an Ivy League school education result in a higher salary and more money over time? Are Ivy Leagues worth it? The answer to this question may depend on who you ask.
Do Ivy League Graduates Make More Money?
According to a 2015 report released by the U.S. Department of Education, the median annual earnings for an Ivy League graduate 10 years after starting come in at $70,000 a year. In contrast, graduates of non-Ivy league schools had a comparative median salary of around $34,000.
However, the research wasn't always as conclusive: a 1999 study by Rand, Cornell, and Brigham Young University indicated that Ivy League graduates earned as much as 39% more than those who went to second-tier schools. However, on the flipside, Princeton professor and economist Alan Krueger and his fellow researcher Stacy Berg Dale released a study the same year with seemingly opposite findings. They found that when a student performed high enough to enter an Ivy League school but instead went to a second-tier school, they earned just as much money as their Ivy League counterparts. This study was released again in 2007 with updated data and it came to the same conclusion as the original study.
Also, data indicate that although students pay more for their Ivy League education, those schools invest substantially more into each student when compared to other schools. In fact, elite schools spend 7.75 times more on each student. That translates into $92,000 per student at Ivy League schools, versus only $12,000 at second-tier institutions.
- Ivy League colleges continue to hold their prestigious rankings as the best universities in the world--however, they may not be the best options for all aspiring students.
- Although the median salary for an Ivy League graduate is $70,000 compared to $34,000 for non-Ivy league graduates, ten years after starting school, the cost of attending an Ivy League school can also cost four times as much as a state school.
- Ultimately, choosing an Ivy League degree vs. state school comes down to a student's projected career path, the importance of networking in their field, and personal preferences.
Pro Ivy League Arguments
Those who are proponents of Ivy League schools argue that attending and graduating from an Ivy League school affords benefits that aren't easily gained from their second-tier school counterparts. Those with Ivy League schools on their resumes are definitely impressive--after all, they are the highest-ranking schools in the nation, and even in the world.
According to another popular argument, there are also networking benefits. Those who attend Ivy League schools are constantly in the presence of fellow high-performing students, who are bound to land positions at equally prestigious companies upon graduation. In addition, attending an Ivy League school often means tapping into a larger, and often stronger, alumni network that has vetted for your education and may have personal contacts at companies you're evaluating. Those contacts may open the door to jobs not available to those who attend other schools.
Anti Ivy League Arguments
Jay Mathews, a recruiter, Harvard graduate, and author of the book "Harvard Schmarvard: Getting Beyond the Ivy League to the College That is Best for You" believes that Ivy League graduates do better than their second-tier counterparts, but as the one study indicated, it's not so much because of the school.
In 2020, Harvard only accepted 5.2% of applicants, Princeton accepted 6.5%, and Yale accepted only 6.3%. Only the best, most promising students are getting into Ivy League schools. However, these students who would be successful wherever they went, and that may account for the Ivy League influence, according to Mathews.
He goes on to say that although education matters, how a person relates to customers, employees, and others is more important than his or her school of choice. Performance is far more important than education.
Cost Considerations: Ivy League vs. State Schools
In 2020, the cost to attend Harvard is approximately $51,925 per year. Without taking in to account any tuition increases over four years, an undergraduate will pay more than $200,000 for his or her Ivy League education. Contrast that with a public state school like the University of California, Berkeley, where the tuition is a mere $14,253 for in-state residents (or $44,007 for out-of-state residents). This means that a California resident attending UC Berkeley will pay closer to $50,000 for a four-year degree. These numbers do not include room and board, student loan interest, and other associated costs, but tuition itself is already four times lower at a public university than a private, Ivy League Institution.
Does an Ivy League Make Sense for Your Career?
A big consideration of pursuing Ivy League degrees vs. state school degrees also comes down to the expected career path a student wants to take. It might be true that some careers pay more for top-tier graduates, but for some careers, it may not pay off.
For example, if someone wants to be an elementary school teacher, does it make sense to go to Harvard or a local public university? Hiring managers have very little latitude on the salary offered in this case. Most public school educators operate under a union-negotiated contract where the rate of pay is tied to experience and the highest degree earned. The person with five years of experience with a master's degree is offered the same salary as the same person who earned his or her degree at an Ivy League school.
In that same U.S. Department of Education report, ten years after beginning their education, the top 10 percent of Ivy League graduates earned $200,000 or more compared to $70,000 for graduates at other schools. This is a big difference--but likely can be attributed to lucrative salaries for careers such as in technology, investment banking, and other jobs with high earning potential. If you're considering one of these careers, it may be well worth it for you to attend an Ivy League school where there is a wider margin of negotiation of job offers--such as with signing bonuses, RSUs, and more.
If you're a teacher or in another industry where salaries are non-negotiable, how long will it take to earn the $120,000 extra that you paid to go to Harvard?
The Bottom Line
Regardless of your opinion of Ivy League schools, don't forget to use good economic sense when deciding on which school is the best option for you or your child. If you can't afford a luxury car, there's no shame in purchasing an economy car: they will both get you where you need to go.