In March and April each year, tens of thousands of prospective college and graduate students anxiously wait for acceptance into their top schools.
But the prestigious names often come with a hefty price tag, plunging many into a gut-wrenching dilemma: deciding between a big name school that could mean years of student debt or opting to pay less money for an institution with less name recognition.
“I don’t think it’s ever worth it to be mired in debt,” said Laurie Martin, director of undergraduate and graduate consulting at Stratus Prep in New York City. “Don’t get caught up in a certain name, but look at the full spectrum at what the school has to offer.”
Putting Together a Puzzle
At Stratus Prep, which counsels several hundred prospective undergraduate and graduate students each year, they stress fit above all else when advising their clients.
The counselors look at several factors, including the student’s preference for degree programs, location, class size and whether they want to attend a school that’s urban, suburban, or rural.
“It’s like putting together pieces of a puzzle and it’s specific to every person,” she said.
And, yes, finances play a major role in the students’ decisions.
“It carries a lot of weight,” Martin said. “College is always going to be an investment, but … if they could get to the same plateaued success without spending all this extra money, then certainly we would tell them to do that.”
Read more about How to Pay for Graduate School.
Big Name or Big Savings?
Despite prices, there is something to be said about graduating from the most selective and renowned universities.
It’s worth noting that seven out of the top 20 leaders – 35% — in Forbes’ World’s Most Powerful People list attended an Ivy League institution for undergraduate study.
At No. 3, President Barack Obama earned degrees from Columbia and Harvard Universities, while Amazon.com founder Jeff Bezos, No. 17, graduated from Princeton. Bill Gates and Mark Zuckerberg, Nos. 6 and 19, respectively, dropped out of Harvard and still made the list.
“There are valid reasons to choose an institution that’s more prestigious, but I don’t think it’s the prestige in itself,” said student loan expert Heather Jarvis, founder of AskHeatherJarvis.com. “There are certainly schools, the fanciest schools, that open doors that cannot be opened any other way.”
“They have a unique alumni base, for example, that may be connected to certain employment opportunities in a way that is special and that you can’t get just anywhere,” she said.
But choosing a school based on name recognition alone, however, could be a costly gamble.
PayScale ranks colleges and universities based on their returns on investment, both with financial aid and without.
Topping both lists with the best ROI is Harvey Mudd College, a private, liberal arts college in Claremont, California with 812 students.
Even though Martin and Jarvis note that prestigious schools often offer generous financial aid packages, the Ivies are outranked both with and without financial aid by smaller and lesser-known institutions. You might also calculate your own personal ROI based on your field of study, job prospects, and financial profile.
PayScale ranks Yale University’s return on investment at 60th without financial aid and 29th with. Brown University is ranked 15th without financial aid and 8th with. Among the schools consistently ranked with better ROIs are California Institute of Technology and Babson College in Massachusetts.
“ A lot of … companies are looking for something more than just a name of the school on a resume.”
Both Martin and Jarvis recommend choosing schools that have well-known degree programs in the student’s preferred industry, including state schools.For example, if you’re planning on medical school, it’s worth noting that the top medical schools aren’t always Ivies – different than business or law schools.
“A lot of the tech firms or a lot of the cutting edge companies, are looking for something more than just a name of the school on a resume,” Martin said.
Both the University of Illinois and the University of Southern California are in the top five for accounting departments she said, while the University of Wisconsin, with in-state tuition totaling less than $15,000, is ranked in the top five for education.
“People are understandably concerned about making the right decision. And it’s stressful because there are so many factors that matter,” Jarvis said. “I think that people need to consider their own goals and desires.”
And Jarvis pointed out one other factor when considering prestige versus practical.
“It can be easier,” she said, “to distinguish yourself sometimes on a smaller campus or at a campus that is less competitive.”