Saturday, May 29, 2010
Student loan nightmares
Here. I suspect a lot of students take on more debt than is economically justified in order to pay for school expenses. Suppose for example a student could go to Harvard for 50K a year or UCLA for 25K a year. (This is a hypothetical -- I don't think any of my kids is going to apply to Harvard.) Would the advantages of Harvard be worth the extra 100K in terms of lifetime earnings? I don't know but I suspect not.
Several years ago, I heard a lecture by Robert Zemsky, presenting research on the economic spectrum of college choices. (Sorry, long ago, so I no longer have a link.) It's true that graduates of the most highly ranked schools earn a lot more, but that is almost entirely because so many of them go on to get medical or law degrees. For graduates who don't, there is little benefit to a super-pricey undergraduate education.
Of course, it may be true that your chances of getting into a top-flight professional program are greater if you're applying from a top-flight undergraduate institution. But it is equally likely to be true that if you've had to borrow close to six figures to get a four-year degree, you can't afford to borrow that much and (usually a lot) more to get a post-graduate professional degree.
Posted by: Linda | May 31, 2010 5:37:22 PM
"there is little benefit to a super-pricey undergraduate education": do you suppose that is because the quality of undergraduate education doesn't usually matter, or because the education is no better at a super-pricey joint anyway?
Posted by: dearieme | Jun 1, 2010 7:05:18 AM
"I don't think any of my kids is going to apply to Harvard": Oxford then?
Posted by: dearieme | Jun 1, 2010 7:06:11 AM
I think there is a tier of university for which this is worthwhile. For instance, I had my choice of a full-ride scholarship to Berkeley, or could pay my own way to MIT. Was the MIT degree worth the added cost (which I offset with an ROTC scholarship and military service)? Absolutely. But then, that may just be the exception that proves the rule.
Posted by: Andy | Jun 2, 2010 12:37:35 PM
This mess is the result of misguided Federal policy, based on the myth that everyone should go to college. This article doesn't mention the new Income Based Repayment options, ( IBR, see http://www.ibrinfo.org/ ), which weren't available when Ms. Munno was in school. But taxpapers are going to probably going to take a bath on IBR.
Posted by: Ken D. | May 31, 2010 1:50:30 PM