Is An Ivy League College Education Worth The Cost?
What are requirements for an ivy league education, how much is ivy league tuition, what are your ivy league scores or what is your ivy league gpa. Turns out none of these questions may matter.
“We have three cats. It’s like having children, but there is no tuition involved.”
-Ron Reagan
Many parents ask themselves a lot of the questions above when it comes to their kids college education: What are requirements for an Ivy League education, how much is Ivy League tuition, what are your Ivy League scores or what is your Ivy League gpa. There are many, many more.
Now it’s true, as parents one of the most important decisions we make is determining the best education for our children. An Ivy League college education is often seen as the pinnacle of success, but is it really worth the cost?
In this 3 minute post will delve into the following topics to hopefully give you a framework for answering the question above about whether an Ivy League education may or may not be worth it for your child:
The average cost to attend an Ivy League school
The amount of debt a student may have upon graduation
What salary expectations are for specific careers
The intangible benefits of an Ivy League education
Let’s get started!
What is The Average Cost To Attend An Ivy League School?
First, let's take a look at the average cost to attend an Ivy League school. According to recent research, the average cost of attendance (including tuition, fees, room and board) for the 2020-2021 academic year at Ivy League schools was $59,985. With living expenses and other fees added, the average cost to attend an Ivy climbs to $83,046.
This amount is significantly higher than the national average cost of attendance at four-year public institutions, which was $21,950 for in-state students and $38,330 for out-of-state students (credit to ChatGPT for this stat).
It’s true, there are need based financial aid programs and other potential ways to lesson this cost (that is not a topic we will dive into), but based purely on the headline numbers, the cost of an Ivy League education is clearly quite pricey.
Debt Upon Graduation
One other important consideration when looking at this cost is to think about the amount of debt you will need to take out for your kiddo in order to meet those price tags (check out our recent post which may help with this as we discussed tax efficient ways to save for your kids education and make them a millionaire for under $1 a day).
With the high cost of attendance at Ivy League schools, it's no surprise that many students take out loans to pay for their education. The average student loan debt for Ivy League graduates is approximately $30,000 to $40,000.
However, this amount can vary greatly depending on the student’s major, the amount of financial aid received, and the length of time it takes to complete their degree.
There are also the interest rates to consider which today are higher than they have been in a long time. While not the topic of this post, a higher interest rate will make it harder over the long term for the kids to pay back any potential debt they rack up during school.
It’s worth noting that cost alone doesn’t determine if an investment is worth it or not. There are a lot of things in life that may cost a lot. But what really makes something a good investment is looking at it through what return it gives you (this concept is called return on that investment or ROI for short). In the case of sending your child to an Ivy League school, the ROI would be the cost measured against what your child’s earning power for the rest of their life will be from attending that Ivy League University vs. another college.
Salary Expectations For Specific Careers
From a purely average bottom line perspective though, the average salary for an Ivy League graduate would be ~$80-$90k per year which is little different than attending a public or private institution.
However, as noted above, this “average” number is misleading, and it lumps lots of fields and careers together which have varying earnings trajectories. When we approach the ROI question for specifically for your child then, it becomes even more important to consider the major or career he or she child is interested in.
For example, should they choose to be a television reporter, their average salary will be closer to $40k, but should they choose to work in the finance or tech fields this can get upwards of $100k or more.
If your child is planning on going into a high earning field, this will immediately improve the odds of your investment and ultimately, your ROI, being worth it.
Intangible Benefits of An Ivy League Education
There are also the “intangible” benefits that people say come with attending an Ivy League school. When people speak about this, what they are really referring to the network of people you are likely to meet. The argument here being this network may down the line be able to help your child more than a network from another university.
While this is a point of view worth considering, it is hard to objectively measure and ultimately for us it comes down again to your child’s chosen field of study (which brings us back to the return on investment question).
We would argue this “connections” benefit is much more career and profession specific in terms of its value as well, and it would most help your child’s long term earning power if they were going to embark on a field with higher long term earning potential.
In a field with a lower long term earning potential, no amount of connections can help change the ROI equation much.
Final Thoughts…
While we ultimately caveat our view by saying it varies based on your specific child’s situation, unique attributes, and desired field of study, on average we would argue the cost of an Ivy League education is not worth it due to a poor ROI.
Overall, for any typical family looking to send their kid to an Ivy League school, we would consider the following questions as a starting point and approach the decision from an return on investment framework:
How will you pay for tuition? If your answer here is you will use a lot of debt, this will hurt the ROI and put more pressure on your child’s need to choose a career that earns more money in order to repay the debt they accrue. If they are getting aid or a grant of some kind, that will help lower the cost side of the ROI equation.
What is your child interested in studying? Very few of us knew what we wanted to do at 17 or 18, but if it is likely your child is more interested in a career with a lower longer term earning potential, that makes the prospect of paying for an Ivy League tuition over time that much more daunting.
What are some of the intangible benefits for your child? For us, again this comes back to what might their long term earning potential may be. For other families, there may be other considerations (what courses are offered, culture on campus, opportunities outside the classroom, etc) that better define if the choice is “worth it.”
Agree or disagree? Feel free to shoot us a note here or let us know what your thoughts are below!
