Continuing with our theme, the recently aired CNBC program, Price of Admission: America’s College Debt Crisis, illustrates that the current total outstanding debt of college students is just shy of one trillion dollars. Student loan defaults have more than doubled in the last four years and two-thirds of all students are saddled with approximately $24,000 in debt, a challenging but certainly manageable financial burden.
Costlier private schools are the often-sought aspirations of countless high school graduates. The thesis is often that private schools, particularly schools of prestige, will administer superior educational experiences, carry greater name recognition, and foster more opportunities and, as a result, are generally worth the hefty price tag. It is understandable, but is the prevailing wisdom necessarily accurate? F. King Alexander, president of California State University, believes it is not. Alexander states:
“The answer is no,” adding that high price does not mean high quality. “A lot of schools, particularly up in New York and New England, they want everybody to believe that.” He described what he called the Chivas Regal effect in which, he said, “the bottle looks great, but what’s inside doesn’t taste better. Plenty of people who are now rich and powerful went to public colleges and universities, Mr. Alexander said. “Steven Spielberg went to Cal State Long Beach,” he said. “He’s doing all right.”
As far as paying for prestige is concerned, Thomas Sowell, the estimable American economist and social critic states the following:
“You may never have heard of Harvey Mudd College but a higher percentage of its graduates go on to get Ph.D.s than do the graduates of Harvard, Yale, Stanford or M.I.T. So do the graduates of Grinnell, Reed, and various other small colleges. Of the chief executive officers of the 50 largest American corporations surveyed in 2006, only four had Ivy League degrees. Some — including Michael Dell of Dell computers and Bill Gates of Microsoft — had no degree at all. “
Granted, the number Dells and Gates sprinkled among us are very few indeed. But the competition to gain entry into the entire landscape of private universities remains phenomenally robust. Some sage advice: which college or university one elects to attend is not the grandest of bets one makes in life though it may appear so at the time. Albeit significant, it is merely one chapter of many that creates one’s entire life story.
Universities compete for student dollars and although competition does often ensure that prices serve as a trustable signal of quality to consumers, this isn’t always the case. Moreover, there are often additional factors to consider including incurring dangerous levels of debt to fund that purchase. As discussed in Part 1, Kelli Space is a demonstrative example of this in the extreme. I can’t help but recall a statement from the best-selling book Nudge: “So if some people choose wine by how much they like the label, they will not be harmed, but if many people start doing that, then wines with attractive labels will become overpriced.”
A few months ago I was in a restaurant with several acquaintances. When the bill arrived one of the girls scrutinized the tab to ensure the bill was accurate. She was a recent graduate of George Washington University and her parents had paid well over $200,000 for her illustrious education. After a few moments she took out her cell phone and began to calculate the tip on the two hundred dollar tab. It would seem to me that as much as companies might prefer to have prestigious universities listed on the resumes of their prospective employees, they would almost certainly rather have those employees possess the cognitive dexterity to calculate twenty percent of two hundred dollars without the aid of a calculator. Perhaps she would have been better served attending a public university and funneling the $150,000 saved on tuition into an investment account. Call me crazy.
John Brigantino is a graduate student in the Master of Science in Business Management & Leadership Program at the CUNY School of Professional Studies. He enjoys writing, non-fiction books, traveling and the many cultural and leisure experiences Manhattan has to offer.