Why We Chose a College With Massively Negative Return on Investment

7 thoughts on “Why We Chose a College With Massively Negative Return on Investment”

  1. Hi Brett!
    I enjoyed reading about the joys and angst of investing in your daughter’s college education!

    The WSJ recently had an article on a survey of student loan recipients, comparing earnings of individuals within the first ten years out of college. Lib arts college recipients fared considerably less well, w a median salary of $30,000 vs. $70,000, with respect to research university graduates.

    The article puts forward all the good reasons to go to a lib arts college, and explains why the survey is not conclusive (a major drawback is that it does not compare apples w apples, like English majors w English majors…so that a parent interested in sponsoring a daughter’s studies in the humanities can’t tell if it’s better to do so at Columbia or at Swarthmore).

    Of course, it also explains why averages and medians are of less interest to parents without a large number of kids (50+?) to be sent to random schools of one type or the other… 🙂

    The point seems, overall, that sending a child to a lib arts college may indeed not be a good financial investment. But who said it needed to be one?

    1. Thank you, Alex. I think we’re saying that the financial analysis and statistics are necessary but far from sufficient for making important decisions like these, given all of the uncertainties and unquantifiable goals we have for ourselves and our children.

  2. I went to small, private college (Carnegie-Mellon) and can honestly say that without their one on one support availibilit due to their small size. I wouldn’t have made it
    Additionally, every interviewer had my education red-lined on my resume. I had an abundance of job offers. Expensive, yep, but worth every dime. I still have friends from college days because we were so small that we tightly bonded. Good decision, Dad!

  3. Just good at rationalizing. In the short term as a parent, it is easy to do what makes your children happy – but true parenting is recognizing the broader implications of a decision.
    I went to an extremely expensive liberal arts college just after high school – and spent 4 years “learning how to think critically”. What really happened was I was coddled, pampered, and not challenged at all.
    Fortunately after 3 years with massive debt and a low-paying job in the real world, I went back to a state school, got a real education (a technical degree), and understand the world much better for my time at the school of hard knocks.

    1. Thank you for sharing, Jan. One of my favorite quotes is from Ron Howard at Stanford, “…you can’t tell by the outcome whether you made a good decision.” in HBR. Do you think the decision process that led to you going to the expensive liberal arts college was flawed, or were you unlucky?

  4. Hey Brett,
    Good to see that you are sharing your wisdom. I was a bit surprised by the lack of puns though. We recently faced the same decision, so it is interesting to hear your perspective. After many pro & con tables, soul searching, financial analysis, and deep discussions, it all really came down to trying to guess what my son’s life (short and long term) would be like following both paths and then deciding which path seemed more likely to come closer to what he actually wanted in life.
    Best,
    Steve

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