Deciding Between College Prestige and Cost


Is it worth it to attend an expensive private university with a recognizable brand name if you have to borrow heavily?

That was a question that a New York Times reporter tackled in an article on Saturday entitled  Measuring College Prestige vs. Cost of Enrollment.

I wasn’t surprised that the article, which included a few observations from me, was the newspaper’s most emailed article that day. NYT readers devour any stories about prestigious colleges.

Financial Suicide

In the article, I shared the story of a family whose daughter intends to go to New York University next year. The family’s federal Expected Family Contribution is $0, which means that at least on paper the parents can’t afford to contribute anything. The dad is unemployed. The cost to attend NYU after financial aid will be  $32,000 a year for the family. And get this, the girl is turning down a full-ride to Rutgers.

Talk about committing financial suicide!

The Same 100 Schools

Among the other people interviewed in the article was a high school counselor at an affluent Chicago suburb who summed up the kinds of choices that wealthy families have when aiming for schools:


Higher-Ed Supply and Demand

It’s unfortunate that some families (mostly affluent ones) believe that there are so few schools among 2,400 four-year institutions worth attending.

This belief certainly helps these elite schools hike their prices without suffering any consequences. Frankly schools like NYU can continue to charge ever higher prices, while giving lousy aid packages, because there are always suckers who will pay any price to attend a university with a known name in New York City (or other popular big cities.)

Northwestern vs. University of Massachusetts


Northwestern University

The NYT article prompted a teenager to email me over the weekend who is agonizing about whether she should attend her flagship school or Northwestern University. Here is what she wrote:

Like many students, I am having a difficult time deciding between prestige and affordability. After reading the NY Times article, I hope that you can tell me your thoughts on my situation.

My parents have agreed to pay for 3 years of my college. I have to pay for the 4th year.

I am deciding between UMass Amherst’s Honors College and Northwestern University. I plan on studying film studies and Northwestern has a better film program and film community, but I could worth with Umass’ consortium to make my own film major through a program they have.

If I attend Northwestern, I will be $60,00 in debt. If I attend UMass, my parents have agreed to give me what they would have paid at an expensive school, so I will have $60,000 dollars after graduation to do whatever I want with.

I’m starting to realize that this decision is not about what I “want” right now or which college looks “nicer”. Yet, I am not sure if Northwestern is prestigious enough to really make a difference after college with jobs and alumni.

My Response

If I was you, I would go to UMass. I do not think any school is worth going into $60,000 worth of debt. Run a student loan debt calculator to see how difficult this will be. It will also require taking out private student loans (beyond the federal Stafford) and there is no ceiling on the interest rate as you pay it back. There are also no consumer protections for the private loans.

You can do just as fine attending your state school and getting started with $60,000 is awesome.

Smart students  who get into elite schools like Northwestern, but attend other schools will do just as well as those whose who pick the highest ranked schools. That was the message of that Alan Krueger study cited in the NYT articles. It’s not the schools that make the difference but the intelligence and drive of the students themselves.

I wrote about film schools before and I suggest you read the post and the links within it.

Do you Need to Go to Film School?

I think this is a no brainer!

What Do You Think?

Do you have any thoughts on this topic? If so, please share in the comment box below. I’d love to hear from you.

Lynn O’Shaughnessy

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  1. I am currently in a similar situation. I have been accepted to multiple state schools, some offering very generous scholarships. However, I was recently accepted to NYU. I have not received my financial aid package for NYU but I assume it will be minimal if not nonexistent. My plans are to major in economics, minor in business studies, and eventually attend a top tier law school. Since NYU is ranked as the #7 best university in the world for economics and business, would it be worth the outrageous tuition and fees? Also, will attending NYU Undergraduate help me get into the NYU Law School (ranked as the #6 best law school in the country)? Thank you very much for the help.

    1. No, no, no, no, no. Do not go to NYU. This school is not worth the price and I don’t know who says NYU is the 7th best school for economics and business but these rankings are bogus.

      You will commit financial suicide if you attend this school.

      Lynn O.

  2. I am facing this situation. My son was admitted to a name school, and at the same time to the state school. The state school will likely pay 15000 a year, which covers all tuition and fees, beyond that we might have to pay $4000 a year. The name school we have to pay roughly 65000 dollars a year. For now he is thinking going for medical school. We are debating which way to go now.

    1. Hi Harry,

      I would strongly urge you not to go into large debt for ANY school. It is so not worth it.

      You should not assume that the chances of getting into a medical school will increase by getting into an elite school. In some cases, it can hurt you. If you go to a school where everyone is equally bright it can be extremely difficult to be special and to get the kind of experiences that can help you get into medical school.

      Don’t be blinded by a brand name. And don’t sink $65,000 a year into a bachelor’s degree. It is so not worth it!

      Lynn O’Shaughnessy

      1. Lynn,

        Thanks for the comments. In our case, we will be able to pay for the cost so that our son will not have any debt after graduation. It just seems so expensive, especially when comparing with the state school offering a scholarship that covers almost everything.

        1. If you don’t sink all that money into a private school, there will be more funds available for medical school or something else of value later on. No school is worth $65,000 a year and, of course, the school will probably raise its price by 4% or so a year.

          Lynn O.

  3. Hello,
    I am currently struggling to decide between UT Austin and UT Dallas. At Austin, I will have to incur in housing and leaving expenses while at Dallas, I will only need to worry about tuition and books. I am a transfer student. I really don’t want to go into extreme debt, but I know UT Austin is a great school. My uncle says that I am more likely to get hire with a degree from UT Austin. I think UT Dallas is a good school for engineering as well. Can you provide any advise? It would be greatly appreciated. Cat.

  4. Hello,

    This site is full of good information. I started out at a community college to save so money. It was a great decision. I am transferring to a four year school now. I had been accepted into Syracuse University, but feel it’s not worth the large cost. SU will cost $108,000+ for only the two years. That seems a bit crazy. A smaller school gave me good money but the name is much less known. I hope I’m making the right decision going to the much smaller school, but who knows.

  5. My daughter has turn down all the public universities, include top state ones. Now she left between USC full price and a lib art college with some merit break. USC will cost $260K total for four years, would that worth for the sun, fun and alumni club help with a big cut on my retirement? Her Major is communication. I just wonder what kind financial situation of parents to pay for full price of private college. PS, I have another kid going to college next year.

  6. My daughter has narrowed down to Tufts (no merit aid) and Kenyon (a generous merit aid scholarship – like 75 grand spread out over 4 years) She wants to go onto journalism/government relations so I dont think the difference of Tufts or Kenyon on her resume would be that huge. Tufts is close to 60 grand a year w/ no merit aid and Kenyon would be like the cost of a state school w/ the merit aid – like 35 a year. My daughter went and visited Kenyon and loves it. The problem is my wife thinks Tufts is a better fit and is worried our daughter is saying she loves Kenyon because she knows the financial crunch Tufts would bring. I say this shows how mature and responsible out daughter is at a young age.

    1. Hi Mark,

      This an easy one. Your daughter wants to go to Kenyon and the price is doable. Why wouldn’t she go to Kenyon? I think it’s laughable that anyone would think that an employer would hire someone because she graduated from Tufts rather than Kenyon.

      Kenyon also has the added advantage of being a liberal arts college. For many students, I think liberal arts colleges rerpesent the best way to obtain a bachelor’s degree. I devote chapters in my book, The College Solution, to explaining the difference between liberal arts colleges (undergrads are No. 1 priority) and research universities (professor research is No. 1 priority, graduate education No. 2 priority, undergrads No. 3 priority).

      This seems like a no-brainer decision to me.

      Lynn O’Shaughnessy

    2. Just curious, was it Tufts or Kenyon? My daughter wanted Tufts but didn’t get in and I actually feel Kenyon is quite similar. At this time get struggle is between Kenyon and Brandeis

  7. Currently our daughter would choose big state U because it is 2 miles from our house & she knows lots of professors there, even though she knows that she would thrive more in a small school where she could get a merit scholarship but far from home.

    Throw into the mix the full rides offered to national merit kids at places like U of Idaho & Arizona St. We gave our child a budget, less than the college calculators think we can pay. But what if she can go for free to a school that is not a good fit (too big) & is too far from home (her perspective)? Would she rather have that money for graduate school or for starting out in life/career? How can she know?

  8. I have just been through the process Ben. I understand how it all works for undergrad.

    It seems to me that for medical school they still want the parents to pay so it works the same way as undergrad is that true? Are you a student and they did not consider your parents contribution?

    I now know that the formula above is very simplistic and does not really apply for many people….

  9. This is generally true for second tier nationally recognized schools vs public state schools, but not for the very best schools.

    For one case point,

    It would have cost me $30,000+ to attend the University of Illinois as an Illinois resident.

    I ended up getting a full ride based solely on financial aid to Harvard.

    Why? Because Harvard has a 30+ billion dollar endowment. They offer the best financial aid program in the nation, bar none. Make less than $65,000, pay nothing. Make up to $150,000, pay a maximum of 10% your income. Make over $150,000, and you’ll still get generous aid up to the point where you really don’t need it.

    The same applies for schools like Princeton, Yale, MIT, Stanford. Get into the top tier schools and almost guaranteed, they will be a better deal for any student for whom financial aid is a concern.

  10. Jim, I called one of the top 10 U.S. medical schools which is located in our state. They do not factor in the prestige of the school at all !! They only care about grades, mcat and what you have done. If I where you I would pick a med school that you like and call admissions. Our instate schools offer lower tuition to residents and you are considered a resident of your home state as long as you are a dependent no matter where you go to undergrad.

  11. Lynn, we are struggling with this exact issue. My youngest was accepted to a Most Competitive MA. college. Her FA package includes $31,000 in grant monies but that is all need-based. It also include Federal loans, a Perkins, a large amount of work study. We still need to come up with approx. $22,000.
    She has also been accepted to an in-State, Highly Competitive private college. They have offered her a four year renewable merit award (with no GPA requirement) of $15,000 and $24,000 in need-based grant. Our cost would be about $15,000.
    Both colleges clock in at $60,000 COA.
    She wants to go to med school so she wants to attend the Most Competitive prestigious school. I don’t know if it worth the $7000 per year PLUS much more when the older child graduates in two years. If your child wants to go to medical school is one of the top tier schools advantageous or will a college one tier down (still in the top 50) matter? Thanks so much for your wonderful insight.

  12. Private schools do not make profit from tuition monies. Many private schools spends around 100K per full time student. Monies from students covers a portion of the expenses per student. That is why many most selective private schools charge around 60K.

    Needless to say whatever these public schools are spending, some of that money comes from state (taxes), and helps subsidize the education who attends to these schools. But still I do not believe even excellent public schools (flagship universities such as Un of Maryland or Un of Michigan) are spending the kind of monies private most selective schools are spending on students and their education.

    I say everyone leverages, if they can. You would not wait till you saved enough to live in a house. Or drive a car until you have the money in the bank. Why not for education. How much safely you can leverage is up to you and your family. Reach for the sky.

  13. How much is a top engineering school in Palo Alto worth? Versus a lovely private in Dallas with tuition room board and a year abroad all free – study engineering but with the idea of a premed focus. We all keep going back and forth… so hard. Any opinions?

  14. Has the student looked into the feasibility of graduating in three years? Several of my college classmates did this to save money, using a combination of AP credits from high school that gave them advanced standing, and very diligent and strategic course scheduling — every class went towards their major requirements. Sometimes they took a course or two during the summer.

    My point is that a B.A. can be earned in three years in some cases, especially if the student has AP/IB credit from high school that will transfer. Then she’d be looking at a Northwestern film degree with no debt, vs. a UMass film degree with no debt and $60K. The UMass offer is still appealing in this scenario, but it’s not a no-brainer.

  15. Lynn,

    I understand why the NYU/Rutgers girl has made her decision. I was in a similar situation two years ago, when I was deciding between colleges. In NJ, the social pressure to go to a “name brand” institution, or really any school that isn’t Rutgers, is huge.

    I ended up turning down the Rutgers scholarship and going to the College of William & Mary, paying the same much per year as this student will be at NYU. The only difference is that I am extremely fortunate that my parents are both employed and I will (hopefully) not have to take out any loans. Nevertheless, I’m still working two jobs on campus to help my parents as much as I can. I love it here and have had many wonderful opportunities, but if I could go back two years ago, I would chose Rutgers. Every day, I think about how much money I gave up and how the quality of education is probably not too different–there are times when the guilt I feel is overwhelming. Also, many of the differences I perceived between Rutgers and William & Mary–being in a small-town environment,living in a different state several hours away from home, and having an undergraduate-focused education on a small, managable campus–are not differences that I see between Rutgers and NYU. I really hope the girl rethinks her decision about Rutgers before it is too late–at the very least, she can do freshman and sophomore year there and then transfer to NYU.

    1. I’m a Rutgers alum as well as New Jersey native, so I understand this very well. For undefined reasons, New Jersey’s college-bound students express a desire to leave New Jersey. The U of Delaware (our governor’s alma mater) is the first choice, Penn State is the second. Temple and West Virginia are the next most popular public universities.

      So, the largest numbers who want to leave New Jersey end up within half a day’s drive away. In the case of Delaware or Temple, it would be less than 15 minutes from the New Jersey state line.

      The heart of the Rutgers-New Brunswick applicant pool is the same as the heart of the Penn State or Delaware applicant pool. Those schools might cost more than twice the tuition and fees over Rutgers, but the “bread and butter” student has no better chance of getting need-based aid or merit-based aid to make up the difference. Penn State has great career services (probably the best of any school I have ever visited) but Rutgers’ are very good, too. The difference, more than $60,000, could cover grad school or a nice start on a post-college life.

      1. Thanks Stuart. I always appreciate your observations. It seems ridiculous to me to spend an extra $60,000 to get a few miles farther from home.

        Lynn O’Shaughnessy

  16. Something that wasn’t mentioned in the NYT article is the topic of where (geographically as well as specifically) you might end up working. I am confident that a University of Pennsylvania degree would not hold any cachet where I live (Alaska); it would be mistaken for a state university. Likewise, some regions of the country hold graduates of their state schools in very high regard (Michigan, for example). On a personal note, many of the middle managers at my first corporate job happened to be graduates of Jesuit colleges. As a BC grad (not their alma mater) , I was greeted warmly and received special mentoring. So, you never know what might tip the scale in your favor initially, but over the long haul it’s always your ability that counts!

  17. I think each family has to consider their financial situation. My daughter was accepted at Oberlin and Carleton colleges with no merit or financial aid resulting in tuition/room /board of $58000/year and into Lawrence University , Gustavus Adolfus, College of Wooster and Luther college with very generous merit aid packages resulting in tuition/room/board of $22,000-28,000 per year. This brings some of the later schools close to our state school numbers. She would have loved to consider Oberlin and Carleton, but financially this did not make sense. I do applaud Carleton and Oberlin for providing generous need based aid to many families, unfortunately we did not qualify.. My daughter chose to attend Luther college ,but all 4 of the schools offering merit aid would have made a wonderful choice.

    1. Susan-Had my son not decided to study Engineering, I’d have sent him to Lawerence in a heartbeat. I can’t speak for he rest, but I do know Carleton and Oberlin well. Given your situation and what I know about Lawrence, I’d certainy pick Lawrence.

  18. Lynn, the NYT article has this quote from Lawrence Katz:

    “The difference between going to Swarthmore and Penn State is greater today than it was in 1976 because there are higher returns to all upper-end skills and connections,” he said. By contrast, a larger, private, expensive nonelite university was not necessarily better than “the flagship campus of a top-notch state university.”

    He seems to be arguing that prestige IS worth the cost, in some cases. But he gives no hint of how to tell when that is the case.

  19. I find it shocking that the parents of this girl support the notion of their child graduating from college with $60,000 debt.

    Please, please, please, dear girl, do not do this. $60,000 debt will hamstring you and your future in ways you cannot even imagine.

  20. Lynn, I completely agree. As a parent, I do understand the dilemma. My daughter chose to attend a top regional university instead of a national university consistently ranking in the top 50, or to hold out for a waiting list spot at one of the very best schools in the country. I understand balancing the parent worry that if my child doesn’t go to one of these top schools, she might not have as bright of a future, against the worry of how is she (or are we) ever going to pay back the loans necessary to attend a more expensive/more prestigious school. The biggest problem I see is that there are no concrete statistics to reassure us that our children will be successful at a less prestigious school. There is no crystal ball to see that they turn out well. The countless hours of research I have done on college choice have not produced any information that made the choice any easier.

    In the end, I think it has to come down to how you view money. Are you ok with always having debt hanging over your head/your child’s head or do you believe you need to become debt free to really get ahead in life? The top 50 school would have cost an extra $12,000 for the first year and even more for the following years based on our projection of having a higher and higher EFC. That would have had her coming out of school after 4 years with at least $50,000 in school loans hanging around her neck. We didn’t want her to sacrifice her ability to get ahead and we didn’t want to take away from our retirement, so it made the best financial sense to go with the regional school and hope it turns out to be the right choice. I will let you know in a few years, but I have a feeling she will be just fine.

    1. Wendy — I bet your daughter will do just fine after turning down lesser offers from more elite schools. Only a tiny percentage of Americans attend elite schools. The vast majority of great jobs are held by people who attend state schools.

      Lynn O’Shaughnessy

    2. Wendy

      The issue with this statement “The biggest problem I see is that there are no concrete statistics to reassure us that our children will be successful at a less prestigious school.” Is that there isn’t solid evidence that an elite school WILL guarantee success. The only thing that is a know fact is a probability. It is just as likely that a really sharp student, strong enough to get into an Ivy, will be just as successful no matter where they go. Notice, that’s “just as successful,” not “successful. Although the chances are favorable, it all falls on the individual’s shoulders to make their way.

      1. Great point, Mike. A motivated student has the power to be successful no matter what school he or she attends. In fact, it seems like some of the lesser-known universities make it easier for a student to stand out from the crowd through honors work, special programs and individualized counseling/mentoring.