According to a report released in October by the College Board, the average tuition for undergrads attending four-year public universities jumped 10.5 percent in 2004 with the average tuition at four-year private colleges rising six percent. Over the past 10 years, the net cost of attendance has increased by $1,000 for public university undergrads and $2,000 for private-college students. These increases have pushed up the average price of attendance to $11,354 for public colleges and to $27,516 for private ones. The rising costs of attending college may lead some to question if a college degree, and in particular one from a selective university, is worth the money.
The College Board examined the difference in earnings between high school and college graduates in a separate report, and found that workers with a bachelor's degree earned a median of $49,900 in 2003. In comparison, workers with only a few years of college and no degree earned on average $35,700, and those with a high-school diploma earned an average yearly income of $30,800. In its study, the Board found that a college graduate is likely to earn about 73 percent more than a high school graduate.
"Superficially, it looks like high returns," said Associate Economics Professor David Garman, who teaches a course on the economics of higher education. "If you look at earnings of graduates from selective colleges versus non-selective colleges, it looks like a big difference."
The estimates of differences in earnings do not tell the whole story, however. "It is complicated by the fact of who attends selective colleges - high-ability
individuals who would have high earnings no matters what college they attended," Garman said. "This makes it a very hard question to answer."
A paper released by National Bureau of Economic Research and authored by Alan B. Krueger, an economist at Princeton University, and Stacy Berg Dale, a researcher at the Andrew W. Mellon Foundation, examined the 1995 incomes of 14,239 adults who had entered 30 colleges in 1976.
According to the study, students who had enrolled in colleges where the average freshman SAT score was 1200 earned about $76,800. Higher earnings, however, went to students who were accepted by the highly selective colleges, but who had enrolled in institutions where the average SAT was 1000.
"The issue has been debated for 30 years in economic literature: how much of extra earnings we know people get are determined by a person's ability and by the college they attended?" Garman said.
"The higher ability you have, the easier it is to graduate from college," he said. "The high-ability people should learn more when they graduate from college."
As a result, "the returns to college are definitely higher for high-ability students," Garman said. "This provides the whole basis for sorting - the high-ability students who get higher returns will generally attend college. Students who have the lowest ability tend not to attend college."
"The biggest advantages in attending a selective college may be for the strongest students coming from lower socio-economic classes," Garman said.
In addition to the question of whether or not students who graduate from college earn more than high school grads, studies have looked into the reasons behind the difference in returns.
"To what extent does education elevate a person's human capital - knowledge and skills - or to what extent is attending college just a signal that your ability is in the upper half of the population?" Garman said.
Though statistics on earnings are the focus of many studies, Garman believes that this topic alone does not provide a complete picture of the returns on higher education. "Just looking at earnings after college is a bad measure," he said. "There are differences in earnings, but the differences in earnings across majors are bigger than the differences in earnings across colleges."
"An engineer that attends a less selective college may have higher earnings than an art major from a selective college," he said.
"What one gets out of college is a big question," Garman said. "Most of the studies do tend to focus on earnings of graduates of different types of schools, but I would argue that's not the most important difference we should be focusing on."
Garman believes that returns other than earnings result "by attending a college that offers a wide array of possibilities.
"A student may come in thinking they want to be pre-med but later change their major to art history," Garman said. "[Having a wide array of possibilities] allows students to find out more about what their interests are, and this widens the possibilities for career paths.
"Schools that have bigger endowments per student also often have environments that benefit you even if it doesn't translate in earnings," said Garman, noting that larger endowments can lead to more outside-the-classroom learning opportunities, such as art galleries.
One factor being studied now is the influence of peers, Garman said. "It does seem that peers you interact with in college influence grade point and what you do after college," he said. "Going to different types of colleges exposes you to different types of students."
No matter what college a student attends, his or her returns will partially depend on what he or she puts in. "What is learned in college is a combination of ability and effort," Garman said. "Those who work hard get more out of it."
Senior David Steen, president of the Tufts Economics Society, agreed. "Like a lot of other things in life, the return on your investment - in this case tuition - depends on individual effort," he said. "Having the Tufts name helps, but if a Tufts student isn't diligent in going after the jobs they want, then it wouldn't matter if they went to an elite private school or a community college."
"I have friends at other schools, some public and some private, but everybody is
pretty much in the same boat," Steen said. "Those who prepared and pursued the jobs they wanted typically had greater success than those who expected them to fall into their laps."
