The first returns from the 2023-2024 college application cycle are in the books, and the trends are clear: top colleges are accepting a huge chunk of their incoming class through early decision.
Take Duke, which saw a 28% annual increase in early applications. From 6,240 early applicants, the university accepted 802, a 12.9% acceptance rate that fills more than 40% of the incoming class of 2028. If precedent holds through the spring, Ivies like Yale and Brown have by now already admitted more than half of next year’s freshman classes.
Early Decision has become so popular because it can benefit both students and schools, albeit in different ways. For student families, early decision provides a (potentially) better shot at their top choice. If you get in ED, the grueling application process ends in December. Whew.
Colleges love ED for other reasons, and a big one has to do with finances. Unlike Early Action programs which still provide students flexibility to choose between schools, Early Decision is binding. If you apply and get in, you not only have committed to go, but you’ve also agreed to pay the full cost of tuition. This allows colleges to lock in a large tranche of their incoming class at the full sticker price. Even though about 90% of regular decision applicants receive some form of financial aid, if a family wants to pay full price, colleges are thrilled to have them do so.
Making that kind of commitment today often means agreeing to pay more than a quarter million dollars for a degree. This has led a whole generation, as noted in this recent New York Times article, to question whether the degree is worth the debt. So how do families ensure that the juice is worth the squeeze?
For many, they simply assume that the higher a college’s rank the more valuable its degree. To be fair, there are data that support this assumption. A study by Jeff Selingo and Jason Seligman through Workday show students who are accepted to top schools then major in business or law get paid 15-20% more than those who study the same things at less selective schools.
This might be why families are willing to bite the bullet and apply early to Ivies, where tuition and fees now approach $90,000 a year. These financial realities have led to growing criticism of Early Decision as another way that colleges tip the scales towards the wealthy.
But for most families with real financial constraints, there is good news: data shows that a fancy degree and the associated debt often doesn’t provide a better return on investment than a less costly degree at a less prestigious school.
Take this X post from a young professional who assumes that basically everyone from the top tiers of their respective industries went to an Ivy league college:
"The argument that very ambitious young ppl can go to a wide range of good colleges and still be fine is true. But why lie and pretend like the top tier of every industry, whether finance, tech, and especially creative fields, aren’t basically all Ivy League graduates?"
But a University of Southern California prof has been tracking CEO degrees for 20 years and responded to the tweet to say the assumption just isn’t true. Beginning in 1999, Dave Kang, then teaching at Dartmouth’s Tuck School of Business, started tabulating the colleges that CEOs of Fortune 500 companies attended. “The results were stunning,” he told Fortune magazine. In fact, CEOs are more likely not to have attended college at all than to have graduated from an Ivy. Some stats summarizing his findings:
Anecdotal advice from business leaders reinforces this quantitative view. Take Frank Slootman, who earned an econ degree from Erasmus University in Rotterdam, later completing a doctorate in Business Administration from the same school. Currently the CEO of Snowflake, a cloud-computing company that generated $3.4 billion at its IPO, Slootman feels degrees matter far less than many Americans think.
“A rigorous academic education is necessary to develop literacy, numeracy, and general capacities to learn, observe and analyze,” he writes in his book Amp It Up, which chronicles his experiences running a number of extremely profitable companies. “But, he continues:cccc.
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“...this degree usually doesn’t need to be from an elite, Ivy League, or otherwise name brand school. There are some exceptions, a few industries that really care about the snob appeal of your diploma, such as investment banking, venture capital, and management consulting. But most employers don’t care much about how highly your school is ranked. Elite graduates cost more, and most companies would rather do without the stereotypical attitudes of their graduates.”
Many families may hear that and scoff. Looking around at successful people they know, parents often assume that the only way for their kids to excel professionally and financially is through top 25 schools. And while there are undeniable signs–like the Selingo/Segliman findings above–that more prestigious degrees yield better salaries, other extensive research shows that the return on investment is not reliably better at more selective colleges.
Consider Georgetown’s Center on Education and the Workforce, a treasure trove of great information, which publishes rankings of 4,500 US schools by ROI. The upshot: degrees from higher ranked schools don’t automatically make people more money.
In an illuminating medium post about his own son’s college application journey, Martin Van Der Werf uses the tool from Georgetown (where he works as a researcher) to compare several colleges in Connecticut. In that state, Wesleyan University has a large profile as the 11th best National Liberal Arts College according to USNews. But the 40-year average value of its degree ($1,407,000) is less than that of nearby non-selective institutions such as Quinnipiac University ($1,523,000), Sacred Heart University ($1,428,000), and the much less-expensive University of Connecticut ($1,527,000).
With a degree cost of $260,000 (65k/yr), the net value of Wesleyan’s degree is $1,147,000. That is significantly less than UConn’s $1,359,000, reached after a degree cost of $168,000 ($42k annually for out-of-state students.)
Indeed, that delta of $212,000 could be the difference that allows the UConn grad to buy a home while the Wesleyan grad rents.
This is, of course, a highly reductivist way of approaching the decision. There are many variables that determine the lifetime earnings of an individual, with choice of major typically outweighing the school that delivers the degree. But given the wealth of data we do have about US colleges and their graduates today, these are certainly things that student families should factor more rigorously when they’re creating college lists.
Public perception seems to be coming around to this idea as well. Formerly, the influence of the U.S. News & World Report Ranking might have been one of the primary ways students and parents determined the value of a college. But there are signs that, as new organizations and methodologies enter the fray, families are beginning to take each of them with a grain of salt.
In a recent study on the importance of the U.S. News rankings, the Art and Science Group found a growing “gap between the premium many college leaders place” on it and the way college-bound students actually use it. As other rankings from Niche.com and Forbes have gained traction, many students refer to each of them as a different kind of data point that they triangulate to determine the rankings of their own personal college lists.
New entrants, like Time, which recently teamed up with Statista to release a list of the 100 colleges shaping U.S. leaders, even take specific salary details out of the equation. Their analysis was based on the resumes of 2,000 leaders across sectors, with results weighted for school size; small schools that produce more leaders get a bump.
And while it may be no surprise that Harvard and Stanford sit at the top of that list, too, there are lots of diamonds in the rough to discover, like Arizona State University–Tempe. Sitting 20th of 100, it produces more leaders than many more competitive name brand schools like USC (26th), Carnegie Mellon (52), or Caltech (75).
All of this is not to discourage families from aiming for the stars on their college lists. We should absolutely encourage young people to strive for the best possible outcomes for them, including attending great schools and receiving as much financial aid as possible. I would also be remiss not to note that I myself benefitted from some of the very schools and programs I am advocating families look beyond. I attended Middlebury College for my BA, and Williams College for an MA in art history. The wonderful instructors there were instrumental in helping me to earn a Fulbright Association Grant and later to complete a PhD at Stanford University .
But, at the risk of dating myself, the acceptance rate at Middlebury was 25% when I applied, not the ~13% of 2024. This means that, if applying today, I would be looking at schools like Denison University (22% acceptance rate) or Skidmore College (26%) from a competitiveness standpoint or maybe an entirely different genre of school based on my goals, interests, and finances.
As any seasoned college counselor will tell you, the best college lists have a combination of safety, target and reach schools on them. Chelsea Harder , an experienced education leader and college counselor with Headed for College , puts it this way:
“Building a balanced college list that reflects your personal preferences and priorities - not the prestige of the university brand name - is one of the most important things high school students can do. I’m confident that there is little to no correlation between a university’s ranking and a student’s likelihood to thrive there.”
But given the fact that only 692 of the 7,921 early applicants to Harvard were admitted this year, this post aims to serve as reassurance that there are many paths to professional and financial success in life. And most of them, by definition, will not begin at an Ivy League School.
