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By David Ressner and Makie Ryan

Have you ever felt compelled to keep up with the Joneses? As a child, maybe you wanted the same backpack as your friend. As an adult, maybe you envied your neighbor’s new car. This natural human emotion manifests in all areas of life, including one’s choice of college. For some, the college decision is driven by the desire to attend a selective school or the misconception that a degree from a prestigious school is a requirement for a successful career.

David Ressner

David Ressner

It’s one thing to splurge on a backpack. It’s a whole different matter to overspend on something as expensive as college. Doing so can saddle students and their families with crippling debt for decades. The truth is that millions of students get high-quality educations and career preparation at schools far more affordable than the Ivy League and other brand-name universities. Conversely, many graduates of brand-name schools fail to enjoy the same success as their state university peers.

Makie Ryan

Makie Ryan

For example, Apple co-founder Steve Wozniak, former Costco CEO Jim Sinegal, and presidential debate moderator Jim Lehrer all got their starts in community college. And in 2015, when New York Times columnist Frank Bruni wrote about “the college admissions mania” in his must-read book, “Where You Go Is Not Who You’ll Be,” the 10 highest-earning corporations in the U.S. were led by graduates of Auburn University, General Motors Institute, the University of Arkansas, the University of California-Davis, the University of Kansas, the University of Missouri-St. Louis, the University of Nebraska, the University of Texas, Texas A&M, and one lone Ivy—Dartmouth.

Lending credence to those success stories is a 2012 study commissioned by The Chronicle of Higher Education and American Public Media. The study, “The Role of Higher Education in Career Development,” found that employers across all studied industries valued internships more than academic credentials. Next, in order of importance, those same employers ranked college major, extracurricular activities, and grades. At the bottom of the list was college reputation. Sadly, many students and families prioritize the least important factor, which can result in overpayment for under-preparation.

Another recent survey found that college graduates, who had the benefit of hindsight, also put a premium on practical experience. In its 2018 Alumni Survey, Gallup asked college graduates if they felt prepared for the working world and if they believed their college investment was worthwhile. Respondents who said that they felt the most prepared and who valued their education credited caring professors who made learning exciting, mentorship, career advice, extracurricular involvement and a long-term project or internship in their field.

On a related note, there is a well-documented phenomenon in education research called the “Big-Fish-Little-Pond-Effect” (BFLPE), which finds significant advantages to attending a slightly less selective school than a student might be able to get into. For example, the aforementioned enrichment opportunities—like internships—are often more accessible in smaller “ponds,” and merit aid is often more plentiful. That means better career preparation at a lower cost. Sounds like a win-win proposition!

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In other words, where you go to college is often much less important than how you go to college. And those who embrace that fact are free to consider a far broader and often more cost-effective universe of schools. This can easily save one student tens of thousands of dollars. Parents of multiple students can literally save hundreds of thousands of dollars on educating their children.

If you’re still not convinced, here’s one more bit of evidence that brand-name colleges do not create successful alumni. Rather, they tend to attract capable, ambitious people who are likely to succeed regardless of the logo on their diploma. In “Estimating the Return to College Selectivity,” researchers Stacy Dale and Alan Krueger studied students who were admitted to highly selective colleges. One subset attended and graduated from those highly selective schools. Another subset of students chose to attend less selective schools. The researchers compared the long-term career earnings of the two groups and found them to be “indistinguishable” in most cases.

The two exceptions were first-generation college graduates and Black and Hispanic graduates, but even in those cases the differences were not large. The researchers analyzed the data in multiple ways. At the high end of the spectrum, a brand-name degree appeared to increase the income of Black and Hispanic graduates by 17%, but other analyses found much smaller benefits for both minority and first-generation graduates.

If attending lesser-known schools often results in better career preparation and similar income at a lower cost, then why do students and parents continue to covet elite colleges? For the same reason many people prefer the fancy backpack or car—marketing. Popular college ranking publications often convince families that their choices are Yale or jail, Harvard or homeless.

Yale, Harvard and their elite peers are happy to let families believe that falsehood. And, in an effort to improve their standing, many schools even use ranking methodologies to guide their long-term planning. The result is mostly window dressing, not better education. So, not only are such rankings exploitable, but they often keep families from considering far less expensive schools that have as much or more to offer.

So what are students to do? From a cost standpoint, the optimal college search process depends on your financial situation. Many brand-name schools offer generous need-based aid to low-income and even some middle-income families. For example, Rice University says it will cover all tuition, fees, and room and board for families earning $65,000 or less, assuming they have similarly modest savings. For families earning $65,000 to $130,000, Rice will cover all tuition—with the same caveat about savings. Starting next year, Dartmouth will make a similar offer, covering all tuition for most families earning $125,000 or less.

Families at those income levels should search for so-called “full-need” and “no-loan” schools that strive to enroll high-caliber students, regardless of income. Like Rice and Dartmouth, those schools tend to be familiar names. And due to their large endowments, they can afford to offer generous aid. As a result, such families often find that full-need and no-loan schools have costs similar to or even less than their home-state universities.

At those same schools, many high- and even upper-middle-income families will be expected to pay full price. Those schools attract more wealthy applicants than they can admit, so they don’t need to offer aid to high- or upper-middle-income families. Full price at those schools can easily top $300,000 per child. If that’s not in the cards for your family, then you should focus your search on lesser-known, but still excellent, schools that give generous merit aid to their top applicants. While colleges and universities proudly proclaim their need-based aid policies, they tend to publicize their merit aid practices less. Good sources of information about merit-generous schools include websites like, and They key is finding merit-generous schools where your child will be among the top 25% of applicants.

Other great options for middle- and high-income families include honors colleges at your home-state university and at nearby state schools that offer in-state or reduced tuition to non-residents. This is often called tuition reciprocity.

Bottom line: Ask most corporate recruiters what they are looking for in new hires, and they’ll tell you communication skills, teamwork, critical thinking, practical experience, work ethic, and the ability and willingness to learn. It is clear that some of those qualities are best cultivated in college, but others are best learned outside the classroom and some simply come from within.

About the authors: David Ressner and Makie Ryan

David Ressner is a Wealth Advisor at Buckingham Strategic Wealth. He enjoys advising families on the financial aspects of college planning because educating children is the perfect storm of high cost and high emotion. By knowing how colleges operate, Dave is able to guide students to truly formative college experiences, while making sure the cost of college does not jeopardize parents’ long-term financial plans.

As an Associate Wealth Advisor with Buckingham Strategic Wealth, Makie Ryan works with clients to understand their financial needs. She enjoys learning about clients’ financial goals, the people in their lives, and their dreams for the future — all so she can help craft a customized wealth management plan that addresses their specific circumstances.

Important Disclosure: The opinions expressed by featured authors are their own and may not accurately reflect those of Buckingham Strategic Wealth®. This article is for general information only and is not intended to serve as specific financial, accounting, legal, or tax advice. Individuals should speak with qualified professionals based upon their individual circumstances. The analysis contained in this article may be based upon third-party information and may become outdated or otherwise superseded without notice. Third-party information is deemed to be reliable, but its accuracy and completeness cannot be guaranteed. IRN-21-2748

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