Are Liberal Arts Colleges Worth The Price Tag?

I visited with the head guidance counselor at a well-regarded private high school in Madison. Amongst our topics of conversation was the trend he has noticed away from private colleges. Students were being accepted to Ivy League and other top colleges, then choosing not to attend, in favor of larger state schools. As you might imagine, the main reason for their decision was financial.

These families are already paying $10,000/year to send their child to high school. Their coffers are strained if not empty. Yet, perhaps there are hidden factors that, if revealed, would sway these parents and students to choose a private college.

A March 2012 article by P. Maloney, “Does it Pay to Attend an Elite Liberal Arts College?” explored the benefits of an elite liberal arts education. In this article, Maloney asks an important question: Is it worth the $50,000 price tag to send your child to one of these elite schools? I have asked a similar question previous articles and concluded rather unscientifically that it was worth the cost to attend an elite school.

Maloney’s more rigorous study supports my conclusions. He evaluated many major studies (a.k.a. the “literature”) on the subject, performed his own multi-faceted statistical analysis, and concluded that although attending an elite liberal arts college might not lead to higher earnings directly out of college, a statistically significant difference arises by the middle of a person’s career. Maloney points out that this finding is similar to that of Brand and Halaby (2006), another major study which found that the effects of attending an elite college on a person’s wages increased over time.

Maloney admits that his study is limited in that “the number of individuals in the [study group] that attended an elite liberal arts college is rather small compared to the number that attended other types of schools. This may limit the scope to which these results can be extended.” More research is clearly needed. However, the results are indicative of a trend toward higher career earnings that could influence families’ decisions about where to send their children to college.

If your child were accepted to both an elite private liberal arts college and a state school, how would you make your decision? What factors would you consider? If you knew that your child’s earnings potential would ultimately be significantly higher from attending an elite liberal arts college, would you still choose a state school or other less expensive option?