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Are Elite Colleges Worth the High Price of Attendance?

Are Elite Colleges Worth the High Price of Attendance?

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In a recent opinion piece published in USA Today, Rick Hess, Director of Education Policy Studies at the American Enterprise Institute, questions the value of attending a selective college if you’re watching online lectures from your parents’ home. Dr. Hess writes that many elite colleges market the irreplaceable experience of living on campus and if campuses are closed in the fall, those experiences and the reasons for attending go away. He further adds that less expensive universities that are more used to teaching online classes may be a better choice than an elite professor who has hastily thrown online his traditional face-to-face class, rather than work with an instructional designer to rewrite the course to conform to best practices in online teaching and learning.

Dr. Hess cites a study co-authored by himself and Joseph Fuller that questions the merits of attending a more selective institution given the small difference in the median salaries of graduates four years after graduation. Using a nationally representative data set of bachelor’s program graduates, Hess and Fuller found that graduates of open admission, minimally selective, or moderately selective institutions earned around $46,000 per year four years after graduation. Graduates of very selective institutions earned approximately $51,000 per year representing a 10% premium.

When comparing the 2008 graduates to an earlier cohort from 1993, the salaries of the graduates from the open admission and minimally selective institutions increased by $3,000 or seven percent, while the salaries of graduates from moderately selective institutions decreased by $1,000 per year compared to the same group. If there’s a catch, according to the authors, it’s that students attending less selective institutions have a lower chance of graduating in six years than students attending very selective schools.

Dr. Hess notes that less than 25% of all bachelor’s degrees are earned at very selective colleges and universities. Four years of tuition at the less selective institutions can be covered by a year or two of tuition at the very selective institutions. He warns that students should consider whether or not a premium price is worth it.

Dr. Hess’ article is not the only article voicing a concern about the merits of paying more for an education at a private college if it’s offered online. In last week’s New York Times, Kevin Carey authored a piece about the strategies of private colleges to use elaborate enrollment management and tuition discounting strategies to entice students to attend, sometimes borrowing millions to build campus amenities that may prove costly if attendance drops because of a fear that campuses will not open this fall. Ryan Craig elaborates further in an article published in Forbes.com that the student market is more likely to move toward programs of study that lead to guaranteed employment than to enrollment at elite colleges.

Despite some of its flaws, the expanded College Scorecard now provides data on earnings of graduates from the colleges tracked. Georgetown’s Center on Education and the Workforce ranked 4,500 U.S. colleges and universities based on the cost of attendance and the median earnings of graduates as reported by the Scorecard and extrapolated over an average working career. As more data is available and more researchers report similar outcomes, it is inevitable that prospective college students will consider the relative value of paying a premium for a name versus an outcome. The multi-billion-dollar question is “Who will change quicker? Students or colleges?”

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Wally Boston Dr. Wallace E. Boston was appointed President and Chief Executive Officer of American Public University System (APUS) and its parent company, American Public Education, Inc. (APEI) in July 2004. He joined APUS as its Executive Vice President and Chief Financial Officer in 2002. In July 2016, he retired as APUS president and continued as CEO of APEI. In September 2017, he was reappointed APUS president after the resignation of Dr. Karan Powell. In September 2019, Angela Selden was named CEO of APEI, succeeding Dr. Boston who will remain APUS president until his planned retirement in June 2020. Dr. Boston guided APUS through its successful initial accreditation with the Higher Learning Commission of the North Central Association in 2006 and ten-year reaccreditation in 2011. In November 2007, he led APEI to an initial public offering on the NASDAQ Exchange. During his tenure, APUS grew to over 100,000 students, 200 degree and certificate programs, and approximately 90,000 alumni. In addition to his service as a board member of APUS and APEI, Dr. Boston is a member of the Board of Advisors of the National Institute for Learning Outcomes Assessment (NILOA), a member of the Board of Overseers of the University of Pennsylvania’s Graduate School of Education, a board member of the Presidents’ Forum, and a board member of Hondros College of Nursing and Fidelis, Inc. He has authored and co-authored papers on the topic of online post-secondary student retention, and is a frequent speaker on the impact of technology on higher education. Dr. Boston is a past Treasurer of the Board of Trustees of the McDonogh School, a private K-12 school in Baltimore. In his career prior to APEI and APUS, Dr. Boston served as either CFO, COO, or CEO of Meridian Healthcare, Manor Healthcare, Neighborcare Pharmacies, and Sun Healthcare Group. Dr. Boston is a Certified Public Accountant, Certified Management Accountant, and Chartered Global Management Accountant. He earned an A.B. degree in History from Duke University, an MBA in Marketing and Accounting from Tulane University’s Freeman School of Business Administration, and a Doctorate in Higher Education Management from the University of Pennsylvania’s Graduate School of Education. In 2008, the Board of Trustees of APUS awarded him a Doctorate in Business Administration, honoris causa, and, in April 2017, also bestowed him with the title President Emeritus. Dr. Boston lives in Owings Mills, MD with his wife Sharon and their two daughters.

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