These students attend the University of Maryland in College Park. They were smart. 
(Sarah L. Voisin/The Washington Post)

Many parents whose kids have their eye on an exclusive, private college face a difficult question: Is it worth unloading your life's savings or having your child take on tens of thousands of dollars in student loans?

The average four-year private college costs over $42,000 a year for tuition, room and board, after all, while the average four-year public school costs less than half that -- $18,943 for in-state students, according to the College Board. So the question is really, really important, especially at a time when nearly half of recent college grads have a job that doesn't even require a degree.

Fortunately, for many Americans -- white, middle-class kids -- there's an easy answer: Don't pay more to go to a private college.

That means choosing the University of California over Pomona, the State University of New York over NYU and the University of Maryland over nearby American or George Washington.

Of course, if a student is getting a scholarship that heavily discounts the cost of attendance, the question isn't as relevant. And the answer to the question is much more complicated for kids from families in other racial socioeconomic groups.  But for white kids with well educated parents, what matters is getting a college degree, not where it came from.

For starters, take a large survey of college graduates published this year by Gallup. It asked graduates how they were doing across five different metrics, including financially, physically and socially. Eleven percent of graduates of public universities and private universities said they were "thriving" across all five. Twelve percent of graduates of U.S. News & World Report's top 100 schools were thriving, essentially the same as the rest.


The happiest people, in general, were the ones who developed a relationship with a mentor, participated in extracurricular activities or took on a major academic project -- all things you can do at any school.

The biggest predictor of whether a graduate wasn't thriving was whether he or she had student loans. Fourteen percent of those without any debt said they were thriving, compared to 2 percent of those with more than $40,000 of debt. You can't draw iron-clad conclusions from that, but those figures should be worrisome all the same for anyone thinking about taking on student loans.

What about earnings?

But these are general survey findings about well-being. What about a more precise measure: the income that college grads earn?

Alumni of selective schools do tend to make more money after they graduate. Yet it isn't clear whether that's because they learned something especially useful while they were in school because they had greater talents to begin with.

Economists Stacy Dale of Mathematica Policy Research and Alan Krueger of Princeton have examined this problem carefully.

Relying on a survey of graduates from about two dozen colleges and other data, they compared students who applied to the most selective schools when they were in 12th grade against those who applied to schools that were still selective, albeit less so. Dale and Krueger reasoned that those who applied to the most exclusive schools were more ambitious or had more potential as judged by their parents, teachers and counselors.

The two economists found that the students with more potential made more as adults, and the students with less made less -- no matter where they went to school. They conclude that how much you make depends on you, not where you get in.

Although the study concentrated on graduates of prestigious schools, Krueger wrote in an email that the logic of the study could likely be extended to other schools as well. If there's minimal to no gain to attending an elite private university, there's almost certainly zero gain from paying to apply for a less selective private university.

"When I was a resident tutor in a Harvard dorm in the 1980's, I saw a lot of students who were not serious about their schoolwork, and who wasted a lot of time with likeminded peers," Krueger wrote. "Determined students can get a good education in many places in the U.S., and graduates who are talented and hardworking often get recognized by employers."

These findings do not apply in every individual case. There's great variation in graduation rates among private colleges and among public universities, and going to a school where you're less likely to graduate puts your future earnings at risk. But these results do hold an important lesson for most kids who are white and whose parents also graduated from college -- a huge group of college applicants.

(According to the College Board, about half of students taking the SAT this year were white, and about 57 percent had parents who had at least a bachelor's degree.)

For minorities and low-income students, a more complex picture

The answer is much more complicated for blacks, Hispanics and those whose parents are comparatively less educated.

In Dale and Krueger's research, these groups did seem to make more money after attending more selective schools.

The authors suggest that attending an elite school might provide these students with access to a new social circle that provides them with more economic opportunities later in life. Children of well-educated whites might already have that access and so don't gain anything from attending an elite school. Sometimes, it's who you know.

There could be other explanations. Perhaps at selective institutions, students from different circumstances pick up from their peers a set of social cues or professional habits that allow them to fit in among America's economically secure stratum, like how to ask for an informational interview or how to tie a bow tie.

But even for these groups, there are important caveats. It's conceivable that for some, borrowing to pay tuition at a private school could be a wise decision financially. Yet the more a student has to borrow, the less likely the investment is to pay off, and borrowing for school is risky in any case. Costs can explode if a student takes longer than four years to graduate, as many do, and if the student drops out, debt can become impossible to manage. Alternative ideas -- such as starting at a community or state university, then transferring to a private one -- might also be attractive.

But if they're qualified, these students should definitely consider applying to elite colleges, which will often help them pay tuition. U.S. News compiled this list of schools that pledge to meet 100 percent of their student's financial needs in order to ensure an affordable education. The 62 institutions on the list include the Ivy League, Stanford University, the Massachusetts Institute of Technology and other very exclusive schools. Only three of the schools are public. The Washington Monthly has another list of academically rigorous schools that offer generous financial aid.

Many talented students from poor families don't realize that attending one of these schools can be affordable. The average out of pocket cost for a low-income student at the most competitive private universities is only $6,754 per year, while less competitive schools require close to $20,000 a year, according to another study.

"The majority of high-achieving, low-income students do not apply to any selective colleges despite apparently being well qualified for admission," write the authors, economists Caroline Hoxby and Christopher Avery.

Added Lydia Frank of PayScale, which collects data on salaries and education in the workforce: "Their net price for that school might be a lot lower than they think. The reputation for a school being expensive prevents students from doing that research."