Breaking Down the College Transaction: Five Points for Parents

The world of higher education is changing rapidly. If you are a parent who went to college and have a child who plans on going as well, you are going to find that the landscape has changed in some pretty important ways. The most fundamental change is the cost. This single critical element has altered the incentives in the system and drastically changed the stakes for today’s high school students. As a professor who has taught at a public research university and at a private liberal arts college and as a father of four, I am living both sides of this complicated system. This is how I make sense of the transaction.

An imposing door at the University of Chicago

The Very Big Picture

The current price tag of attending Yale University for four years according to an admissions info session I attended is $315,000. (based on $73,100 per year and a 5% annual increase) To understate it, this a very high cost. There is a lot of complexity in this number because it bundles many different things (tuition, health care, dorms, etc.) While the actual price that a student and their family will pay will most likely be less than this because of financial aid, my experience is that it won’t go down anywhere near as much as you expect. This astronomical price tag is why there have been a proliferation of news articles questioning the value of a college education. Analysis of measures like ROI (Return On Investment), salary after 5 years, number of students employed one year after graduation, and 6-year graduation rates, all reflect a new focus on the economics involved. It is one thing to spend 4 years studying moral philosophy when the price tag is $25,000 and a completely different enterprise at $250,000. Focusing on salary makes sense, but ignores other ways in which a college education can improve your future. When talking about potential schools with my kids, there are 5 outcomes that we consider: an education, a degree, a social network, identity development, and a job.

Traditionally students considered an institution based on how well they would be educated. I mean this in the classical sense which entails exposing students to the knowledge and ideas created by contemporary and historical scholars. A good education also provides the opportunity to exercise the critical thinking tools of multiple academic disciplines and motivates students to participate in the generation of new knowledge. Understood this way, education is not a pathway to something else, but rather it is a good to be sought after for its own worth. It is the basis of an informed citizenry that can maintain a democracy. It is necessary for making sense of the long trajectory of humanity that we all participate in. It is a skill set that helps future graduates find meaning amidst the apparent chaos that surrounds us.

These five outcomes are independent though. That can be seen when you consider that you can be educated and not have a degree. Likewise, you can have a degree and not have an education. You can have neither. You can have both. I use the word “degree” to point to the credential that comes with a diploma. It captures the intangible value that a student receives when they are validated by a particular school for completing a particular major and at a particular level of performance (e.g., “with honors”). There is no doubt that a computer science degree from Stanford has substantial value and that you would be foolish to pay the same amount for a humanities degree from a community college — noting that this is completely independent of whether or not the education was comparable.

What else do students get from college? They often look forward to the new people that they will meet. The social network that one develops is also a critical and unique benefit that your child will be getting. Maybe you met your spouse at college. There’s a pretty good chance that your child could also. What about the friends that they will meet in their dorm and the students that they will work on group projects with? Is the prospective college likely to introduce them to peers that will help them navigate this brand new world of adulting well? The social network also includes an alumni network. Both can be a source of employment, funding for new businesses, a source for housing in a new city, or a resource for starting over if life throws you a curve ball. Not all people need the same kind of social network. Your child might benefit from an international network, or maybe a regional network is more important. Maybe they would be better served by connecting to communities of faith, race, or some other minority group with which they identify. Those communities can be a source of support through the rest of their lives and don’t exist equally in all places.

An often unexamined value of college is identity development. The college years are a very formative time for young adults. There are the explicit goals that are apparent in the marketing materials (e.g., “in the nation’s service and the service of humanity”) to which different institutions aspire. While important, you also need to consider in what ways the implicit culture of a place forms students. Some schools have a tremendous football program that students and alumni love being associated with. Other schools consider studying abroad to be a critical component of becoming a global citizen and an accomplished alumni. The extra-curricular opportunities are part of the college package and will inevitably color the person that your child will become. All of these activities and the students that they attract create an environment and reputation for a school. You probably can name examples of party schools, liberal schools, conservative schools, grind schools, schools that produce ambitious high-achieving graduates, schools whose alumni are jerks or kind or activists or fun. These stereotypes aren’t guaranteed to be reproduced in every alumni, but they shouldn’t be disregarded either. If you don’t have a good handle on the reputation of a college’s graduates, ask around. Ask alumni. Ask employers. Ask guidance counselors. Ask relatives. Try and build up a picture from your own and other’s experiences and then discuss with your child how these qualities and opportunities will affect their growth.

Finally, of course, we end up where we started with the job. All of the previous outcomes, while important, aren’t going to pay back the student loans by themselves. So thinking through what opportunities are available for graduates of a particular institution with a particular major is pretty important. The U.S. Bureau of Labor and Statistics publishes a lot of resources that indicate where the economy is going, but also consider state and local estimates as well, particularly if your child is less likely to move just anywhere to work at that job. Any college worth its price tag, has a career center that actively works to create job opportunities for its graduates (although the actual name of that center might vary a little depending on how the institution thinks of itself). A rare position justifies a stronger degree. But don’t confuse the job with financial security. The other four outcomes are critical for resiliency in the face of an uncertain future as well. It is likely that there will be a host of new jobs available at graduation that didn’t even exist when a student started let alone 10 years from now.

Thinking through it all

With this structure in mind it is possible to put the price tag in perspective. First of all, every school isn’t going to do everything well. You can’t have the value of Harvard’s degree with a deep social network in Seattle by going to the University of Chicago. If what is really important to you is getting a job in the software community in Austin, Texas, then going to Johns Hopkins isn’t the best way to spend your money even if you end up with a strong computer science degree. Likewise it is helpful to be realistic about what matters to you. If the bottom line for you is to get a job, then maybe a famous four-year college is going to charge you for things that you don’t really want or care about.

This also helps to explain some of the alternative educational opportunities that are available. For example, what about free online education like those provided on YouTube, iTunes, Coursera, Udacity etc? There are some very prestigious institutions and individuals that contribute to these web sites, including professors from MIT, Harvard, and Stanford. What these sites provide is an education, but not a job, a degree, a social network or identity development.

How does community college compare? Community college will likely provide a decent education, a basic degree and access to local jobs for a very low price. But it’s much less likely to deliver a strong social network or a focused identity development program. Compare that to enrolling in a little known online university where you will probably get a degree, but your education, social network, identity development and job prospects might not be as strong.

What about a software coding boot camp that lasts six months? Usually these kinds of programs partner with employers and are focused on providing a job upon completion. They might also provide some aspects of a social network. But they don’t do much in the way of an education, a degree or identity development. And that might just suit you fine.


So as your high school student begins to face the onslaught of SAT testing, marketing post-cards, pressure from family and friends and anxiety over the latest college rankings, remember that there are lots of colleges out there. They vary in price from astronomical to economical. Trying to sort through why you might go to one school over another can be a bewildering experience. I hope that considering how an institution provides an education, a degree, a social network, identity development, and a job helps to prioritize what schools are good fits for your personality and your wallet.

I am a professor who develops people and ideas.

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