Tuition Worth Paying

This weekend, hordes of parents descended on the icy walks and ivied walls of Fair Harvard to visit their children’s classes, meet their children’s friends and—if they were anything like my parents—sleep in their children’s dorms. And while attempting to live the lives of their little Harvard students, the parents also swarmed Science Center B for some special speakers and informative events organized by the Junior Parents’ Weekend Committee, a coalition of students determined to make parents’ stays as enjoyable and informative as possible. These events gave parents another insight into the world at Harvard, and also gave them an opportunity to ask questions about University policy and the lives of their sons and daughters.

Near the end of one Science Center B panel on Saturday—six juniors at the College discussing “Things We Never Thought We’d Do: True Stories of Life at Harvard”—a concerned parent asked an intriguing question. He had heard the panelists praise Harvard for its brilliant students, but he wanted to know whether any professors had made an impact on these juniors—noting that the high costs of Harvard’s tuition help pay for professors, too.

It quickly became clear that underlying many parents’ concerns about Harvard’s resources was the question: “Is Harvard worth what we’re paying for it?” (It was no surprise that tuition checks were on parents’ minds—even the panel’s pamphlet supplement proclaimed itself “Courtesy of the Junior Parents’ Weekend Committee and, indirectly, Your Tuition Checks.”) The question is appropriate, given that students without financial support from Harvard had to dole out $18,350 for tuition, room, board, fees and health insurance for the spring semester alone. Parents are forced to wonder whether they should have sent their children to a public school for a fraction of the cost—the University of California at Berkeley, for example, costs about $22,400 a year for an out-of-state student and $3,663 for a resident of the Golden State. Would Berkeley, for one-tenth of the bill, have been a better deal for the Californians at Harvard?

Economists argue that there must be large benefits from attending elite, selective, private schools because people want to attend them—a lot of people. If Harvard wasn’t worth it, 8 Byerly Hall wouldn’t be swamped by applications and students wouldn’t be lining up to matriculate here.

Harvard recently placed first in a “Revealed Preference Ranking of US Colleges and Universities” in a paper by Professor of Economics Caroline M. Hoxby and others. They found that students who were accepted to a number of schools choose to matriculate at Harvard most frequently—Yale and Stanford came in a close second and third. And they found that public schools with much lower tuition bills don’t have the same power to draw students. Berkeley, the highest public school on the revealed preference ranking, comes in 29th.

But when $150,000 is at stake, parents may not be convinced by the revealed preferences argument: that Harvard is “worth it” because other students—and their parents, presumably—think it’s worth it, too. It’s quite unlikely that students are learning significantly more at Harvard than they would have at Berkeley. So how do we know we’re not all lemmings, following one another into a ravine of debt blindly whistling “10,000 Men of Harvard?”

Economists have latched onto this question almost as strongly as parents have. Their analysis uses future earnings as a marker of success, and studies suggest that there is a correlation between going to very expensive schools and earning higher incomes later in life.

But if there is a benefit from paying more for college, where does it come from? The Economic theory of “signaling” proposes that potential employers, with incomplete information about job applicants, will assume graduates from a school as expensive as Harvard are particularly productive workers. But this explanation is still problematic. If employers were only looking for a pricey name, there would be no distinguishable difference between a student who attends the College and a crafty liar who buys a Harvard diploma on the Internet for $300. Don’t we gain any benefit from attending the school itself?

Yes. We get to go to interact with and befriend the “best and brightest” students in the country. The anecdotes that the “Things We Thought We’d Never Do” panelists shared with junior parents help explain why schools with high revealed preferences rankings—like Harvard, Yale and Princeton—are worth paying for. Parents were rightfully impressed by the panelists’ significant accomplishments, and as one panelist, Whitney E. Harrington ’04, explained, the Harvard junior class has more than 1600 stories of achievement. When so many great students choose to attend Harvard, the entire College community benefits.

In most cases, the success of Harvard’s students relies on their peers—present, past and future. We are challenged and helped by the students who attend Harvard while we do—in classes, study groups and extracurricular organizations. Graduates of Harvard are a built-in support network for post-graduate work in whatever careers students choose. And if the Harvard name has some “signaling” sway with non-alumnus employers, it’s only because the students who come out of Harvard consistently do great things—lead businesses, lead protests and lead countries.

Parents returned home this week, possibly in a less expensive car or to a slightly smaller house than they would have had their children gone to local state colleges. But they can take solace in knowing that their children’s friends are more than worth the interest payments.

Judd B. Kessler ’04 is an economics concentrator in Adams House. His column appears on alternate Tuesdays.