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Is BU worth it?

The median price of homes sold in December 2010 was $241,500, according to the U.S. Census. The price of four years at Boston University, assuming 52K in total yearly expenses? Just $33,500 short of that.

The high cost of attending a private college raises many questions, but perhaps the most essential is this – is it worth it?

The answer, many economists say – not always.

“The estimates of the value of a college degree are based on averages – not everyone’s college degree pays off,” said Peter Doeringer, a BU economics professor, in an email.

“We certainly don’t want everyone to have a college degree – that would make a college degree worthless and we need people to do the really important work that makes our society function – laying down the roads, building the buildings, serving people [and] changing the linen,” said Christine Rossell, a BU public policy professor, in an email.

Still, Rossell said, a degree from BU may be impressive enough to pay off.

“The reason that it is worth it is that you get a prestigious degree,” she said. “These days BU is only a cut below the Ivy League and you gain a polish and sophistication that you might not have had before you came.”

The total billed expenses for the 2010-11 academic year were $52,124, with tuition costing $39,314, according to the BU admissions website. This means that many students will be paying off student loans for years to come.

But Rossell said that BU students may have higher chances in post-graduate career fields.

“A BU degree signals to potential employers that you are smart and hard working,” she said.
Research has shown that even in more difficult economic times, those who go to college make more than those who don’t, Doeringer said.

Still, many college graduates may find themselves serving coffee, waiting tables or other jobs that require mostly unskilled labor, he added.

“It is not uncommon for some college grads to spend the early part of their work careers in jobs that do not require college degrees and both the percentage of college grads in that group and the length of time that they [spend] in non-college jobs tends to increase during recessions, as does post-college unemployment,” Doeringer said.

Even so, these college graduates may still find that their degree pays off in the end, he said.

“The net effect is lower earnings in the early post-college years and that means a longer time until college grads reach the breakeven point where their accumulated earnings are enough to pay off the costs of their investment in college,” he said, “but it would take a much longer recession that we are currently experiencing to undermine the long-term college advantage.”

The price of college isn’t just university bills, Doeringer said – it also includes an “opportunity cost,” which is the amount of money a student would make if they chose to work full time instead of attending school.

“Working during the school year and summers can reduce this cost,” he said.

The recession has also lowered the opportunity cost, he said, since Americans with no higher education were hit hardest during the economic crisis. The unemployment rate for high school graduates is 9.4 percent, compared with 4.2 percent for those with a college degree.

Other factors also play a role, Doeringer said, including the type of jobs students feel comfortable taking.

“Part of the calculation of the value of a college degree involves how long people work before they retire and the degree to which college grads value the non-pecuniary aspects of their jobs – workplace environment and safety, congeniality of co-workers, on-the-job training opportunities and job quality – relative to those of non-college jobs,” said Doeringer.

Though many students choose a major that promises high future earnings to buffer the cost of college, this strategy doesn’t always immediately pay off. Around 15 percent of School of Management students don’t find jobs within six months of graduation, said Justin McCummings, the associate director of SMG undergraduate career services.

Still, BU is an ideal school for students with future career goals, McCummings said.

“I’d say that the name recognition is there in terms of alumni and employers, which is what companies looks for when they are recruiting employees,” said McCummings.

BU students vary in their thoughts about the value of a degree.

“It’s very difficult to say whether it’s worth it or not, but it is very expensive,” said College of Arts and Sciences junior Howard Yan. “I’ve had roommates and friends leave because it’s not very affordable.”

Some students said they are unsure if BU in particular is worth the fiscal investment.

“I know that I’ll be graduating with a degree from BU, but a state school would have been less expensive and probably easier,” said CAS senior Ankita Patel. “After my first year, I contemplated transferring because of financial reasons. I wouldn’t say ‘don’t go to BU,’ but I would suggest first thinking about it as a long-term decision.”

Even students who say they love attending BU said that the administration could spend its money more wisely and consider the students who are paying thousands of dollars per year.

“I love this place, discounting the money issue,” CAS junior Bhaven Mehta said. “The school could do more, but I still love it. They need to put a little more effort into renovations.”

Some, however, still said they see the school as a bargain.

“Here you can get a good education in a city environment,” said CAS freshman Aneesa Thannickal. “You can’t put a price on that, but if you could, it would be well over $50,000 per year. If you get a good job, college will pay itself back.”

4 Comments

  1. I’m relatively shocked at the cost of an undergraduate education at private schools like BU.

    In terms of long-term job prospects a strong undergrad education may have been relevant twenty years ago, but the oversupply of college graduates has made undergraduate credentials far less meaningful.

    Four years at UMass Amherst comes at a price tag of $84,000 compared a $208,000 tab at BU. Perhaps some may be naive enough to believe the difference between the two schools is worth $120k and indeed some may have the financial resources to render the difference irrelevant (i.e. parents willing to bankroll four years of frat parties, skipped classes, and the occasional 5 page paper for Communications 201).

    However, I fail to see how objective consideration would produce that conclusion. With the exception of those at the top of their class in advanced and specialized majors (e.g. engineering, hard sciences), any perceived or actual bump in salary gained by going to a private, rather than public, university seems highly unlikely.

    That $120k difference in cost between BU and UMass? A 20 year repayment plan on a 6.8 percent means your actually paying $220k. Do you honestly envision a BU degree to result in anywhere near $220k more in earnings over the next 20 years? Perhaps Aneesa can, or maybe she just realizes how super cool it is to live in Allston for four years. Or maybe she has a scholarship.

    Im not singling out BU or UMass; any private school can be compared with the corresponding state school under a similar analysis. Eventually the divergence becomes relevant, however, I dont think it does for the average student at a large school like BU with a decent, but not distinctly remarkable, reputation.

  2. Whether they can afford it or have to go into debt, people will always choose the best product, whether it’s a car, house, or college degree. That is why people will always pay top dollar for BU. It’s prestigious and a great experience that definitely pays off. Having BU on your resume will immediately open doors and get you noticed.

    UMass Student – You’re obviously bitter that you’re stuck at UMass and can only experience the prestige and glamor of BU vicariously by reading the Daily Free Press. Your need to keep putting BU and UMass in the same sentence is amusing.

  3. our daughter got in and really wanted to go but since she is not a tier one student or a minority even though our financial situation warranted aid we did not get anything, therefore it is off to seattle university she goes, and we’ll keep our fingers crossed since her commitment and persistence as well as the “whole being” education should eventually override the prestige of a degree from bu. and she can always do her graduate work at bc since as a west coast family originally from the east coast it is in her blood to go there.

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