Yes, You Really Should Go Into Debt for Yale

There's been a rising consensus in the past year: going into massive debt for an Ivy league education is a bad idea. The degree just isn't worth the loans. In fact, though the College Board regularly puts out a graph showing how college grads earn more than those who stop at high school, former political science professor Laura McKenna recently expressed a desire to see the breakdown for private versus public colleges: "Does a $50,000 tuition education at Sarah Lawrence give you a better return than a state college?"

Thorfinn, a writer on the popular Gene Expression blog, suggests that it does. He examines some studies on the value of school degrees, arguing that even with the large expense and debt, going to a more expensive, higher-ranked college pays off. Thorfinn tracks down a slide in which a research team from Harvard-Berkeley-Northwestern team graphs US News & World Report college rankings against a person's "mean earnings at age 28":

This graph, Thorfinn explains, shows not only that your college has a big effect on your income at 28. It also shows that the relationship isn't linear: going to a top-ranked school gives someone nearly a $30,000/year advantage over a person who went to a school ranked 50th, but going to the 75th-ranked school yields little more money than going to the one ranked 125th. Over time, the advantage at the top adds up.

You might think this dramatic advantage in earings might come from correlation, not causation. (That people who are motivated and talented enough to be high-earners go to top schools, but it's not the school that makes the high salary.) Yet Thorfinn points to a 1998 study showing that's not true: "even after adjusting for selection, however," concluded the authors, "we do find that the school a student attends matters for his or her subsequent income." In other words, as Thorfinn puts it:

A very rough calculation suggests that everyone who turns down a top-ranked school for a safety to avoid student loans is making a big mistake. ... Just being the type of person who can get to Harvard isn't enough; you need to actually go to Harvard to get the bonus.