Does It Matter Where You Go To College?

American families spend billions of dollars each year buying college admissions guides, making college visits, and applying to their top choices. This doesn’t even count the time or emotional investment they put into the search, nor does it count the cost of paying admissions officers to read through thousands of applications each spring. In the realm of highly competitive college admissions, we clearly think it matters which college a student attends. Yet, if you ask Americans who is responsible for low college graduation rates, the college or the student, they blame the student.

Why do we think institutions are so important on one hand and completely disregard them on the other? Beyond pure hypocrisy, what’s distressing is that we tend to think of this exactly backwards. There’s not much evidence that one elite university is distinguishable from the next, but research shows that institutions actually do matter on the low end of the scale. Collectively, Americans seem to think the exact opposite.

Let’s start with elite colleges and universities. We know competition is intense for scarce seats and that more students are applying to more colleges than ever before, causing admission rates to plummet. In a great NPR story this morning, we learn how this plays out at Amherst:

Mr. PARKER: There is going to come a point where it’s going to be very close to, you know, closing your eyes and doing that, because we’re exhausting the meaningful criteria to separate John from Mary. For that group, it’s effectively a lottery. It really is.

SMITH: Parker concedes it’s a disturbing notion to many high achievers, but in an odd way he hopes it may also be a kind of relief to kids to know that the decision is a little random and not a referendum on their worth.

High school students keep subjecting themselves to the college admissions lottery each year, but it turns out it really doesn’t matter. Economists Stacy Dale and Alan Krueger followed the earnings patterns of students who entered college as freshmen in 1976 and 1989. After controlling for a student’s academic ability, defined by SAT scores and high school GPA, and the colleges the students applied to (a measure of motivation), there were zero economic benefits to attending more prestigious institutions. As David Leonhardt summarized, “a student with a 1,400 SAT score who went to Penn State but applied to Penn earned as much, on average, as a student with a 1,400 who went to Penn.” In other words, this study directly refutes our obsession with selective college admissions.

Importantly, this study can not be extended beyond the comparison of good versus very good institutions. The “worst” institutions included in the sample were places like Miami University of Ohio, Penn State, and Xavier. On the other end of the spectrum, though, institutions seem to matter a great deal. It turns out that some universities are much better than others at helping students, particularly low-income and minority students, graduate from college. And there are college dropout factories that take in similarly challenging students but do a remarkably poor job of helping them earn a credential. Research has also found that many students “undermatch,” meaning they choose to attend a less selective institution than they could qualify for, and that academically identical students who attend a school of lesser quality are less likely to graduate.

Misunderstanding the importance of institutions has had real consequences. It’s led to an admissions system that increasingly favors well-informed, wealthy children who can afford private SAT tutoring, college counseling, and the applications to numerous colleges. And, at the same time, because we subliminally think institutions don’t matter, we allow persistently low-performing college dropout factories to blame their students and deny responsibility. Getting this balance right would go a long way towards improving higher education outcomes for all students.