Clear and spectacular answers to questions about which university to attend are hard to find. However, a recent study published in Contemporary Economic Policy by academics Eric R. Eide, Michael J. Hilmer, and Mark H. Showalter has done just that when speaking about financial returns on STEM degrees. In an article in The Wall Street Journal they state,

What we found startled us. For STEM-related majors, average earnings don’t vary much among the college categories. For example, we find no statistically significant differences in average earnings for science majors between selective schools and either midtier or less-selective schools. Likewise, there’s no significant earnings difference between engineering graduates from selective and less-selective colleges, and only a marginally significant difference between selective and midtier colleges.

This is huge for two reasons:

  1. If a person is going to major in a STEM discipline, his local state school may be just as good as Stanford or Harvard, if financial return is the most important issue to them. So, unless the person is killing it in school, has a perfect SAT, and/or is a recognized genius (and in that case, they are probably going heavily subsidized anyway), why should they spend the price differential between Vanderbilt and the University of Tennessee?
  2. It is a great way to get a kid to wake up if they are looking to do a humanities or business degree at a less than stellar institution. If they are not doing very well in those disciplines and cannot get into and elite school, then the financial math is hard to justify.

This is really good information for those about to spend or borrow an enormous amount of money to go to an elite school to study a STEM discipline. Expect the push-back from the elite universities to be fierce and quick.