By Cyrus Pinto and Ishan Puri
College acceptances have plummeted in the last 15 years. The explosion of online applications and the Common App, have been a boon to access, reducing the barriers to applying. However, the increase in applications has resulted in eye popping acceptance numbers. Stanford's 5.05% acceptance rate for the Class of 2019 leads the pack.
Many parents encourage (or force) their children to apply to colleges where they deem the most prestigious. The goal of this exercise? To secure a financially sound future. The supposed correlation between prestige of the university and financial return of it's graduates is fallacious. And it's hurting us. Instead, this has driven a hysterical mania to apply to many of the top schools, causing undue stress and carnage on a generation of student's psych, driving some to suicide.
Our goal at Synocate is to build a culture and framework for a student to find themselves before the college admissions process. In conjunction, we use data such as ROI to determine schools that fit the needs of parents and students, together. Here was a fascinating trend we noticed.
According to PayScale's ROI calculator, the top 5 schools with "20 Year Net ROI" (defined as "The difference between 20 Year Median Pay for a bachelor's grad and 24 Year Median Pay for a high school grad minus Total 4 Year Cost") are the following:
1.) Harvey Mudd College $985,300
2.) California Institute of Technology $901,400
3.) Stevens Institute of Technology $841,000
4.) Colorado School of Mines $831,000
5.) Babson College $812,800
With such high ROI, one would expect rock bottom acceptance rates. However, nearly the opposite is true:
Acceptance Rates for top 5 ROI schools:
1.) Harvey Mudd College (19.1% in 2015)
2.) California Institute of Technology (9% in 2014)
3.) Stevens Institute of Technology (44% in 2014)
4.) Colorado School of Mines (36.4% in 2015)
5.) Babson College (28.2% in 2015)
Why is this the case? One explanation is that engineering focused institutions have a higher ROI. If parents are concerned about their students financial future, the focus should be placed on the course of study, not the school itself. President Obama has been a major proponent of increasing the number of STEM (Science, Technology, Engineering, and Math) majors, and parents should follow suit.
Although putting pressure on a student is never encouraged, emphasis on STEM is the lesser of two evils. The current scenario of brand name obsession creates a situation where the outcome is mostly out of the students individual control. Debunking the application process is almost impossible given today's fog of war created by most application committees of top schools. The pressure of brand name obsession also begins when the student is very young, at the age of 16 or 17 when they begin the application process.
STEM pressure would be different in both the control of the outcome and age of the student. Picking a major and performance in a class is within the students realm, not a committees. The decisions during college are made when the student is a legal adult over the age of 18, unlike the college brand name obsession which begins when the student has barely entered high school.
However, there is an exception to the rule. Brand name technical schools, like Caltech, have both an elite acceptance rate and strong ROI. Stanford and Princeton trail close behind, both with a healthy ROI as well as competitive acceptance rates.
Here are the top 5 2015 Acceptance Rates, mapped with their respective ROI:
1.) Stanford (5.05%) $809,700
2.) Harvard (5.3%) $646,100
3.) Columbia (6.1%) $591,400
4.) Yale (6.49%) $578,500
5.) Princeton (6.99%) $795,700
This analysis leaves us with the conclusion that brand names do not necessarily maximize student's financial success. If financial success is not driving the mania behind college admissions competitiveness, then what is?
Maybe it's the celebrity alumni. The number of self made millionaires and billionaires alumni of brand name schools has distorted reality. A bevy of successful technology company CEOs from Stanford and the traditional cadre of investment managers and politicians from Ivy Leagues create a perception of guaranteed success. Fueled by media hysteria and the reduction of application barriers via technology, the worldwide public will continue to voraciously claw at the pearly admissions gates of brand name schools. And there is no end in sight.