Is Private College Worth It? Or Is It Just Another Scam?

Erin Wallace is 25 years old and almost $200,000 in debt. And it’s not because she recently bought a house, or is carrying a huge credit card balance. Instead, it’s because she decided to become a teacher.

Wallace received both her undergraduate degree and her masters in education from Ithaca College, a private college with a tuition of almost $50,000 a year for undergrad, $20,000 a year for grad school. Now, three years after graduating, the monthly student loan payment on Wallace’s private loans is almost $800 dollars. She takes home $1,880 every other week as a teacher, and says she feels trapped — like she can barely afford her enormous loan payments and the cost of rent in New York City, where she works. But, “that’s the lowest I could get them after I refinanced them,” she tells Refinery29. And when the hold put on her federal loans as part of a COVID-19 emergency relief program ends next January, she’ll be paying even more. “It puts so many restraints on my life,” she says.

Wallace is from Ithaca, NY, which is part of the reason she wanted to attend Ithaca College; she wanted to stay close to home. She knew she’d have to take out loans wherever she attended, but says she didn't give enough weight to the dollar amount of the loans she’d have to take out when she was looking at schools. “I definitely wasn’t thinking about money, and I definitely wasn’t thinking about how much money I’d be making as a teacher,” she says. “I was just thinking about where I thought I would be happiest.” 

Wallace’s story is relatively common in her field. Nearly two in three educators under age 35 took out student loans, and one in seven owe more than $105,000, reports the National Education Association (NEA). The average educator took out $55,800 in loans, and they still owe, on average, $58,700, which reveals part of the issue: Student loans often have high interest rates, and educators’ salaries remain too low to keep up, leaving them with ever-increasing amounts of debt. The NEA notes that many teachers carry their debt into their retirement. What’s more, Black educators are often much more likely not only to take on debt, but also to take on higher amounts of it. 

This same situation is playing out across other industries. Students borrow money to pay for their education, expecting that their degree will help them secure a good-paying job, which in turn will let them pay back their student loans. Sometimes, that happens. But very often, a graduate soon realizes that their starting salary isn’t enough to cover the cost of living and the cost of paying back what they borrowed — and sometimes, their salary won’t ever be enough. Particularly when they've taken out loans to pay for the exorbitant costs of private colleges.

As Rep. Mondaire Jones (D-NY) said during a February 2021 press conference about federal student loan debt forgiveness, student debt burden is "due in part to the fact that wages have remained stagnant for decades, even as the cost of a college education has skyrocketed." Private college tuition in particular has soared. In the 1980/81 school year, the average student paid $2,737 for a year’s worth of classes, plus room and board, at public colleges, and $5,470 at private schools, reports the National Center for Education Statistics. Now, the average in-state tuition is $10,388 per year for public universities, $22,698 for out-of-state, and $38,185 per year for private universities. According to FinAid.org, tuition has risen at twice the rate of inflation while post-grad salaries have barely budged. As CNBC reported, college costs have increased by 169% since 1980 — but pay for young workers is up by just 19%.

This dichotomy between increasing education costs and stagnant salaries is leading many people to ask whether college is a scam, and whether or not private college, in particular, is ever worth it. For some time now, the consensus is that the more expensive — and thus more exclusive — an education is, the more it will be valued by prospective employers, and in turn lead to better job opportunities. But, a 2016 study from Columbia University found that while graduates of selective private colleges tended to earn higher salaries than graduates from public schools, people with public school degrees were more likely to have a full-time job four years after earning their bachelor degree. The researchers also pointed out that once the student debt-to-earnings ratio is factored in, the salary advantages of private institutions start to pale. “Unsurprisingly, taking loan debt into account makes public institutions look better,” the study authors wrote. 

The researchers noted that a student’s major made a difference: STEM and, to some degree, business majors tended to earn more across the board, which could make the name recognition and resulting high cost of a private institution worth it. But for people going into other fields, it’s becoming impossible to justify taking on high student loan debt, including in fields — like journalism — traditionally known for prioritizing degrees from top private universities. 

Amanda Mull, staff writer at The Atlantic, went to a public, in-state university — the University of Georgia — and graduated with zero debt, thanks to the HOPE Scholarship Program, a program in Georgia that assists students who meet certain GPA thresholds with tuition costs. “I didn't have to take out any student loans. I knew people at UGA who had student loans for living expenses and things like that, but I didn't know anybody who had this sort of high, five- to six-figure loans that are really common among people who went to private schools,” Mull tells Refinery29. “I went essentially for free.” Other states have similar scholarship programs, including California, Louisiana, Missouri, and South Carolina. Florida, Georgia, Kentucky, and New Mexico fund student scholarships through state lottery winnings.

Mull knew she wanted to study journalism, but she didn’t seriously consider paying more money to attend a top-tier program at big-name private schools like Medill at Northwestern University or the Newhouse School at Syracuse University. Mull explains that this is part due to the fact that she's from the South, where private colleges, in general, carry less clout. “There's a sense that college should be fun, you should go to a place that has a nice town and bars and restaurants and good weather and an opportunity for you to be at a sorority or fraternity if you want to, and sort of have the Animal House college experience,” she says. “I think that having that experience is, in some respects, considered a failure of ambition by some other people with different ideas of prestige.” For Mull, the decision to go to UGA came down to a couple of things: the price was right, and she knew she’d be getting a solid education at what seemed like a fun school. And, considering that journalism isn’t known for being a high-paying field, it seemed like a good fit. 

Mull has been happy with her decision. “Having no student debt and going to a public school on a scholarship absolutely created the foundation for the life I have right now,” she says. “My parents are middle-class; we're not rich. They could not have paid for me to go to a private school. I would have had to take a lot of loans to do anything like that, and if I had significant student loan debt I'm almost certain I wouldn't live in New York. I certainly would not have the job I have now.”

The pandemic has brought a new angle to the conversation around whether or not college is worth an enormous investment. Last year, many institutions only held virtual classes due to COVID-19 restrictions, and yet did not change their tuition costs at all. In fact, some schools — including Harvard and Yale — raised their tuition for the 2020/21 school year, citing, in part, increased costs associated with adapting to virtual learning, and the loss of revenue-earners like dorm fees. Students, however, argued that they were getting an inferior product: Virtual classes were less effective and engaging than in-person sessions, and some teachers struggled to adapt to the technology. Why should they be asked to pay more? In fact, virtual schooling was so unappealing that one in four high school graduates in 2020 delayed their college plans. 

Increasingly, there seems to be a fundamental misalignment between what students expect to receive in exchange for their tuition, and what institutions of higher education believe they’re being paid to deliver. As Scott Galloway, the co-host of New York Magazine’s Pivot podcast, said in an interview with Intelligencer, the “intransigent obsession with exclusivity and prestige” is the main culprit here. “Elite universities and their leaders have decided they want to be Birkin bags, not public servants,” Galloway says. “The universities have morphed from the greatest upward lubricant in history to the enforcer of an emerging caste system in America.” 

Private colleges appear to be stuck in some alternate reality where their brand name alone secures graduates access to a career with high earning potential — but that simply hasn’t been shown to be the case, especially if students must take on huge amounts of debt to attend. “Having the name of a particular college on your resume will not do anything for you all by itself,” says William Deresiewicz, PhD, former Yale professor and author of Excellent Sheep: The Miseducation of the American Elite and the Way to a Meaningful Life. “In fact, for any given student, according to a large-scale study, where you go to college has no impact, on average, on your future earnings. What matters is the student, in other words, not the school.” A few industries (like medicine) still give enough weight to brand-name schools to make the return on investment worthwhile, he acknowledges. But most of the time, there's no advantage to taking on large amounts of debt in order to attend a private institution.

“What we need — and this has nothing to do with college — is to recreate an economy where you don't have to go to college to have a decent life,” Dr. Deresiewicz says. He says we must prioritize providing every citizen with free or affordable child care and health care, and a live-able minimum wage — the sorts of resources that can improve overall quality of life and allow people to more easily gain the training they need to succeed in their field, whatever that looks like. “I don't think that everyone should go to college, but I certainly think everyone should have the chance. Money should not be an obstacle,” says Dr. Deresiewicz. “People who want to go [to college] and can't go should be helped to go — but you also shouldn't have to go in order to have a middle class life.”

In an ideal world, “the only thing people would have to consider is what their talents and interests are,” he says. “College would be a place of intellectual seriousness and rigor as well as free and fearless debate. The working world would offer lots of jobs that do not require a college degree but that pay middle-class incomes. Whether we are working towards that world, or whether it is a pipe dream, neither I nor anyone can say.”

As it is, experts are increasingly telling would-be college students to consider what they’re getting in exchange for what they’d be paying for their education. “You can't assume that private institutions are always automatically better just because they are private or expensive. It is important to ask questions about both graduation rates and post-college outcomes,” Judith Scott-Clayton, PhD, one of the authors of the Columbia University study, told Money about her research. It’s also essential to consider how much debt you’d have to take on, and weigh that against what you can expect to earn post-grad and the kind of lifestyle you’d like to live. Sometimes, borrowing money to pay for a private education makes sense — but not often.

Wallace doesn’t exactly regret going to Ithaca College, but does say that if she were to do it over, she would have chosen another college — and it wouldn't have been a private one. “What I got out of school was my masters and undergrad in five years,” Wallace says. “I wouldn’t be prepared for the job I have now if it weren’t for the courses that I took, but I could’ve probably taken the same courses at a SUNY school.” She doesn’t think having the Ithaca College name on her resume helped her get the job she has now. And she knows that if she went to public instead of private school, she’d be in a different financial situation. “My sisters both go to SUNY schools, so they’ll have around $30k loans,” she says. Wallace’s sisters will be able to pay off their debt in a much shorter time frame — meaning more financial freedom in the long run. Wallace, on the other hand, knows she’ll have to plan her life around her debt, including living with roommates or even moving back home to be able to begin to pay down her balance.

Now, not a day goes by where Wallace doesn’t think about the crushing weight of her loans. “It’s this big looming thing that’s always going to be there and it’s never going to go away,” she says. It’s hard to say anything would be worth that.