Does a 2nd Choice School mean 2nd Rate Pay?

May 5, 2010

As high school seniors spent April sorting through their college acceptance letters and deciding where to attend school, they may now be lamenting the fact they were rejected by their top choice college or university. However, a recent article in The Daily Beast finds people who don't attend their top choice school are regularly happier than those who do.

Top choice schools are often schools with name recognition and severe admission standards (e.g. Harvard or Berkeley), not necessarily schools that are a good fit for the applicant. The Daily Beast article finds students typically rank prestigious schools as top choice schools, even if the student knows very little about the school. This blogger is guilty of this: my top choice school was Princeton University for no real reason other than the fact it was Princeton.

Upon closer inspection, 2^nd choice schools may offer a better fit in terms of the academic rigor, social life, campus setting and location. Therefore, students who attend their 2^nd choice school are often happier with this choice.

However, what does attending a 2^nd choice school mean for your pay down the road? In other words, is there a trade-off between happiness and future salaries when attending a lower choice school?

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How Does Pay Compare Between Top Choice and 2^nd Choice Schools?

As seen in the PayScale College Salary Report, Top Choice Schools often bring with them Top Mid-Career Median Pay (50^th Percentile pay for bachelor graduates with at least 10 years of experience). Does this mean not attending a Top Choice school will lead to salary losses in the future?

As an example, let us compare the school choices of a girl profiled in The Daily Beast article: Lauren Schug. Ms. Schug was rejected by her top three choices: Brown, Columbia and Duke and instead opted to attend Tulane. In retrospect, she believes this was "the best thing that could have happened to her," but what did it do to her salary potential? When comparing Mid-Career Median Pay, Duke University is the clear winner and Tulane University is the clear loser:

Duke University: $116,000
Brown University: $107,000
Columbia University: $100,000
Tulane University: $98,800

The above pay figures show the typical Mid-Career Tulane bachelor graduate earns less than the typical mid-career graduates from Ms. Schug's top choice schools, though not by much vs. Columbia. Although she is happier with Tulane, she may be losing out in terms of salary potential relative to going to Duke.

However, we are comparing median pay – pay received by the typical graduate of these schools. Given the fact that Ms. Schug was rejected from her top schools, it is reasonable to assume she may not match the characteristics of the typical graduate from these schools, but instead match the characteristics of the less-than-average graduate. In other words, we assume that Ms. Schug would perform below average if she in fact attended one of her top choice schools.

Therefore, let us compare the Mid-Career Median Pay for Tulane Graduates to the Mid Career 25^th Percentile Pay for graduates from her Top Choice schools. The latter represents pay where 75% of the graduates will earn higher pay, while 25% of the graduates will earn lower pay:

Duke University: $79,600
Brown University: $76,800
Columbia University: $67,100
Tulane University: $98,800

In this case, Tulane is a clear win. By attending a school that is a better academic fit, Ms. Schug is destined to perform better and thus potentially procure a higher future salary. If we assume that a student typically performs better in their 2^nd choice school, then these results are not uncommon – a 2^nd choice school may lead to higher salary potential.

What type of pay can you expect with your education? For powerful salary data and comparisons customized for your exact position or job offer, be sure to build a complete profile by taking PayScale's Full Salary Survey.

Regards,

Katie Bardaro
Research Analyst, PayScale, Inc.