Another cautionary debt story

futurenyustudent
Fri, 24 Oct 2008 13:45:41 +0000

futurenystudent: You are changing the rules.



I haven’t changed the rules. Don’t pretend I did just because you conveniently forgot to read the “ceteris paribus” at the beginning of my very first post on the thread. You’re assuming that a BA from U.Va. (or insert top university here) and a BA from Alabama State (or insert fourth tier noname school here) are “perfect substitutes” in econ-speak: however, anyone with a pulse will tell you that they’re not. On the macro level, you’re much more likely to land those “plum” jobs of which you speak at a more “connected” school than at a less “connected” one. On the micro level, someone who graduated from the bottom of his class at Harvard won’t be as successful as someone who graduated at the top of his class at Alabama State for example. Assuming that your kid will be at the top of his/her class for all 4 years is statistically a bad bet, given that the statistical chance of someone graduating at the top of a 5,000 person class is 1/5,000. Plus I doubt the culture at Alabama State U is conducive to studying. On the micro level, if you take an average student from both universities (Harvard and Alabama State), you’ll find that the Harvard grad has both an easier time getting a job and will end up making more money.

Another example: I know several people at NYU Law School that aren’t particularly brilliant per se who are juggling 6-7 different biglaw offers. I also know that people at fourth tier law schools have a hard time even getting past the resume review stage, even if they’re at the top of their classes.