I think that there are three main things that impact the average earnings for graduates from any particular university.
A very big one is the mix of majors that the university offers, and the number of students who graduate with each major. As an obvious example, a university that graduates a large number of people with engineering and computer science degrees will tend to have high average earnings just because these are majors that tend to have high salaries. While it might be less obvious, math majors also tend to do relatively well, and for starting salaries straight out of university with just a bachelor’s degree nursing is also a relatively good major.
Another issue is where the university is located. A lot of graduates will stay relatively close to the university for their first job. Not all will, but quite a few will. Jobs in expensive areas (San Francisco Bay Area, New York, …) tend to pay a bit better compared to jobs in less expensive areas. They might not pay enough better to make up for the higher living costs, but will pay somewhat better. This implies that universities in expensive areas might tend to have more graduates with slightly higher salaries compared to universities in areas that are less expensive to live.
Finally, the personality and drive on average of the students will matter some. Famous and highly ranked schools will tend to have a higher percentage of students who are likely to succeed. Any one highly driven student might be likely to do well wherever they attend university, and there will be some of these at any university, but there might be a higher percentage of them at a highly ranked university.
I have said this before in other threads but it might be worth repeating: The smartest and most highly driven graduates who I have met coming from U. Mass are just as strong and just as driven and just as successful as the smartest and most highly driven graduates who I have met coming from Harvard and MIT. The latter two schools just have a higher percentage of such graduates which impacts the average salary across all graduates from each school.
This is of course a major that tends to lead to a good job. I was a math major in university, and my understanding is that some math majors end up in accounting (I went into something else, which was in high tech – a lot of careers can make use of math skills).
There are a very small number of careers where the “prestige” of the undergraduate school matters. Investment banking and management consulting come to mind. For most careers this really does not matter much. Certainly in high tech (where I spent my career) graduates from MIT and Stanford and U.Mass and Rutgers and San Jose State and a very, very long list of other schools work alongside each other and no one cares where anyone got their degrees. In most cases we do not even know where anyone got their degrees. We do care about whether someone is reasonable to work with and whether whatever they produce actually works.
All of which might lead to the question of whether investment banking or management consulting is a career which your child might want to pursue. Personally I would consider these to be areas which pay well, but which are not work environments where I would be comfortable. When I see high school students considering these areas I think about a friend who got a degree in math from MIT, then a law degree from Harvard, passed the bar, went to work for a prestigious high end law firm in New York City, and lasted one week. He could do it. He did not want to do it. He hated the environment and instead went back to university to get a master’s degree in a different field. Fortunately his parents could afford all those degrees with no debt and no hardship.
Which to me implies that in most cases IMHO the very expensive private universities are not likely to be worth it if you are full pay. There are however exceptions, some of which involve parents who can afford to pay something over $300,000 per child for university with no hardship. Somewhat oddly enough the one family I know who would find this cost the easiest to handle instead had their one child attend an in-state public university (which was an excellent school in their case).
And I do know multiple people (including both daughters and my wife) who got their bachelor’s degree at an affordable public university, and who then got (or are currently getting) some form of graduate degree at a more famous and highly ranked university. This is common. Also as a graduate student at a highly ranked university (Stanford in my case for a master’s), I knew a large number of the other students in the same program who had gotten their bachelor’s degrees at an affordable public university. Many then got some work experience. They they paid the big bucks but just for a one year master’s degree. Thus if a graduate degree is a possibility (a big if) you do not necessarily need to spend the big bucks for a bachelor’s degree in order to at least have a chance of attending the well known famous graduate program.
And I agree that if you have this choice available, it can be tough to decide what is worth it and what choice makes more sense for any particular family.