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November 30, 2021

Does where you graduate university/college really matter?

The next few months, for the bulk of grade 12 Canadian high schoolers, are prime time for anxiety.

As university/college applications turn into university/college acceptances and rejections, every student feels the need to measure themselves against their peers. Where is he going? Where did she get into? What kind of post-grad salary are they looking at?

Yet for all the hair-pulling and teeth-grinding, is it really worth it? In the end of it all, does where you went to university or college really matter?

We’ve all heard the notion “It’s not where you go, it’s what you do there,” though if anyone really bought into that, the Harvards and Yales of the world wouldn’t consistently charge tens of thousands per year in tuition, and wouldn’t have to routinely turn down a huge bulk of their applicants.

Why, though, all the continued fuss?

The lore of a premier post-secondary institution is undeniable, but maybe the subsequent economic payoff isn’t. By a new study from the National Bureau of Economic Research (NBER), you likely need a university/college degree or diploma for your future salary’s sake, yet where it comes from probably doesn’t matter.

The NBER surveyed 6,335 post-secondary grads from 1976, then cross-referenced what school they went to with their salaries decades later. The results?

“The internal real rate of return on college tuition for students who went to college in the late 1970s was a startlingly high 16 to 18 percent,” the report notes. “But with college costs up sharply since then, returns have probably come down to a more normal range.”

The NBER calls this the “Spielberg model,” in reference to Steven, the famous movie director. Spielberg, who was notably rejected from USC and UCLA’s film schools, settled for Cal State Long Beach, where he went on to … well, you know.

These examples are U.S.-based, sure, yet while no such data exists for Canadian universities and college grads, just take a look at the educations of several prominent Canucks. Dragon’s Den  panel members Arlene Dickinson, Robert Herjavec and Jim Treliving, for example, all have modest educations relative to their success.

Do you think that’s fluke or reality, then? Do you think, as long as you have a degree or diploma, it necessarily matters where it comes from anymore?

By Jason Buckland, MSN Money



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Gordon PowersGordon Powers

A long-time fund company executive, Gordon Powers now heads up the Affinity Group, a financial services consulting firm. Gordon was a personal finance columnist for the Globe & Mail for many years, has taught retirement planning...

Jason BucklandJason Buckland

The modern-day MC Hammer of money, Jason can often be seen spending cash that isn’t his with the efficiency of a Wilt Chamberlain first date. After cutting his teeth as a reporter for the Toronto Sun, he joined the MSN Money team with...