Generally speaking, college acceptance rates aren’t a great predictor of a university’s economic value.
However, the country’s most selective colleges are a very good investment.
Open admissions colleges tend to be a bad deal economically, despite other advantages they may offer.
Then, we looked at several factors – like net cost, future earnings, and payback time – to assign each school an “economic score” that reflects how good a deal it is. We found that students who attend open admissions colleges are not getting good value for the money they spend on their degrees. Conversely, attending an extremely selective or very selective school leads to impressive economic outcomes.
But exclusive schools aren’t always an excellent deal. For the vast majority of colleges, there isn’t a strong correlation between acceptance rates and educational return on investment (ROI).
So don’t sweat your school’s acceptance rate too much – other factors should play a bigger role in your choice of college.
So what are the takeaways if you’re a high school senior trying to decide where to go to college? If, like most students, your target schools admit more than 25% of their applicants, you shouldn’t be basing your college decision merely on a school’s selectivity.
For example, if you’ve been accepted to a college with a 30% acceptance rate and another one with 60%, the more “exclusive” school isn’t necessarily the better fit for you.
Instead, consider individual schools’ economic score, as well as the quality of their programs and the financial aid package you are offered.
Despite their relatively poor economic value, open admissions colleges do have specific advantages, like their flexibility and simplified application procedure. These make them especially suitable for non-traditional students. If you graduated high school decades ago and don’t want to bother digging up your high school transcript or asking for recommendations, open admissions colleges may be a good option for you.
So how much does school selectivity affect economic outcomes?
The most selective schools often attract the most motivated and privileged students: these individuals have already proven in high school that they have the drive and resources needed to succeed after graduation.
In other words, colleges are only doing part of the work to prepare grads for financial stability; a lot depends on the students themselves: their preparation pre-college, their personal motivations, and their family circ*mstances.
Socioeconomic factors also play an undeniable role: the more selective the school, the lower the proportion of low-income students. Only 16% of students at extremely selective schools are from low-income families that qualify for Pell grants, compared to 48% at open admissions colleges. This underscores the fact that students at the most competitive colleges already have economic advantages at the outset that will continue to benefit them as they build a career.
Selective schools have better graduation rates.
There is a strong correlation between selectivity and college graduation rates: the more selective a school is, the more likely its students are to graduate. Students at extremely and very selective schools have a grad rate of 95% and 89%, respectively. This figure drops to 69% for moderately selective colleges and 60% for inclusive universities. Students who attend universities with open admissions policies only have a 43% grad rate.
Final thoughts
While highly selective colleges often pave the way to high-paying careers, you shouldn’t pick a college just based on its acceptance rate. Remember that exclusive doesn’t always mean better. Instead, consider factors like educational ROI (as captured by our economic score), financial aid, location, and the degree programs offered. Check out our rankings of the universities that provide the best value for money to help you make your decision. College is a big investment, but a university education pays off – even if you don’t get into a super-competitive school.
