institution is always worth the cost," he says. "I find her article splendidly analytical and very helpful, helpful in the sense that this is analysis and not anecdote."

By the numbers

Hoxby began her work by using the division of colleges into eight tiers done by the 1982 Barron's College Guide. This guide was chosen over other ranking systems, she said, because it uses a group-based ranking system which fluctuated little over the years.

The first tier includes the entire Ivy League as well as Stanford and top small schools including Williams and Amherst.

The second tier consisted of Northwestern, University of Chicago and Berkeley.

The third tier schools then included Georgetown, Duke and University of Virginia.

She then used data from the National Longitudinal Survey (NLS) showing what 1982 graduates from particular schools earned at age 32.

The NLS is an extensive survey which follows a small segment of the population through interviews over many years to provide a generational snapshot.

Hoxby used only data from male graduates--a decision she explained by saying that, since the 1960s, women's roles in the workforce and society have changed so much as to skew the data.

However, Hoxby wrote that women college students of today could still use her numbers as a reliable guide because the opportunities currently available to women are roughly equivalent to men, and thus their return on a top-tier degree the same.

For Hoxby, another struggle was to find the median where one could appropriately gauge the financial windfalls of a particular college degree. The mid-20s were too early, she says, because graduates have not become settled in their careers. While the earnings usually start to peak in the mid-40s, earnings potential can already be gauged by the early-30s.

She found that the fastest payoff came for students who chose top-tiered private schools with a financial aid offer over private schools two tiers below. These students, on average, made back the difference in tuition in less than six months.

For students choosing Harvard and financial aid over a third-tier public school like the University of Virginia, the difference in tuition was made back in a little over two years.

The longest a Harvard graduate could take to earn back the money they paid over a third-tier school's tuition--in situations where a lower, private school offered a full ride and Harvard gave no financial aid--was only 10 years.

"I'm trying to say to people that they'll collect on their dollar value," Hoxby says.

Of course, Hoxby's research depends on the assumption that a top-tiered private school will charge more than a lower-ranked school that is also private.