However, one of the reasons that it takes so little time to make back the difference between tuition at a top-tier school and a tier-three school is the difference in tuition between private schools in tiers one to four is small.

There is, however, a large increase in private school tuition from tier eight to tier five, Hoxby writes.

In all, she estimated that a typical man who graduated from a top-tiered college in 1982 can expect to earn a total of $2.9 million in real 1997 dollars over his career. A man who graduated from a college from the lowest tier could expect to make a total of $1.75 million before retirement. The study bases estimates on a working life of 34 years.

The career earnings numbers for top-tier graduates could even be higher because inflation is factored in and "topcoding" is used as well. By "topcoding," the study does not accommodate for the William H. Gates' III, Class of 1977, of the world. Top incomes are not factored in once they exceed $250,000.

She says the study is aimed at parents trying to decide between a more generous public school--whose offers motivated Princeton to raise its aid--and a less generous Ivy.

In recent years, inexpensive public schools like the University of Texas, the University of North Carolina and the University of California at Berkeley have gained reputations for academic excellence and have offered large merit-based scholarships to groups like National Merit Scholars.

In addition, other state schools can use the lever of a full scholarship or low tuition to attract students from their home state. Still, Hoxby says, graduates from these schools would see their education as no bargain--over their careers, tier-three graduates will make a total of about $400,000 less than tier one graduates.

"In many cases, even students who are offered a 'free ride' by a lower-ranked college would maximize their monetary worth by refusing the aid and attending the higher-ranked college," she writes in the study.

Hoxby tried to correct for the fact that very smart students could come out of lower-tiered schools and go on to great success--and for "late bloomers" who could become more motivated after college. By taking an "average" student, she found that going to top-level schools like Harvard will only continue to pay off--at least financially.

"For students with the aptitude to attend a rank 1 or rank 2 college, the returns to attending a more selective college has risen over the entire period since 1960," she writes in the final sentence of her study.

I-Banking=Happiness?

Office of Career Services Director Bill Wright-Swadel says he has seen Hoxby's conclusions borne out by his interactions with Harvard graduates.

But Wright-Swadel warns Hoxby's research only looks at one yardstick of success--money. He says many graduates look for more intangible rewards.

"For every person who does it and who succeeds at that visible level there are other people who are getting great joy from being in community theater...or a ranch in Wyoming," he says.

But even if a student does head back to the ranch, Wright-Swadel said, a student's intellectual experience while at Harvard may be enough of a reward for the large cost.

"And if you said to them, did Harvard make a difference in your life, they would say, 'Absolutely, without a doubt, I am much happier on my family ranch than I would have been,'" Wright-Swadel says.