The Opportunity Cost of College

Take any introductory course in economics, and there’s a fair to decent chance that your professor or textbook will cite the “real” cost of a college education. The sticker price, high as it may be, is only half the story. In choosing to attend school instead of entering the labor market, you forego whatever you might have earned on the job. Economists call such foregone earnings an opportunity cost, equal in value to the best opportunity foreclosed by your decision to enroll. Anyone deciding whether to go to college should take these lost earnings into account.

But college has another cost. Admission to most universities is capped well below the level of demand. Applicants willing to pay tuition are turned away at the gates. Like its elite brethren, Columbia finds itself in the more rare position of being able to turn away qualified applicants—that is, Columbia could admit more students without greatly reducing its academic standards for admission. That means, in effect, that if I weren’t enrolled here, another qualified student would be enrolled in my stead. A full reckoning of the cost of my education would therefore include the absence on campus of one rejected applicant.

This is true, at least, on average. By accepting Columbia’s offer of admission once it was made, I may have directly displaced another applicant to the class of 2009 (depending on whether students were admitted from the waiting list in 2005). Failing that, I contributed to Columbia’s yield rate and thereby signaled the administration to accept fewer students in subsequent years. On net, then, I caused one applicant to be denied admission to Columbia. I am responsible, albeit indirectly, for preventing him from taking the classes I take, joining the clubs I join, and knowing the people I know.
This hypothetical person’s identity is unknowable, but I might expect his credentials to resemble those of the “last” student to be admitted—whichever student would have been rejected if Columbia had accepted one fewer student. Since he was on the margin of admission, I will call the applicant I displaced the marginal applicant.

When I kept the marginal applicant out of Columbia, I caused two kinds of harm. The first was the direct harm to the applicant in emotional pain and tangible loss. The second was more diffuse. The marginal applicant rejected in an average year would have done something worthwhile if he had instead been admitted. Perhaps he would have volunteered, or thrown good parties, or written op-eds for the newspaper. Columbia, in all probability, has suffered somewhat from his absence.

From an institutional perspective, this is an opportunity cost—a major cost of allowing me to enroll is that someone else is prevented from attending. Consider a thought experiment. If Columbia looks back someday and assesses whether admitting me was a good idea—in a broad respect, whether I was a good investment—it should not look at my contributions in isolation. What matters is not whether Columbia will have made a net return on the resources it invested in my education, but whether those resources would have been better invested in educating someone else. The standard for comparison is, again, the marginal applicant. If I make poorer use of my time here than he would have, I’m taking up space. To waste my potential is not only to harm myself.
What obligation arises from that fact? I claim that it is incumbent on me to do more with my Columbia education than the marginal applicant would have done. Were I to go through the motions, do the bare minimum to get by in class, and contribute little to the campus community, I would be remiss. I owe it to my classmates, to my teachers, to the student I displaced, and to society at large to earn my place here day in and day out. How I do so is up to me. Columbia needs its athletes, its social butterflies, and its academic grinds. I can contribute in any number of ways, so long as I pull my weight.

The same obligation applies wherever space is in short supply. Society has a limited number of important perches at its disposal—governorships, editorships, and academic chairs. Anyone fortunate enough to occupy one should aim not only to do well in an absolute sense, but also to do relatively better than the alternative would have done. Whenever I apply for anything—be it a scholarship or a leadership role—I ask myself, will I do a better job than the competition? If and when I am accepted, I do my best to prove that the trust placed in me has been well-placed.

I’m not suggesting that, in deciding whether to apply to any given college, high school students should weigh the possibility that they might crowd out other deserving applicants. That’s for admissions officers to sort out. But I do believe that students who squander their cherished spots in selective universities are doing a disservice both to those around them and to those who didn’t get in. When we possess coveted positions in society, we should continually ask ourselves if those denied the opportunity are more deserving than we are.

The author is a Columbia College senior majoring in economics. He served as the deputy editorial page editor in the spring of 2008.