It does matter. The schools that are worth anything are too expensive (exceptions are there of course) while the cheap ones (read < 10K a year) are probably good for nothing. You are better off trying to get a job instead of attending those cheap schools.
You are saying this:
Ivy/Private School > No college > State School
If the value of college is dominated by its http://en.wikipedia.org/wiki/Signalling_(economics) effect, a degree from the "wrong" school could send such a negative signal (you weren't wise enough to skip the degree even though you couldn't get admitted to the "right" school) that the innate value of the education you received doesn't make up for it. I hope this doesn't hold broadly, because I went to a state university. But I would think less of someone proudly displaying, e.g., a degree from a known http://en.wikipedia.org/wiki/Diploma_mill, so it's at least possible for a degree to be worse than useless—the question is how mediocre a school would have to be.
I can't reply to prodigal_erik because the thread is too long, but the definition of diploma mill you provided is refering to non accredited universities.
I am talking about accredited universities, big state schools that are very affordable and provide fairly good educations.
I would rather attend one of those than no school at all.
You are saying this: Ivy/Private School > No college > State School
That statement is absolutely ridiculous.