Since the market crash in 2008, middle and lower income kids have become discouraged about applying to college because of the rising costs. The higher education community is responding in various ways, especially private colleges with generous endowments. They are offering need based scholarships (not loans) at a rapid pace. So much so, we need to ask, “is private college cheaper than public college?”
The cost of a college education has increased far more than the amount of inflation, making it harder to afford than ever. According to the US Department of Labor Statistics, inflation rose approximately 150% between 1995 – 2015. And, according to US News & World Reports, college tuition prices rose far above inflation during the same time period:
- The average tuition and fees at private National Universities jumped 179 %
- Out-of-state tuition and fees at public universities rose 226%
- In-state tuition and fees at public National Universities grew the most, increasing a staggering 296%
No wonder private schools have been experiencing a drop in the number of freshman applications. Consequently, to become more competitive, they offer hefty scholarships to make the price more affordable. In fact, some of the private schools are becoming incredibly affordable.
Basically, students can apply to 3 types of institutions– in state, state schools, out-of-state, state schools and private schools
Let’s take Rutgers University as an example:
- The tuition (excluding room and board) for a semester at Rutgers University in New Brunswick, NJ for in-state students is $11,408.
- The cost for an out-of-state student to attend Rutgers it is $27,059 (without room and board). It’s the same education for 2.37 times the price.
- A whopping 17% of the 68,942 under-graduate students come from outside the state. These students are contributing an extra $183,429,720 more than in-state students.
But what about the quality of education? Is a semester at Rutgers worth $11,408 or $27,059? Same professors and resource, but 2.37 times the price.
Finally, there’s a new way to know before applying –its called the Quick College Cost Estimator and is available on a site called MyIntuition. The application was invented by a consortium of colleges and universities and it is extremely user friendly. Answer 5-6 financial related questions and you get the cost (and scholarships) based on the student’s family’s resources.
- An annual household income of $150,000
- Said I owned a home worth $845,000 with a $700,000 mortgage
- Have $200,000 in retirement funds
- No other kids in college.
Here is what scholarship money I could expect to receive if I were admitted ( all prices include room and board) and how much it would cost the student:
So, while the sticker price looks like there is a $46,000 per year difference attending an Ivy League University versus staying in state, in all likelihood, it might cost only $10,000 more per year more. And, attending one of the Big 10 schools outside of NJ – like University Michigan – costs approximately$19,000 more per year than to attend Columbia University and $28,000 more per year than to attend Rutgers.
So the answer to the question “is private college less expensive than public college?” is a resounding yes. My hope is that by spreading the word about this invaluable tool, more and more schools will participate in the program so that graduating high schoolers will have a better way to compare the real cost of college in real time.
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