Personal Finance

Attend a Great Private College for Less Money Than a Public College

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Last updated on July 25, 2019 Comments: 10

I’m a big fan of a continuous education that lasts a lifetime, whether earning degrees or just gaining knowledge in topics you’re not normally exposed to. But when you start focusing on money, it’s easy to raise questions about how much education is worthwhile. There is a war over the value of higher education.

College graduates on average earn significantly more than individuals without a degree. According to the Bureau of Labor Statistics, income increases with successive degrees. The median weekly earnings, including wages and salary, jumps 64% between those with high school diploma and those with a Bachelor’s degree. If you hang your Master’s degree on your wall, you’ll earn a 100% premium, doubling your income. This income advantage snowballs by millions of dollars over time.

While the averages tell one story, practicality tells another. If you earn an expensive degree or two then work in the arts, non-profit, or the public sector, it will be more difficult to recoup the costs of that education. A lot of generic financial advice, particularly the advice that can be found online for a mass audience, suggests earning a degree without going into debt, finding the cheapest college education you can, and even forgoing higher education completely and entering the “real world” as soon as possible to begin earning income.

You could look at the cost of education from a pure return-on-investment perspective and get discouraged about the value of an education. These calculations consider college expenses like tuition, boarding, and course materials. They usually conclude that it makes more financial sense to acquire the least expensive four-year degree based on tuition rates.

What these calculations don’t often take into account is that you can attend Ivy League and other private colleges for less money than many public colleges. Many private colleges offer financial aid packages that bring the costs of an education further towards affordability than public colleges. At least fifty colleges include no or only small loads with their financial aid, in order to save their graduates from the burden of student loan debt.

For example, Harvard’s tuition is $52,000. Racking up over $200,000 in college costs for a four-year degree does not sound like a good use of a family income — and you can practically forget about having your child “work his way through college.” But families earning $80,000 a year can send a child to Harvard for $6,567 a year, a contribution of less than 10%. With an income of $120,000, tuition at this Ivy League school is reduced to $16,000. See more about private colleges offering loan-free financial aid at CNN Money.

College isn’t for everyone, but for those who choose this path, I would encourage attending the best institution possible. There are a lot of different variables that go into determining what the “best institution” is, and that’s going to be difficult to quantify. I was surprised to see how inexpensive an Ivy League education could be, and my experience tells me that if you can attend an Ivy League school, you should.

Article comments

Anonymous says:

I went to a great private university that, fortunately, subsidized my education expenses nearly completely. If I could do it over again I would attend the same school, but would live more frugal (I took out loans to “live” off of) and work more to help pay for living expenses so I wouldn’t have as much school debt.

Anonymous says:

I totally agree with the author. I went the Ivy route (Cornell) because my overall tuition was lower than that of my state’s best public college (Penn State), which honestly isn’t even close to being academic equals. For those that think a huge lecture hall run by TAs sucks – it does – but then again I had office hours with nobel laureate professors. And after graduation, I beat out a ton of my state school peers with employers because of my school’s reputation. My current cmployer lets me take fun classes at the local public college here and I’ve earned straight A’s sleeping through every class, whereas I actually had to study my butt off just to stay afloat before.

Bottom line is, I think those that only advocate community/state schools should be open to situations like mine. It’s <$100 to apply to an Ivy and if you get accepted you might be pleasantly surprised!

Anonymous says:

I think the biggest problem with going the community college route is that you miss out on first year dorm life and the whole experience of being away from home. I know I could save money by doing that…but freshman year isn’t something I can redo. Obviously, if your choice is no college at all or start at CC, then by all means go to CC.

If you can go to a prestigious private school without breaking the bank, go.

For most people, public state universities are going to be the best mix of quality and value, without giving up the freshman experience.

Anonymous says:

I went to a private institution on an athletic scholarship but if i didn’t have that scholarship, I would have went to a public university.

Anonymous says:

I wish I had gone to an Ivy League school. I didn’t go for (stupid!) reasons unrelated to money, but had I known then just how inexpensively I could have gone, that probably would have tipped the scale in favor of doing so.

Anonymous says:

The optimum financial approach to college is to attend community college for two years, then transfer and get your degree from the best public university in the state you live in. If you are lucky enough to live in VA or NC, that would be UVa or UNC, two world-class universities.

Luke Landes says:

Why? You could also go to community college and then transfer to a private college and spend less. Or you can concern yourself with quality education in an environment with more motivated students, forgetting about community college. I don’t have anything against community college for those who choose to attend, but with so much financial aid (not talking about loans) available, I would only consider it a last choice.

Anonymous says:

I do think it is prudent to investigate all the available options. You can go to a private school for a reasonable price due to financial aid in some cases, but the schools promising “no loans” financial aid are mostly elite schools with large endowments. It is interesting that several schools have already backed off from that commitment. I don’t think this is a widespread pledge. I am all for college becoming more affordable and hope it will become more common.
I think many people equate price with quality. There was an article last year about a college which tried to cut tuition, and applications fell the next year. The feedback they received was that they were “not in the same league” as their competitors, when they had been perceived as equals when tuitions were similar.
I would certainly encourage students to apply to schools which fit their needs, then see what works out best financially. If you can get into an Ivy and pay 6-7 thousand a year, go for it.
By and large though, I think public institutions are still more affordable and allow ample opportunity to succeed. Community colleges provide an affordable opportunity for many and should not be discounted

Anonymous says:

I don’t buy the “quality education” argument. Full disclosure: I’m on the faculty of a community college in California. For the first two years of your college education where’s the quality in taking general ed classes in a 300-seat auditorium with an overworked TA? At a good community college you’ve got small classes and PhD’s doing the teaching. Imagine that: taking a freshman biology or music history class with an expert in the field as opposed to a grad student. And I don’t buy the “more motivated student” argument either. Granted, I never attended an Ivy League school, but I did my bachelor and masters degrees at a very large state research university, and received my doctorate from a large private research university. I saw plenty of unmotivated students at both institutions. As I see it, the only motivation that a student needs to be concerned about is their own. If an individual is ready to work hard and learn as much as they can, then the determining factor in choosing a school to attend should be “which institution is going to work the hardest to teach me well?” By that standard, most large universities would struggle to provide the quality offered by a good community college to a freshman or sophomore. And in California community college tuition is approximately $25 per credit hour. That means the music history class I mentioned earlier (which will automatically transfer to any CSU or UC school by the way) costs all of 75 bucks. I have to agree with Biz: save your money (and invest it while you’re young) and get taught by motivated professors. That sounds like quality to me.

Anonymous says:

You make a great point and it’s really inspiring to see your passion with education. However, you’re assuming that private/Ivy universities are all huge classes taught by unmotivated TAs whereas smaller community colleges like yours are taught by expert PhDs. Both scenarios can & often do exist at each type of university. Motivation is certainly an individual attribute but a lot of times students have to join the honors program at their state school to be on par with their peers at a top ranked private institution. Just wanted to suggest an alternative perspective.