Comparing the Value of a Public College or University to that of a Private One?

Key Takeaways:

• Public universities are generally cheaper for in-state students but can take longer to graduate due to class competition.
• Private universities often offer more generous financial aid and have a higher prestige, potentially enhancing future career prospects.
• Both public and private universities offer diverse environments, but public universities tend to have larger class sizes and more vibrant student life.

When considering the value of a college, you might be wondering whether a public or a private school offers more. This is a common consideration that students and families take into account during the higher education search. 

Many people tend to think a private institution offers more prestige and may hold higher appeal to future employers. The truth is, there are benefits to both types of institutions, including public and private university. Either could be better for your personal needs, based on a number of factors. The discussion of for-profit vs. nonprofit colleges is a question we answer in a different article.

Public Versus Private Universities: What’s the Difference?

Before you decide to attend a public or private university, you need to have all of the facts. First, you should understand what sets each type of higher learning institution apart from one another. The main difference comes down to funding sources.

State governments fund their public schools, while private institutions of higher learning are funded through donations, known as endowments, from alumni and other supporters. Here are some other considerations when comparing the value of a public college or university to that of a private one.

Public School Admission Standards Favor State Residents

When selecting a college or university (whether it be public or private), admissions should always be a consideration. That is, before setting your sights on an institute of higher learning, you should ask yourself: What are my chances of getting in?

Here’s what you need to know about public versus private school admissions standards: As a general rule, public colleges and universities will grant admissions preference to in-state students. The justification for this is that state tax dollars fund these schools, so residents should be the ones who benefit from them. However, if an institution is particularly selective, the competition may be more comparable between qualified students regardless of their home state.

Some private schools like the Ivies are extremely difficult to get into. Harvard, for example, admitted only 5% of all applicants in 2020. Princeton admitted just 6% of applicants during the same year. Not all private colleges and universities are this difficult to get into, however. According to the National Center for Education Statistics (NCES), there are more than 200 private postsecondary schools in the nation with a 90% or higher admissions rate.

Both Public and Private Universities Offer Diversity

There’s no doubt that diversity is key when it comes to a rich college experience. When a college enrolls a diverse population of students, classroom environments become places where various perspectives are represented, and cultural exchanges take place. If you value diversity within an institution of higher learning, then you’ll be glad to learn that both public and private universities offer a broad range of diversity in their student populations.

Frequently, students come from distant geographic regions to attend private colleges, particularly prestigious ones. While public schools may attract students closer to home, they also tend to provide diversity due to their larger size. If diversity is a priority for you, it’s best to research the university’s enrollment numbers, whether it’s a public or private institution.

Students May Spend More Time at Public Colleges

The standard completion time for a bachelor’s degree in the United States is four years. For a master’s degree, you can reasonably expect an additional two years of study. If you want to stick to this general schedule, you need to consider average completion times for public versus private college students. Because of competition for classes needed to meet graduation requirements, it can take longer to complete a degree at a public university.

Graduation rates exceeding four years are not uncommon at such institutions. This can be problematic for some students because longer matriculation means an additional cost. While still likely to cost less than private schools, this is something to think about when considering the value of a public college. Plus, extra time spent working towards a degree represents money lost when it comes to income that you could be earning on the job.

Cost of Public and Private University Is One of the Biggest Differences

The cost of your college education should always be kept in mind when making decisions about your school attendance. There can be a huge gap when it comes to the tuition expenses associated with public versus private schools. To illustrate, consider that the cost of a public university was just $10,560 for in-state students in 2020, according to The College Board. In-district students paid significantly less (i.e., $3,770). While the cost of public university attendance was much more for out-of-state students–$27,020—it still paled compared to the hefty tuition of a private university, which cost an average of $37,650.

When evaluating the price tags of public versus private universities, it’s important to understand the reason for the discrepancy. Often, people think that just because something is more expensive, it’s inherently better. This isn’t always the case when it comes to public and private universities. In fact, when it comes to higher education, the difference in tuition often has more to do with funding than quality.

While state universities are funded primarily by tax dollars and government subsidies, private schools rely on tuition to keep the doors open.

Financial Aid May Differ Too

There is a flip side to the cost issue regarding private versus public universities, though. While public schools may be cheaper on average, private schools tend to offer more aid money in grants and scholarships. A recent survey of private universities indicated that these schools offered an average tuition discount of over 52% for first-time students in 2019.

Moreover, it’s important to note that even though private colleges and universities aren’t funded by the federal government, students who attend these schools may still be eligible for federal financial aid.

The Prestige Factor

Private colleges and universities are more often associated with prestige in the minds of many, but many public institutions carry an elite reputation, as well. Thus, you should look at both types that offer the programs you are considering to weigh the value.  Keep in mind that some schools are known for high-quality instruction in a particular academic discipline. If you know what you want to major in, find out which schools offer the best bang for the buck in that particular subject, whether they be private or public schools.

Class Size Matters

There’s more to consider beyond the cost of public versus private school, especially if you have a distinct learning style or preference. Public colleges and universities tend to be much larger than their private counterparts, which can have a big impact on class sizes. Ask yourself how comfortable you’ll feel in a large lecture hall versus a more intimate classroom setting. If you’re an independent learner and like the idea of blending into a sea of your peers, then a larger public university might be ideal for you.

On the other hand, if you learn best through collaborative class discussions and one-on-one instruction, a smaller private school may be more your speed. Of course, class size alone isn’t enough to determine whether public or private school education is best for you. After all, small public universities do exist, as do larger private colleges.

Number of Program Offerings

Since private schools tend to be smaller in enrollment, they’re also typically associated with fewer academic offerings. Of course, if you already have a major in mind, then this isn’t an issue so long as the school offers your program of choice. If you’re undecided, though, a public university with more courses in its catalogs could be beneficial. Specifically, these larger schools could provide a greater opportunity for you to explore possible majors before declaring an area of study.

Student Life

Since public universities have larger student populations, it would stand to reason that these schools have more activities to engage in. While there are some exceptions, it’s safe to say that the student life you can expect on a public school campus is more vibrant than that of a private school. Thus, if your college choices come down to public versus private school education, you may have to ask yourself if academics alone is enough to fulfill your college desires.

If you dream of joining an active sorority, fraternity, sport, or club on campus, then a public university may be a better fit. That’s not to say you won’t find smaller chapters on private school campuses, though.

Return on Investment (ROI)

At the end of the day, college is an investment, so it’s wise to think about what your return will be in the long run, whether you attend a public or private university. What is ROI, exactly? Your return on investment is the money you make from an investment after all costs are accounted for. When you apply the concept of ROI to higher education, your return is the salary you earn over your lifetime minus what you paid in tuition expenses.

Some recent reports have indicated that the ROI for private schools surpasses that of public universities on average. Still, as you might imagine, the returns vary widely not only from school to school but also by major. You can find the average 20-year return for individual schools at PayScale.com.

Frequently-Asked Questions About Public Versus Private Universities

The decision to attend a public or private university for your college degree is one of many you’ll have to make during your journey toward higher education. It’s important to have all of your questions answered before making this critical choice.

Below, our editors have addressed several of the commonly asked questions about public versus private institutions of higher learning. Keep in mind that the information provided here is general in nature and not intended to reflect any specific college or university.

Q: What is the difference between a private and a public university?

A: There may be many differences, but the primary distinction involves the school’s funding sources. Private schools are funded by student tuition as well as donations and endowments. Public schools, on the other hand, are funded by state tax dollars.

Q: Are private schools better than public colleges or universities?

A: Not necessarily. While some elite private universities (think Harvard and Yale, for instance) are associated with a first-class higher education experience, some extremely reputable public universities such as the University of California at Berkeley and the University of Michigan at Ann Arbor. Some schools may be associated with better outcomes for a particular major as well.

Q: Is a private university education more expensive?

A: It can be. Private universities do not receive funding from the government, so they may be more reliant on tuition dollars, which can drive costs up. Still, these schools are also known for their generous scholarship and grant programs, so the price you end up paying could be substantially less than the sticker price.

Q: Is financial aid available for private colleges?

A: Yes. Federal student aid, including loans and grants, are available to public and private school students alike.

Q: Do private or public colleges give more scholarships?

A: It depends on the school. Both types of colleges offer scholarships, but private schools may be more generous with their awards.

Q: Are private or public universities better?

A: There’s no way to say which type of university is definitively better or worse. Each individual should reflect on their options and circumstances regarding which higher education pathway is preferable. Factors to consider include admissions chances, tuition and aid, class sizes, and degree offerings, for example.

These are just some of the aspects that affect the value of public and private colleges and universities. Of course, the ultimate value of a college depends on whether or not it meets your most important criteria and if the academic program you choose is one of quality standards. When all is said and done, it’s a choice only you can make!

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Sources:

• CNBC: Private Colleges Pay Off More than Public Colleges
• The College Board: Trends in College Pricing and Student Aid (2020)
• National Center for Education Statistics (NCES): College Navigator
• NACUBO: 2020 Tuition Discounting Study
• PayScale: Best Value Colleges