Can Private Schools be Cheaper than Public Schools?

If you read this blog often enough, you might get the impression that I’m totally anti-private school. I frequently advise you guys to ditch private schools and their fat tuition bills in favor of cheaper public schools, and all else being equal, that’s probably going to be my advice most of the time.

But I’ve got nothing against private schools per se; I’m just against overpaying for anything, and certainly a big-ticket item like a college education that’ll likely be financed with loans.

Many private schools, though, do have deeper pockets and fewer students to whom their financial aid cash gets distributed, so don’t write off any particular school just because the sticker price is high. That’s just the starting point. To that end, Natalie needs some advice:

Dear Judge Josh,

I have a question about college costs and financial aid that I hope you can help me with. I’m currently looking at two different colleges, one that is about $32,000 a year, and the other $43,000 a year. I’ve looked to cheaper in-state colleges with a total cost around $20,000 a year but a friend who applied and received her financial aid package that had an EFC close to mine was told she would have to pay even more than the FAFSA estimated…quite a bit more.

Yes — just because your EFC is a certain amount (let’s say $8,000) doesn’t mean that every school is automatically going to offer you every additional dime in financial aid to offset the difference. I know you know this, but I’ll say it just the same — a GIANT factor in your school decision is going to be the financial aid package that each individual school you’re interested in offers you.

The fact that I will most likely have to take out such a large loan has put me off the less costly colleges and looking at the ones with prices that would typically intimidate me and brings me to my question: because my EFC is high for a $20,000 a year college, would I be able to actually save money if I attended a university that cost twice as much?

Well — possibly. Your EFC is what it is — it’s not based on what schools you want to attend or how much they cost. It’s based on the financial resources of you and your family.

But you haven’t indicated in your email that either of the more expensive schools you’re consider have made you a significantly greater financial aid offer. And if they haven’t and/or don’t make you a significantly better offer, then you don’t really have any reason to believe that you’ll be paying any less to go there — in fact, you’ll be paying more, since the original price is more.

Does that make sense? Am I understanding you correctly?

Please help, I have to reply to an acceptance letter soon!

Thank you,

You bet. There are two main issues at play here: the difference in credentials between you and your friend, and the difference in the financial aid offers among the schools you’re applying to.

Beautiful, isn't it? But no matter how much of a rebate you get, it's still a helluva lot more expensive than a Ford Taurus.

First issue: Both you and your friend may have equivalent EFCs, but that doesn’t mean you’re equals in terms of the financial aid you’ll be offered. Maybe you have a stronger resume and will get offered more money. Or maybe it’s weaker, and you’ll be offered less money. Maybe one of you has characteristics that are more sought after than the other. Whatever the differences between you, my point is, there are differences, and those differences may affect your total aid award, regardless of your EFC. The feds determine your EFC and you’re not going to change it — focus on the total financial aid picture at one school versus another.

Second issue: Is it possible that the higher cost of attending more expensive (and I assume) private schools will be offset by a larger financial aid award from those schools? Sure. Rich Parents University may cost $50,000 a year vs. the $20,000 price tag of Poor Folks State College, but if RPU offers you $45,000 per year in financial aid and PFSC only offers you $5,000 per year, then we’ve got more to consider.

But that’s not the end of things. Using the example above, you’ll need to come up with $5,000/year out of pocket to attend RPU, but $15,000/year to attend PFSC. But how much of RPU’s offer is in loans? If they’re giving you $45,000 per year in aid but $20,000 of it is in loans, then the equation changes again. In that case, even though RPU is offering you more money total, you’re still gonna be paying more money back in the long run if you go there.

And what if the loan package you’re offered (by either school) is in the form of a PLUS Loan (that your parents have to take out)? Are your parents willing to do so? Are you willing to ask them to? A big factor, to be sure.

All that said — buyer beware, my friends. You’ll see this phenomena at work your entire lives — that of the expensive product (private school) offering you a big discount (financial aid package) to entice you into spending more money on their product. It’s a great marketing technique.

Ever seen those BMW ads on TV offering up to — oh, I don’t know, $8,000 cash back on a new 5-series? Sure you have. Ever seen a similar commercial offering $8,000 back on a 2010 Chevy Malibu? Hell no, and you never will. But which car is cheaper? Yeah, it’s the Malibu, by about $20,000, even after that $8,000 “cash back” from BMW.

Ever seen the coupons in the newspaper for “Get $1 off when you buy two bottles of Heinz ketchup”? (Of course you haven’t — no one reads the newspaper anymore, let alone clips coupons — but I digress). Anyway, yeah — sure, $1 off sounds good, but it’s much cheaper to buy a cheaper brand of ketchup with no coupon.

Anyway, you get my drift. This happens everywhere, and private schools do it, too.

Natalie sounds like she’s in a time crunch here, but for the rest of you reading this — be sure to apply to all the schools that you’re seriously considering and get written financial aid offers, then crunch the numbers like we did above. And remember, you can always appeal your financial aid awards — and I recommend you do that whether you need the money or not.

As the greatest penny-pincher I know (my mother) always says — it never hurts to ask. Even if school costs $30,000 and an appeal gets you an extra $1,000 in grants — hey, that’s $1,000 you didn’t have before. Consider this: Is there ANY other situation in life where it’s not worth $1,000 to pick up the phone and make a call (or write an appeal letter, etc.)? Hell no. So why not do it with respect to financial aid? All they can do is say no. No big deal if they do.

I hope that answers your question, Natalie. What about you all — any comments or advice for Natalie? Let her know in the comments below.

25 thoughts on “Can Private Schools be Cheaper than Public Schools?”

  1. I agree that it all depends, but definitely be sure to look at what they offer! Just because it’s a private school doesn’t mean it’s any better than a public school and the same goes for large VS small college. I’m going to go to a relatively small (about 4,500 students) state college, but the education is as good as a private school and, although it’s an undergraduate college, the students get to do some things that even graduate students don’t get to. So, basically, what I’m saying is, do your research! Look online, ask questions, if possible go on a campus tour and/or information session.

  2. Joshua Richter

    Do your homework and ask the questions of what degrees do you offer and how much time would it take to complete and then decide if you are really saving money by going to public or private university. That’s my advice.

  3. i agree with the honorable judge josh. “it all depends…” don’t rule out private schools just because they are more expensive, on average. some private schools pride themselves on their bomb financial aid packages for low-income students. also, for grad school, private school are often good choices because they provide the same assistantship (and tuition waiver) opportunities as state schools.

  4. I agree, one other thing you may want to consider is which school will provide you with a good network. If you are thinking grad school you may want to go to a school that has professor working in the field of your interest. I got a full ride to a private university but I turned it down to attend a public school. While I am paying out a small amount the network, connections and internships I have made in the public school have set me up for to be a competitive grad school applicant.

  5. I would say to dig a little deeper.

    I am currently attending a private institution, and a year into it, I realized that I had made a huge mistake.

    The one big thing that I overlooked completely was that my school, as a private institution, was not accredited the same as the public universities. This meant that all of the classes that I have taken at my institution would NOT transfer over to any other school.

    It is not just me, I have heard about students who wished to transfer out of our school, only to find out that they would have to start over again as Freshman if they chose to do so.

    My school costs $500 per credit hour, so thats about roughly $30k a year. That means that all that money spent for classes would mean nothing if I were to leave.
    It doesn’t end there. Due to the nature of the transfer credits, it would be almost impossible to continue on to Grad School with the credits I earned.

    Really read and understand what you are putting yourself into before you consider. Going to a Private institution will end up costing me much more than I realized in the end, and keep me restricted in what I want to do with my academic career.

  6. You also need to look at what a degree from a certain school is WORTH to you or a future employer. A degree in anything from an ivy league school is going to pop off of your resume faster than a degree from a “random” state school.

    And will a degree from a state school get you a job? A lot of the time, it’s not what you know but WHO you know – and who knows about YOU as a result. Let me explain.

    I’m 24, and I’ve been to probably 4 community colleges and 1 state school, and now I am at a private school. Now that I know what I want to do, I was all set to attend another state school, because with my offered financial aid, I could attend full time and even live in housing. Then I asked them where their Fashion Design graduates are working (IF they’re working), and they told me Nike and Columbia Sportswear (can you guess where I live?).

    I then asked the private school I had been looking at where their graduates are working, and got names like Oscar de la Renta (if you have been living under a rock -or in the Pacific Northwest- he is a huge name is gowns, esp of the bridal or red carpet variety). Now no offense to sportswear, but I don’t even like going outside.

    I only had enough financial aid to attend this private school at half-time online (this school has MANY successful online programs – I learned to sew from video tutorials), so I did that, giving up my housing and full-time status. Now I’m going to live on campus in San Francisco this fall (WAY better than middle-of-nowhere, Oregon) because I’ve been granted a scholarship, and I expect to find a great internship when I complete (or before I complete) the program. I go to Academy of Art (this really isn’t a plug for the school, I promise), and they are the ONLY school invited to New York’s Fashion Week every year. When designers need interns, they think, “Oh, that school had a tent at Fashion Week”, and they call the Academy asking for interns. Their Graduate student fashion show is attended by designers, buyers and other important industry people. Their graduates are going straight from graduation to a fantastic internship with a well-known designer, something Parsons School of Design doesn’t even have (they are a huge, well-known, really old fashion school). When designers ask for interns, the students chosen don’t even finish, they just go into the world of fashion (no one is going to ask a designer for their diploma – only the skills needed). And the classes are all taught by instructors that are currently working in the fashion industry, so they keep you up to industry standards and teach a professionalism many don’t achieve until they’ve been in the “real world” for a while (and been chewed out or fired for late or sloppy work). This is true for all of their programs.

    So what can a school do for YOU besides take your money? Can they get you a job? Will they be able to teach you things that no one else can?

    And if you don’t know what you want to do yet, save your money and go to community college until you figure it out – that way, you can afford the best school for your career when you decide what that career will be. If your parents will let you live at home, for God’s sake, DO IT, no matter how badly you think you need to leave home. Go on vacation over the summer, turn your bedroom into a “dorm” and hang out with your classmates from the community college. If you MUST leave home, go to a state school until you find out what you want to do.

    Everyone ends up on “Plan C”, so the cheaper you make plans A and B, the more you can spend on Plan C.

    (The great thing about my school though, is that if you KNOW you want to be an artist of ANY kind, you can take the core art classes until you find your artistic calling -online, which is cheaper. If you already know your artistic calling, you jump into that program, with room to change your mind, since some of your classes can transfer to other degrees).

    So to sum up – keep it cheap until you know what you want to do, then find the best school possible for that degree- what can THEY do for YOU? Where are their graduates working, IF they’re working? A degree is worth nothing if it doesn’t get you a job – isn’t that why we go to college?

    And don’t worry about location – you can live anywhere for a little while (trust me, I know).

  7. I’ll give you a personal example:

    I’m going to a top-tier private research university. When I was looking at my financial aid offers, the other school I was comparing to was the cheaper sticker price in-state university (which, admittedly, is still a very nice university — UIUC). At UIUC I would have received *no* financial aid aside from loans, so as a result the super expensive university ended up costing much less because they offered me a ton of money. It all depends on your situation.

  8. I think that private schools are chosen because the education is much better than public schools. Although, I do have past friends who went to private schools & they turned out to be a wild bunch of people. Private schools set standards on how you can live, while public schools letys you live the l;ife you want to. I always thought private school were much more expensive because their educational standards are much better than public schools.

  9. Natalie, more money does not entirely mean better education quality . There is no gurantee on the private schools offering you what one of the good public schools does not. I would say it really is who you are that defines what you get out of where you go. Remember its not where you go to school its the value you gain and how you work at it. Someone once said the value of time lies not in the length of days but in the use we make of it.So i would suggest you go with the more affordable that points you in the direction of your career.
    Personally, the choice of school would be based on what courses are offered and what can i afford incase i have no financial aid .Sure private schools have smaller number that have an added advantage , but my reasoning is can i make the best of what i have if its a public school. So i would concentrate on making the best out of a public school and may be transfer to a public one for masters or further education.

  10. Well, I´m also not sure about Natalie´s situation. As Josh said, it all comes down to the financial aid packages.

    I was in a similar situation. Torned between a public college which would cost $30,000 and a private college, with a much better program in the area of my interest, that would cost me $50,000. With the scholarships they offered, the public college would cost me $12,000 and the private would cost $14,000. For that difference, I came to the conclusion that it was worth paying more for the private, since it was a much more prominent college in my field.

    If Natalie is in a somewhat similar situation, I´d say go with the private if the cost difference is minimum and the education gain is huge.

  11. The decision to attend a private or a public university is a NO brainer. Go to the university you want to go to regardless of the cost. If the private university has your major and you like the school environment and you have visited personally both private and public university then choose the university you feel comfortable attending. I have attended both a private and public university. I prefer the private university. I received more attention, the university was interested in my academic future. I did realize that a private university is more expensive compared to a public university. But you are investing in yourself and your future, so I recommend go with what school will make you happy.

  12. I attend a small private university and none of my financial aid is in loans. I think it ends up being like $15,500 including housing and books, so it can make sense to attend a private institution (slight digression: if I can make a suggestion, buy your books online over the summer before you ever get to campus. If you cannot find them out from your university’s bookstore website then email the professors directly. Even with shipping you can save over 50% on some books).
    Two other things I think ought to be considered concerning private schools vs. public schools.
    1. Your years at college are often significantly formative. On top of simply being a educational institution that will therefore teach you how to think and give you a significant amounts of information, my experience with most people is that the university system is actually designed to wean you into adulthood. Therefore it will affect the type of adult you are: your values, goals, etc. You may want to consider that secular public schools are not well equipped for this purpose.
    2. It makes a difference why you are going to college. I think that people are generally not very interested in academia, and therefore in a society where most people go to college most college programs become more concerned with learning a trade (even if they are not trade schools) and less concerned with what might be considered more “truly academic.” If you are more concerned with getting a degree that serves the purpose of showing that you have the necessary training to get a specific job (and I’m not criticizing that) then (ignoring #1 above) I would say there is little reason to attend a more expensive private school (unless you get into one with a REALLY good program in what you want to study), but when it comes to more of academic education it may that you just can’t get it at certain state schools.
    So to sum up what I’m trying to say using Judge Josh’s car analogy BMWs cost more because they are better cars. If you are just looking for something to get you around town most cars will get you where you need to go and the difference in cost will be mostly style and comfort, but if you need to drive from Seattle to New York the analogy might be closer to a choice between a 2010 BMW and a 1998 Chevy Malibu with 300,000 miles on it. Yes, the Chevy is significantly cheaper but there is a big question about whether you’ll make it to New York.

  13. I go to a private college that ended up costing me less than a public institution. I also had a high EFC. The private school that I attend automatically takes off up to $13,000 a year for just being accepted in the school due to “academic excellence” aka your high school GPA. That is half the tuition taken off right off the bat. Combine that with the many other scholarship opportunities that many private schools provide and it could POSSIBLY end up costing a good amount less or equal to that of a public school education. I pay around 4,000 a year out of pocket. 🙂

  14. I’ve always had a problem with financial aid. Since my first year my EFC was nearly $13,000 more than my schools total cost. No way in he’ll I was going to be offered financial aid ( stafford and subsidized loans- yes). I was unhappy and found a school I felt passionate about but it was private and more costly. I figured since that school was more than my EFC I should be granted some kind of aid. Again nothing but loans. I stayed there because I’m in love with my school and I figured otherwise where I was finally granted a pell grant. In the end my financial aid package for the school that cost $3000 was the same as the one that cost $18000.

    Do your research. Just because it cost more doesn’t mean you’ll be offered more.

  15. What do you mean exactley when you say…”And remember, you can always appeal your financial aid awards ? and I recommend you do that whether you need the money or not.”

    “As the greatest penny-pincher I know (my mother) always says ? it never hurts to ask.” “Even if school costs $30,000 and an appeal gets you an extra $1,000 in grants ? hey, that?s $1,000 you didn?t have before.”

    Please explain how to do this. What circumstances would you do this?



  16. Thanks for the responses everyone!
    I’m currently awaiting my financial aid package from a private school I applied to and I will DEFINITELY be looking at how much will be loans and comparing it to my friend’s in-state public school financial aid award.

    I already have checked the college out and their majors I’m interested in and the private university is pretty great, close with another equestrian school in Virginia that gets a lot of job offers from top ranches and breeders and does a lot of networking with some important people in the horse biz and their curriculum looks great, but if it turns out I don’t like it after a year I’m already lining up schools to transfer out to that accept credits from the private school.

    Thanks so much for the advice, I’ll be sure to ask lots of questions to the financial aid office now that I know what to look for!

  17. Hi there
    My daughter is at a private school with $50,000 per year tuition, room and board. Before you faint, let me explain.

    Our local (very good) state university offered her NO financial aid other than $1000 a year in an unsubsidized student loan. They also did not admit her into the Honors Program. She was in the top 5% of her graduating class and had a GPA (unweighted) of 3.8

    Her “dream” school offered her 50% in financial aid. only $1500 a year is in a subsidized student loan.

    The financial aid offered to her by her “dream” school was exactly the same as the state university. EXACTLY. The distance for traveling home is the same cost-wise.

    So why not go for the dream school, with the same out of pocket costs? Smaller classes. Better focus on her major.

    Yeah. We thought it was a no-brainer, too. Buh-bye state school.

    Don’t give up on your dream private school!!

  18. So I currently go to a private school, and let me inform you that the financial aid does not know the definition of AID. I have many friends who decided to go to private schools as well, for most of us it has not worked out. I believe that getting out of college without drowning in debt is a pretty vital start to venturing out into the world, and the private school I go to does not care how that may affect you. In my sole opinion, if I could do everything over again, I would go to a public college where I can get a degree for less debt. I realized after the fact, that unless it’s a job having to do with law or something of that sort (Ex: Harvard), then it really doesn’t matter what the quality of your education is, as long as you get that degree. I hate to put it so harshly but it’s true, as long as it’s an accredited college…it doesn’t matter where you get your degree, just go for whatever’s cheaper. (Which in most cases is public school’s vs. private school’s) Hope this helps!

  19. Oh and by the way: Hokulani is completely right about credits that do not transfer. If you were to go to your dream school, dig deeper. Because when I realized I wanted to leave private school and attempted to transfer, over half of my “core classes” for that school wouldn’t transfer to any of the 6 public schools I applied for. If I did transfer, I would practically go from being a starting junior back to being a freshman. So if you want to go to private school, be positive that you would be able to stick it out.

  20. My EFC was around $13,000. I was offered around $33,000 in grant aid from a $55,000/year hot shot private university. I was offered $2,000 from a $22,000 excellent state school. With the private university only $2,000 more expensive, there was really no contest. It’s worth it. It seems to me that if your EFC is under 3/4 of your cheap/state school cost, it will be roughly the same amount of money to attend any school you choose.

  21. I think it’s the quality of the school that should also be taken into account, for me the schools famous for the major I’m going for are expensive private schools, but I’ll pay an extra 5,000 a year to get a good education.

  22. In attending a Private school for a year I have to say I love it here! But I also love my quite! I didn’t think I could handle a public school because there would be millions of other people there and the noise they would all make. And so I went to private school and it is great totall of 800 students. But just to clarifie just because your paying more money doesn’t make the school better. The buildings at my school are all older than at least 50 years and some just aren’t that sound. In my dorm alot of the walls are seperating from the floors which is creepy. And I put my bed on cement blocks for more room because i just wouldn’t have enough room otherwise. But this doesn’t bug me to much because it could be alot worse. I at least don’t live in the all girl dorm that has no air conditioning! And if you do go to a private college be carefull they like to charge you for stupid little things you didn’t even no about and after so many well a 100 dollar charge for nails in the wall is really pathietic.

  23. Close to me is a private university, and a public university. I have chosen the private school. The tuition is approximately $3000 cheaper (they’re not real prestigious schools here in Delaware). However the education is much better for the cheaper price! They’re really flexible with you, and if you’re non-traditional, they work around your learning styles and what fits you best. Plus much smaller classes and more personalized interactions with the teachers. They also don’t base your acceptance on SAT scores and what high school classes you have taken, so everyone essentially has a fair chance. Not to mention, the school that I am currently enrolled at (a community college) does not have a lot of financial help (loan-wise), however the private university has numerous ways of giving/loaning money for your expenses. After this year, I will probably be transferring to the private university a lot sooner than I expected. And this is all due to the financial aspect of it.

  24. When my son was looking at colleges to attend, he researched universities and colleges which would offer him the best financial aid packages. To our amazement, the private schools offered better packages than public universities and colleges. Sterling MJ was accepted at Emory University (est. cost $54,500/year), the Pennsylvania State University Scholars Program (est. cost $30,000/year) , and Gettysburg College (est. cost $53,500/year). Emory University offered Sterling $52,000/year in scholarhips and grants, the Pennsylvania State University offered $18,000/year and Gettysburg College offered $49,000/year. To say the least Sterling chose to attend Emory University.

    Other universities and colleges with Great Financial Aid Packages are Rice University, Vanderbilt University, Brown University, Yale, Princeton, Columbia, University of Pennsylvnia, Swarthmore College, University of Notre Dame, Harvard, and Dartmouth. The packages depend on you EFC!

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