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Public or Private School? What You Need to Know

Students face many decisions about college. One of the more pressing questions is whether to attend a public or private university.

Public universities, such as the University of California, Berkeley or Georgia State University, are generally supported through state funds. Most public universities were founded and are operated by state governments. They are considered a part of the government and are thereby subject to the rules and policies set by the state.

Private universities, such as Harvard or Yale, are supported by endowments, gifts and donations from alumni and friends. They operate without the control of a government entity. They have more freedom in setting their admission qualifications and other policies. Some are private not-for-profit institutions and others are private for-profit institutions.

When considering whether to attend a private university or a public one, some major considerations include costs, the quality of education and the benefits and options available after graduation. Many of the United States' most prestigious universities are private, so they tend to be more expensive than state schools.

The National Center for Educational Statistics (NCES) writes: "For the 2014-2015 academic year, annual prices for undergraduate tuition, room and board were estimated to be $16,188 at public colleges and $41,970 at private nonprofit colleges. Between 2004-05 and 2014-15, prices for undergraduate tuition, room and board at public colleges rose by 33 percent, and prices at private nonprofit colleges rose by 26 percent, after adjustment for inflation."

The above are merely averages. For example, in terms of basic fees, at the University of California, Berkeley, the cost of attendance, living on campus, ranges from about $36,000 for in-state students to just under $64,000 for out-of-state students. At Harvard University, those same costs are $63,025 regardless of state residency.

As one of the most selective state schools, the University of California, Berkeley has among the highest state school fees. It is worth noting, though, that costs there are still significantly lower than private institutions' fees, and much lower for in-state students.

The good news is that financial aid is available at both public and private universities. The NCES reports that, "Eighty-six percent of all undergraduates enrolled in 2014-15 received some type of financial aid. Undergraduates were more likely to receive grants than student loans in 2014-15, but the average grant amount was less than the average student loan amount.

Across 4-year institutions, the average federal grant award in academic year 2014-15 ranged from $4,700 at public institutions to $4,858 at private nonprofit institutions. The average amount borrowed by undergraduates in 2014-15 was $7,000."

The report continues, "Undergraduates enrolled in 2014-15 were more likely to receive federal grants (such as Federal Pell Grants or Federal Supplemental Educational Opportunity Grants) than grants from any other source. The percentage of students awarded federal grants at 4-year institutions was about twice as high at private for-profit institutions (72 percent) as it was at public institutions (37 percent) and private nonprofit institutions (33 percent)" reports that one of the best values among national universities (in terms of costs offset by financial aid) is Harvard University with 55 percent of freshmen in the 2016-17 receiving financial aid based on need, mostly in the form of scholarships and grants. The average cost after receiving aid based on need was $16,228. Secondly, Princeton University had 62 percent of freshmen in the 2016-17 receiving grant aid based on need. The average cost after receiving grant aid was $18,885.

For that reason, experts say, students shouldn't just pay attention to sticker price, but to net price as well.

Net price is the amount students pay to attend an institution for an academic year after subtracting scholarships and grants. In essence, net price is the final price a family can expect to pay, and it's often lower than the published price, according to

Students should consult financial aid counselors at selected universities to find out what types of financial aid are available to them, and how to qualify for scholarships and grants at public or private institutions. Students and parents should try to be realistic in factoring in financial considerations in order to avoid a heavy debt load after graduation.

There are some differences in the educational content of private and public universities, though some would argue that perceived differences are greater than actual ones. While a graduate of a public university may be well-prepared to enter the marketplace, a student who graduates from a private university, such as one of the Ivy League institutions, may have an edge based upon the reputation of the institution.

Some public colleges and universities, however, may have excellent reputations for graduating students in specific fields of study. That allows those students to be highly competitive and sought after in the marketplace. Ultimately, many employers are able to distinguish between alma mater and actual workplace skills, but prospective students should weigh these issues when choosing between private and public universities.

In terms of typical real differences, at most private universities, the ratio of students to teachers is generally low. There are often well-known and well-regarded figures among the faculty. However, tenured professors are often expected to publish and to teach graduate level courses, and they may not be particularly available to students. In most public universities, there may be a few hundred students in one class. However, faculty may be more approachable. There are also graduate teaching assistants and instructors available for undergraduate classes, employed by both public and private schools.

Students should also consider their personal needs and preferences. A private college may have restrictions that affect an individual student in an unfavorable way. However, a public university is not allowed to discriminate against most diverse lifestyles.

Overall, it is important to look at which school excels in the student's chosen field of study, and is financially accessible and personally suitable. These are more important factors to consider than whether the institution is public or private.

With research, and by carefully weighing the options, the decision will become less confusing. Students can achieve their goals at either type of institution. Determination and drive ultimately establish one's success in the global marketplace.


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OCAP believes that financial literacy and understanding the financial aid process are critical aspects of college planning and student success. OCAP staff who work with students, parents, educators and community partners in the areas of personal finance education, state and federal financial aid, and student loan management do not provide financial, investment, legal, and/or tax advice. This website and all information provided is for general educational purposes only, and is not intended to be construed as financial, investment, legal, and/or tax advice.