The Cost of Private vs. Public Colleges

The cost of tuition and fees is typically higher at private colleges than public ones, leaving many students to believe they can only afford one type of school. But college administrators and other experts say it’s not quite that simple: Tuition discounts and institutional dollars at private schools can help tip the scales on affordability, so students should look beyond initial sticker prices.

“There are all kinds of ways to pay for college,” says Michael Kitchen, senior managing editor and higher education finance expert at Student Loan Hero. “I would look at it on a school-by-school basis rather than choose based on whether they are private or public. What you end up paying is not necessarily going to be the list price.”

Private colleges were estimated to offer historically high average tuition discounts to students in the 2021-2022 school year, continuing an upward trend, according to the latest National Association of College and University Business Officers survey. The average tuition discount was estimated to be nearly 50% for undergraduates for the year.

It’s a common misconception that private institutions aren’t accessible to certain groups, like low-income and first-generation students, experts say. In fact, some private colleges, like many Ivy League schools, meet students’ full demonstrated need. The cost of tuition at Princeton University in New Jersey, for example, is covered for families who make $160,000 or less. Room and board may also be covered or discounted, depending on household income.

[Read: See the Average College Tuition in 2021-2022.]

The National Association of College and University Business Officers survey shows that in 2021-2022, the share of first-time, full-time freshmen who received an institutional grant or scholarship from private nonprofit colleges was estimated to be 89.5%.

Public universities offer their own draws, including lower tuition rates, particularly for residents of the state. According to 2020 data from U.S. News, undergraduate students at public four-year institutions borrow less. Those who graduated in 2020 from a ranked private college borrowed $32,029 on average, while public college graduates took out an average of $26,627.

What Is a Private College?

Private colleges are privately funded, with much of their funding coming from donors and tuition dollars. These institutions can range from liberal arts to fine arts colleges, as well as religious colleges and schools dedicated to a specific field such as medicine or business.

These institutions are often, but not always, smaller than public institutions, which can translate to smaller class sizes. Private schools operate independently, meaning they set their own policies and offerings.

What Is a Public College?

Public universities and colleges rely on federal, state and local funding. Historically, states have carried the bulk of funding responsibilities, but in recent years, state funding has declined and federal spending on public colleges and universities has surpassed state funding.

These institutions are supported by taxpayers and usually offer discounted tuition rates for residents of the state. Public schools can be much larger and have multiple campuses throughout the state.

Differences Between Public and Private Colleges

Tuition is increasing across the board at both private and public colleges. U.S. News data shows that over 20 years, tuition at national universities increased by 144% at private colleges, 171% at public colleges for out-of-state students and 211% at public colleges for in-state students, not taking into account inflation. Tuition at these schools is outpacing inflation, however: The consumer price index, a common measure of inflation, increased by around 54% from July 2001 to July 2021, according to the U.S. Bureau of Labor Statistics.

[Read: 10 Most, Least Expensive Private Colleges.]

But the cost of tuition and fees at private colleges is typically much higher than the cost at public institutions, according to U.S. News data. The average cost of tuition and fees in 2021-2022 for a private college was $38,185 — significantly higher than the average tuition and fees at public universities and colleges, which was $10,338 for in-state students and $22,698 for out-of-state students.

Discounts may not always mean cheaper out-of-pocket costs for families. Students may see larger scholarships from private colleges in their financial aid packages, says Lori Vedder, interim vice provost of enrollment management and director of financial aid at the University of Michigan–Flint, but evaluating financial aid offers from private and public colleges isn’t always an apples-to-apples comparison. Vedder recommends students pay close attention to a college’s cost of attendance and what is and isn’t included.

“If you’re looking at your son or daughter’s award letter and you see that a public institution is awarding $10,000 for an academic year and perhaps a private (college) is awarding $15,000 for the academic year, you have to look at the cost of attendance and say, ‘How much of that cost of attendance is this meeting, and what, if any, will our family’s out-of-pocket expenses be?'” Vedder says.

[Read: How Student Loan Debt Is Different From Other Types of Debt.]

Students may notice more institutional grants or university grants funded by local, federal or state dollars on financial aid award letters from public institutions. Financial aid from private colleges is more likely to include specific scholarships funded by donors.

Before counting any college out, Bernard A. Pekala, assistant vice provost of student financial strategies at Boston College, says students should apply or take advantage of net price calculators, which are federally mandated calculators hosted on college websites to help students estimate how much financial aid they may receive at a given institution. He also recommends students research the kinds of aid they are getting, including whether the aid is in the form of student loans, funding as part of the federal work-study program or grants and scholarships that do not have to be repaid.

“You shouldn’t automatically exclude private schools, but also your personal circumstances can vary positively or not so positively,” Pekala says. “I strongly recommend they also include some public schools in their application and some private schools to balance them out.”

Trying to fund your education? Get tips and more in the U.S. News Paying for College center.

More from U.S. News

See 20 Years of Tuition Growth at National Universities

In-State Tuition Increases Sharply at Some Public Schools

An Ultimate Guide to Understanding College Financial Aid

The Cost of Private vs. Public Colleges originally appeared on

Update 06/08/22: This story was published at an earlier date and has been updated with new information.

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