Jon O'Donnell Updated on May 16, 2017

Many prospective students focus their college search on public universities, not private schools, because state universities typically charge much lower tuition. But, despite the higher tuition, a private college or university isn’t always more expensive – and sometimes costs significantly less.

Understanding sticker price versus net price

A school typically publishes its tuition costs online, but this “sticker price” can sometimes be higher than what you’ll end up paying. To understand your actual cost per year, take the tuition amount and subtract available gift aid, such as school scholarships. This gives you your net price. Sometimes, the most expensive school turns out to be the best deal when you factor in scholarships. 

Comparing schools by their net price

To avoid any unpleasant surprises, try to get a sense of how much you can expect to pay before you apply. Visit the College Affordability and Transparency Center, a helpful resource that shows the most expensive and least expensive schools based on tuition and net price. 

Most universities have a college cost calculator to help you determine your net price. Simply fill in the requested information on the school’s calculator and it will subtract your estimated gift aid from the tuition. This will give you an idea of the actual cost to attend each school, so you can compare the affordability of your options.

Not all colleges provide the same financial aid

The average public school tuition is lower than the average private college tuition, but comparing sticker prices won’t give you the whole story. Public university tuition varies by school and state, and out-of-state students may pay more than double what residents pay.

Private schools are more likely than public schools to offer scholarships that greatly reduce the cost. But, private schools that seem similar – based on size, academic programs and reputation – may offer extremely different amounts of gift aid. Some private colleges offer merit-based scholarships to most incoming freshmen, while others – including many top-tier private schools – offer mostly need-based scholarships.

When a private school costs less than a public school

Consider this scenario:

Jane is a high school senior from Philadelphia. Her top college choices are Virginia Commonwealth University, a large state school in Richmond, and Arcadia University, a small liberal arts university in her hometown. VCU offers an attractive in-state tuition of approximately $13,000, while Arcadia’s tuition is roughly $40,000. This seems like a no-brainer.

But, Jane is a Pennsylvania resident, which means she would have to pay VCU’s out-of-state tuition of approximately $31,000 per year – much closer to Arcadia’s sticker price. And, all of Arcadia’s full time, first-year students receive institutional grant or scholarship aid, which averages about $22,000 per freshman. For Jane, Arcadia will be far more affordable than VCU. Plus, staying in Philadelphia will help her keep her expenses even lower by allowing her to continue to live with mom and dad, an option she wouldn’t have in Virginia. 

Many factors determine whether a public school or a private school is more affordable. Be sure to compare the tuition, available gift aid and local living expenses of each choice.

Taking advantage of financial aid opportunities

Whether you choose a large public university or a small private college, filling out the FAFSA is essential if you want financial aid. To see how this process works, take a look at our step-by-step FAFSA guide. If you need additional financial aid to make your college plans a reality, we can help you compare student loan lenders.

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