Affordability: Factors to Consider When Comparing College Costs

Families often assume that private colleges are out of reach because of their higher "sticker price." But what students actually pay, known as the   net price, is usually far less than the published tuition rate. In many cases, after scholarships and grants, a private college can even cost   less than a public university. Understanding why can help families make better decisions about college affordability.

The Myth of the "List Price"

The tuition listed on a college's website rarely reflects what families ultimately pay. Private institutions, in particular, use   tuition discounts and scholarships   to reduce costs significantly.

According to the National Association of College and University Business Officers (NACUBO), the average institutional tuition discount for first-time, full-time students at private nonprofit colleges hit an all-time high of   56% in 2024-25. This means most students receive more than half off the listed tuition price through scholarships and grants.

Unlike need-based federal aid, this   institutional aid is often merit-based-awarded for academic, artistic, or leadership achievements, making it available to a wide range of students.

Graduation Rates and Time to Degree

Time to graduation plays a crucial role in total college cost. Students who take longer to finish pay more in tuition, housing, and living expenses, and they enter the workforce later.

Recent data shows clear differences between private and public colleges:

• Private nonprofit colleges:   Around   64-68%   of students graduate in four years.
• Public colleges and universities:   Only about   35%   of students graduate in four years, with many requiring five or more years.

Graduating sooner can save families thousands of dollars and reduce student loan debt while boosting lifetime earnings.

Student Debt and Loan Outcomes

Average student debt for private college graduates varies by state, but thanks to generous institutional aid, their monthly loan payments are often similar to, or only slightly higher than, those of public college graduates. In many states, the difference in repayment averages   less than $25 per month.

Private college graduates also tend to have   lower loan default rates   and stronger loan repayment outcomes. About   75% of private college graduates begin paying down their loans within five years, compared to about   66% of public college graduates. Lower default rates reflect stronger career outcomes and more robust alumni networks that support post-graduation success.

Additional Benefits of Private Colleges

While cost is important, families should also consider the   value   offered by the educational experience, including:

• Smaller Class Sizes:   Private colleges often maintain student-faculty ratios around   13:1, compared to   20:1   at public institutions.
• Full-Time Faculty:   Courses are more likely taught by full-time professors rather than graduate assistants.
• Internship and Career Networks:   Private colleges often provide stronger alumni networks and career placement opportunities.
• Mission and Fit:   Many private colleges are faith-based or mission-driven, providing supportive communities that align with student values.
• Higher Lifetime Earnings:   Over a lifetime, private college graduates earn about   10-20% more   than public college graduates.

FAFSA and Financial Aid Changes to Know

The   FAFSA Simplification Act, rolled out beginning with the 2024-25 FAFSA, introduced major updates to the federal aid process:

• The   Student Aid Index (SAI)   replaced the Expected Family Contribution (EFC).
• The FAFSA no longer divides eligibility by the number of siblings in college.
• Grandparent contributions   (such as 529 plans) are no longer counted as student income, removing previous penalties for family support.
• The application process is shorter and integrates IRS data retrieval for easier completion.

Families should note that some private colleges also use the   CSS Profile   for institutional aid, which may consider additional factors not included in FAFSA calculations.

Key Takeaways for Families

• Focus on   net price, not sticker price-most students at private colleges receive significant institutional aid.
• Consider   time to degree-graduating in four years can dramatically reduce total costs compared to five or six years at a public college.
• Be aware of   federal aid changes   (SAI, FAFSA simplification) and whether a college also uses the CSS Profile.
• Look beyond cost to assess the   value of smaller classes, personalized support, and strong career networks.

Why Private Colleges Can Be a Smart Investment

Private colleges consistently combine strong financial aid, higher four-year graduation rates, and robust career outcomes to provide a compelling value. When families look beyond the list price and focus on outcomes and fit, they often find private colleges not only affordable-but an investment that pays off over a lifetime.