Affordability - Factors To Consider When Looking At College Costs

Colleges have a “list price” of tuition. Don’t let this scare you away from considering a private college education. Not only is the “list price” unlikely to be the price that you actually pay. In fact, a private college may cost less than a state school.

By SAGE Scholars — May 1, 2022

Factors To Consider When Looking At College Costs

Colleges have a “list price” of tuition. Don’t let this scare you away from considering a private college education. Not only is the “list price” unlikely to be the price that you actually pay. In fact, a private college may cost less than a state school.


  1. Scholarships

    Scholarships, also known as merit aid, are the part of a student’s financial aid known as “gift aid” or “tuition discounts”. This is aid that does not have to be repaid (like student loans), and is not based on a family’ financial need (like some grants). Tuition discounts tend to be large at most private colleges, compared to small, or non-existent, at state and public colleges.

    According to a survey by the National Association of Independent Colleges and Universities (NAICU), 89.2% of first-time, full-time private college freshmen receive a reduction from the listed price of tuition. Grant aid is rising as private colleges seek to remain affordable and attract the best possible student body.

  2. Graduation Rates

    According to the U.S. Department of Education, 53% of students at non-profit private colleges & universities complete their degree in 4 years — versus only 33% at public college & universities. Students are 61% more likely to graduate in 4 years at a non-profit private college. Overall, private colleges graduate the same percentage of students in 4 years that state schools do in 6. Graduating from college in less time means significant savings in tuition, room, board and other costs associated with being in school. It also means getting into the job market sooner which increases career earnings and can reduce interest payments on student loans.

    A study by the Independent Colleges of Indiana (ICI) showed that the state’s 31 private colleges were enrolling 15% of the state’s incoming freshmen — but issuing 29% of all bachelor’s degrees. Why? Because students are far more likely to graduate from a private college or university. Student’s who do not graduate are more likely to have difficulty repaying student loans and may default on the obligation.

When most people shop for major purchases such as a house or a car, they don’t just look at price. Instead, other factors such as quality, and overall “fit” are considered. Families should look at college the same way. For example, consider student loans. In Pennsylvania, the federal student loan debt for graduates of the 55 private colleges that belong to the SAGE Scholars Tuition Rewards Consortium is not much higher than that of state school grads (less than $20 per month).

Median Federal Student Loan Debt at Graduation
State SAGE Scholars Private Colleges Public Colleges
Indiana $24,820 $20,602
Iowa $23,851 $22,165
New Jersey $23,730 $22,087
New York $24,059 $20,760
Ohio $25,360 $23,628
Pennsylvania $25,710 $22,883

What other factors should a family consider when comparing colleges?

  • Educational Quality: Private colleges are not reliant on state subsidies. Not only does this allow for more flexibility regarding providing financial assistance. It also enables creation of new courses that meet new career needs.
  • Class Size: Private colleges have a much higher percentage of classes with fewer than 20 students. Big lecture halls tend to be rare.
  • Student/Faculty Ratio: Private colleges have an average student/faculty ratio of 13:1 — versus 20:1 for at a public college. This allows for more personal faculty attention.
  • Full-time Faculty: At private colleges, classes are more likely to be taught by full-time faculty rather than by graduate students. Students can get to know their professors.
  • More Internships & Superior Job Placement: Private colleges offer more internships. Through investment that emphasizes career placement and often utilizing an extensive alumni network students graduate career ready.
  • Career Earnings: Over a lifetime of work, private college graduates earn 10% to 20% more than public college graduates.
  • Faith-Based: Many private colleges are faith-based, making it easier for students to find colleges with shared religious values.
  • Lower Loan Default Rates: Graduates of private colleges default on their student loans at a much lower rate than graduates of public colleges.

When most families consider all of the benefits that a private college education can offer, they find that those benefits outweigh any marginally higher net cost.

SAGE Scholars

SAGE Scholars

At SAGE Scholars, we deeply believe in the value and quality of private higher education. Our mission is to provide access to affordable college opportunities while bringing together families, colleges & universities, and benefit providers to create college funding solutions. Since 1995, SAGE Scholars has bridged the gap between students who want a quality private college education and colleges that will work closely with member families to ensure affordability — all at no cost to the families.
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