College cost consideration requires care
Some institutions encourage families to use overly simplistic comparisons on college costs. Whether it is a billboard ad or a flyer at the State Fair, it’s suggested that comparing costs starts and stops with looking at published tuition figures. But data analysis by the Minnesota Private College Research Foundation shows that when looking at all costs, families can come out ahead in the end with private nonprofit colleges.
Three key factors support this conclusion:
- Think about the amount actually paid. The listed price is often not what something will actually cost; the same goes for college. Merit and need-based aid can make a huge difference, lowering the listed price and making college much more affordable. For example, at the Minnesota Private College Council’s member institutions, 92% of families receive financial aid that is not paid back; the average student at our institutions receives $13,900 in aid. The result is a far lower “net price” for the vast majority of private college students.
- Consider graduation rates. Graduation rates aren’t just an indicator of quality, they also can help families think about their costs. Graduating on-time, in four years, can help families save money, avoiding additional tuition costs and allowing students to start their careers sooner. At the Council’s member institutions, the four-year graduation rate of 64% is better than the six-year rates at the U of M and MnSCU four-year institutions. The odds are that students will graduate from a private college in four years — but that it will take six years to graduate from the public systems.
- The longer-term value of the investment. Families can think about the quality of the education they’ll receive and how that will benefit their students, both as they graduate and later on in their careers. At the Council’s member institutions, students are more likely to interact directly with faculty, with most classes having fewer than 20 students. Our graduates receive the experiences and knowledge that will help them succeed.
Consider what the costs of delayed graduation can mean for families. The lost income for U of M and MnSCU students when they stay in school for a fifth and sixth year is projected at $79,800, using a recent projected annual income statistic of $39,900 for baccalaureate earners. When this is added to the cost of the additional tuition for those two years, plus the tuition for the first four years, the total is more than $100,000. This compares to the average cost for families at private colleges of about $57,000. And even if you choose to be more conservative in your forecasting and cut students’ projected post-graduation incomes in half, the total cost remains lower for the privates than for the publics.
Certainly, there are some programs that are more likely to require students to take more than four years to graduate. And averages won’t speak to what each student’s experience is like. But for families considering their options, it is critical that they realize that there are many factors to take into account when trying to project the costs of public and private higher education options.