Report: Public colleges will yield increasingly higher financial return for grads than private colleges

The prevailing wisdom used to be a degree from a private college yielded better earning prospects than one from a public campus, but that appears to be changing as the cost of private college increases.

Average annual tuition at private four-year institutions is now $31,231. In-state students at public four-year institutions pay $9,139 on average in tuition a year, while out-of-state students pay $22,958.

PayScale.com looked at the net return on investment in a public and private college education through the year 2025.  Its finding: The financial return to public college graduates is higher than grads of private schools, and the gap is widening. (One fact does not change. A college degree is still a sound investment.)

Here’s PayScale’s methodology. Keep in mind the report looks only at the financial ROI. Many people who attend small private colleges cite other benefits, including a more intimate campus setting, ready access to professors and greater opportunities to participate in campus activities, such as the radio station or chorus.

According to PayScale:

ROIA decade ago, private colleges were typically the better bet in terms of financial return on investment post-graduation.

And, the advice most aspiring college students heard was to go to the “best” (aka most selective) college they could get into and study something they were passionate about. They would be rewarded with an amazing education, a far-reaching network and plentiful career opportunities.

According to PayScale’s most recent data, public colleges are now typically the better choice in terms of financial outcomes post-graduation, than private colleges.

Is it true for every student, every school? No. But, public colleges (as a group) out-perform private colleges for financial ROI by 13 percent. If tuition increases and wage growth continue on their current trajectories, by 2025, the ROI gap between public and private colleges will grow to 24 percent, according to the PayScale College ROI Report forecast.

roi_forcast05According to the College Board, the average published tuition and fees at private four-year institutions has increased 146 percent in the last 30 years, and 225 percent for in-state students at public four-year institutions.

The big difference? One year’s tuition and fees at a public university averages $9,139, while at a private university it averages $31,231. Wages, however, are not increasing.

Reader Comments 0

10 comments
Educate To Career
Educate To Career

I invite your readers to check out our ETC College Rankings Index https://www.jobsearchintelligence.com/etc/college-rankings.php - we rank colleges based on the improvement in employability and earnings that a student derives from attending a particular colleges in relation to those similarly situated in other colleges.  As a nonprofit (Educate To Career) dedicated to positive student outcomes- we find it intolerable that so many young people are becoming debtor-slaves after 5.2 years of college + $40K in student loan debt- ending up qualified for a job (if they can even get one) that they could have had right out of high school!

AlreadySheared
AlreadySheared

@Educate To Career Your site ranks Georgia Tech at 343 (!!) You need to get to work - contact US News & World Report, money.com, salary.com, etc and tell them they've got it wrong.

Then get in touch with some of the companies that recruit on campus there (Google, Microsoft, Apple, Toyota, Siemens, Deloitte, Bain, UPS, Delta, Coca Cola, Ford, the CIA, Schlumberger, Home Depot, etc) and tell them they are making a mistake and need to git on over to Bob Jones.

OK the above was actually sarcasm.  A prima facie inspection of your site shows it is at best, useless.

Starik
Starik

@Educate To Career Not too useful, You have Bob Jones U. ranked high; what exactly is the job market for religious nuts?

MiltonMan
MiltonMan

...and both offer a plethora of useless degrees.  How come this s never addressed???  I received my undergrad from a private college & masters from a public one - both degrees in engineering. I really do not believe it is the type of school that makes a difference but the type of degree.

jerryeads
jerryeads

Yup, Starik has a good point. One would want to analyze the ROIs of Harvard and Emory separately from the mail order degree mills, not to mention Tier I research publics from the little guys.

Starik
Starik

Lumping Harvard, Emory, Oglethorpe and the University of Phoenix together as private colleges renders this analysis useless.

jarvis1975
jarvis1975

@Starik I was trying to figure that out. I don't see U of P in their list, but I'm not sure I'm looking at database correctly.

OriginalProf
OriginalProf

Whatever financial return these private colleges give to their students, it's undeniable that they'll give a very high debt load. That is so scary. Especially given the uncertain job market.

redweather
redweather

The job market of the past few years being what it is, this shouldn't really come as much of a surprise.