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:
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.
According 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.