In an earlier article, we explored the real total cost of graduation using two hypothetical students, Larry and Lauren, who were each interested in studying English Literature in northern New York state. While Larry attended Potsdam, a public university, Lauren chose St. Lawrence University, a private school.
Although it seemed that Larry might be getting a bargain price for his public education, we crunched the numbers and found that the two schools were actually quite similar when additional elements that influence the total cost of graduation were factored in.
Is the story of Larry and Lauren special, or will the same dynamics play out again? To find out, we are exploring the hypothetical scenario of Selena and Sam.
Selena and Sam – Heading to Chicago to Study the Social Sciences
Selena and Sam both live in Illinois and have the heart for social justice. They became interested in sociology and criminology when they learned about the “Chicago School,” famous ethnographic fieldwork of the urban environment, which was conducted in Chicago in the 1920s and 1930s. With gang and gun violence a regular theme on the nightly news, they are looking for Chicago-based schools so they can conduct similar fieldwork in modern times.
Selena has chosen the University of Illinois at Chicago, a large public institution of about 15,400 undergraduate students that has 10.3 percent of its population also studying social sciences. A look at the numbers:
- Tuition and Fees (1 year): $13,100
- Total Price for an In-State Student (1 year): $28,600
- Percentage of Undergrads Receiving Financial Aid: 62%
- Average Net Price After Gift Aid (1 year): $11,900
This is a snapshot of Year 1, but costs at a public school increase by an average of 3.6 percent per year. Here is how all four years look.
- Year 1 Net Price: $11,900
- Year 2 Net Price: $12,400
- Year 3 Net Price: $12,800
- Year 4 Net Price: $13,300
- 4-Year Estimated Price (Total): $50,400
Then we have Sam. He heard about Wheaton College, a top liberal arts college located in Wheaton, Illinois, a suburb of Chicago and is excited that about 12.6 percent of the estimated 2,400 full-time undergraduates are also studying the social sciences. Here are his numbers:
- Tuition and Fees (1 year): $30,100
- Total Price for an In-State Student (1 year): $41,500
- Percentage of Undergrads Receiving Financial Aid: 68%
- Average Net Price After Gift Aid (1 year): $24,600
As a private school, we can expect an average annual increase of 2.4 percent.
- Year 1 Net Price: $24,600
- Year 2 Net Price: $25,200
- Year 3 Net Price: $25,800
- Year 4 Net Price: $26,400
- 4-Year Estimated Price (Total): $102,000
On the surface, it looks like Selena is getting a bargain because at her public school she will pay almost half the tuition of Sam’s private school. However, the total cost of graduation goes deeper than these ‘surface’ expenses when we look at the graduation rates.
4-Year Graduation Rates
- Sam’s Private School: 76%
- Selena’s Public School: 31%
Because of the lower graduation rate, Selena will more than likely to require one (or more) additional years of schooling to finish her degree, while Sam will likely graduate on time and earn the average starting salary of $49,900. When we factor these items in:
- Selena: $50,400 + 13,700 (Year 5 tuition) = $64,100
- Sam: $102,000 – $49,900 (Year 5 wages) = $52,100
As it turns out, Sam (even though he attended a private school) will have a lower cost of graduation after five years. If Selena needs a sixth year to finish her degree, the differential becomes even greater.
Total Cost of Graduation and You
Once again, we have found that looking at tuition numbers alone can be misleading when you are trying to compare a public and a private school. Factors such as gift and financial aid, graduation rate, cost of additional years of schooling, and wages earned when you do graduate on time can make private schools cost-competitive with public schools. We have seen it happen with Larry and Lauren, and now with Selena and Sam.
In our next article, we will head to the west coast where we analyze the hypothetical situation of Emma and Ethan, who are pursuing degrees in engineering. What will they discover about the real total cost of graduation?
Why Private Colleges Maybe More Affordable than Public Universities