The Economics of Education: A Public vs. Private experience

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LINCOLN, Neb. - There are roughly 7,000 colleges across the United States, and deciding which university to attend can be a challenge for both students and their families.

While many factors, such as location or area of study, play a major role, the accompanied cost often has a heavy influence on the decision-making process.

And when comparing schools locally, it is likely that a student will see a dramatic difference in price when comparing institutions such as the University of Nebraska and Nebraska Wesleyan University, marking the stark contrast between a private and public school.

A private school, or a university that does not use public funding, is often more expensive. Nebraska Wesleyan University carries a price tag of roughly $38,140 a year for first-year students, including tuition, fees, and housing. The University of Nebraska at Lincoln roughly costs $19,300 a year for tuition, fees, and room and board for incoming freshman.

However, price can be deceiving, as different forms of financial aid can impact what a student ultimately pays to attend one of the aforementioned schools.

“I would say that roughly what a student actually pays when they come to Wesleyan is roughly 50 percent of costs. That is just in institutional funding,” Tom Ochsner, the Director of Scholarships and Financial Aid at Nebraska Wesleyan University, said. “That is very similar to other private schools.”

Many private schools, such as Nebraska Wesleyan, offer many different forms of financial aid, helping to reduce the amount of loans a student must take out to attend.

“It is either through our endowments or through donors who give us money, or the university sets aside some of its budget to help students pay that tuition through financial aid,” Ochsner said. “So we are always trying to narrow that gap in the cost of attendance as compared to a public school as much as we can.”

On the other side of the ledger, the University of Nebraska is working a similar angle, communicating with students to help find funding from a number of different areas.

“We're more than happy to talk with people about what their options are and what they may be thinking, and we encourage students to compare schools,” said Justin Chase Brown, the Director of Scholarships and Financial Aid at UNL. “We offer great programs, both academically and financially.”

With both private and public universities working hard to find students as much funding as possible, the question remains — which institution ends up cheaper once a diploma is received?

The numbers are fairly close, according to the College Scorecard 2016 via the Department of Education.

On average, graduates from UNL are left with $21,500 in student loan debt. A number Chase Brown is pleased with.

“I think on an average, it's reasonable. But obviously we're going to work as hard as we can to try to get students to borrow less if they need less,” he said. “But there is a point where there's the right amount in order to get students through, for them to pay their bills, and pay what they need to pay.”

Nebraska Wesleyan graduates embark into the job market on average $27,000 in debt, a $5,500 increase over their public counterpart.

But comparatively, Nebraska Wesleyan is able to offer more in the way of financial aid outside of student loans.

“So when a student files a FASFA, I am going to look at academic scholarships, I am going to look at need-based scholarships that have been set aside by the University, and for the best package possible to help narrow that gap,” Ochsner said.

Another factor that plays into the numbers are how quickly a student can graduate.

Ochsner explained part of keeping Nebraska Wesleyan affordable is the schools “four year graduate rate is outstanding. So students can come here for four years, get a degree, and go out and start working.”

This area is also a top priority for public universities, according to Chase Brown.

“We try to encourage students to take 15 credits a semester to help get them through faster, so they can graduate in four years, so that's one of the first things you can do save money,” he said.

The difference between public and private universities is a topic that is brought up often to Les Monroe, the Director of College Planning at EducationQuest in Lincoln.

EducationQuest is a private non-profit organization that provides free services that helps get students to college.

Monroe explained that private colleges typically look “extremely expensive in comparison to our publics,” but private schools can “dig pretty deep into the support of their donors to give away more financial aid dollars than our publics can, because of the public limited resources.”

However, Monroe said that he won’t recommend one school over the other, adding where to attend school is about more than just the price.

“What I advise families to do is never dismiss a college because of price. You don’t know if you can afford them or not until you get through the financial aid process,” Monroe said. “You might have the qualifications for a private school, where they are willing to pay all of your tuition for you. But until you go through the process you don’t know that.”