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Are State Schools Cheaper?

July 30, 2018

Are state schools cheaper than private colleges? Is a state school more affordable? The answer is…maybe.


Many college-bound students are under the impression that state schools (aka public colleges and universities) will always be cheaper than private colleges. The real story, however, is a bit more complicated—and very personal. Let’s look into the cost differences between public and private colleges, as well as in-state versus out-of-state tuition at public colleges, and determine which option is more affordable for you.

How Do Public and Private Colleges Determine the Cost of Attendance?

Public colleges are nonprofit institutions that receive money from their state governments each year, including allocations specifically for financial aid packages. Since state taxpayer dollars help contribute to keeping public colleges up and running, in-state students (e.g., those whose families directly subsidize the school via state taxes) get in-state tuition at a lower cost. This incentive encourages local students to stay in state for college—and, by extension, to remain after graduation and continue to contribute as an employed taxpayer.


Private colleges (both nonprofit and for-profit) determine their cost of attendance based on their endowment, fundraising, and tuition and fee adjustments. Residency does not typically influence financial aid determinations at private colleges.  

If I Apply as an Out-of-State Student, Will a State School Still Be Cheap?

For in-state students, public colleges will nearly always have a cheaper sticker price than private colleges, but net prices may work out differently. But if you apply to a state university as an out-of-state student, you may find the state school to be just as expensive as a private college.


For example, take a look at the differing sticker prices at public universities around the country:

 

Public University In-State Cost of Attendance Out-of-State Cost of Attendance
Ohio State University $26,947 $46,051
University of Alabama $26,074 $43,394
University of New Mexico $21,844 $36,735
University of Oregon $27,502 $50,542
University of Vermont $33,274 $56,890

*Source: Collegedata.com


Some of those out-of-state costs rival sticker prices at private colleges around the country!


So we see that sticker prices can be dramatically different at public state schools, depending on whether you’re an in-state student or out-of-state student. But on a more important measurement—net price—your residency status even trickles down to the level of financial aid you may receive.


Edmit co-founder Sabrina Manville notes a common misconception among students and parents is the expectation that out-of-state students will get generous financial aid packages from any state school, simply because the college is public. “State schools out of state cost as much as private colleges, and have fewer scholarships,” she notes. (To get more personalized estimates for your specific circumstances, compare public and private colleges that interest you with the Edmit college comparison tool.)


Those fewer scholarships at public colleges aren’t necessarily a reflection of the student’s profile, either: Shrinking state budgets following the 2008 recession have made many public colleges more tuition dependent, resulting in tuition hikes and less money available for affordability initiatives such as tuition discounts, scholarships, and the like. So between the tuition increases and smaller pool of government aid to draw from, public colleges may not necessarily be the most cost-effective option.  

How Can I Pay In-State Tuition as an Out-of-State Student?

If you have your heart set on a state school where you’d be paying out-of-state tuition, don’t despair completely. There may be programs available where you can take advantage of in-state tuition, even as an out-of-state student. According to Kiplinger and the Chicago Tribune, regional consortiums, student exchange programs, reciprocity initiatives, and individual school policies may make a public college more affordable for out-of-state students. Because many programs are limited in scope and have varying deadlines to apply, speak to your high school guidance counselor or the financial aid office at the state university that interests you to see what you may qualify for, and the application requirements for in-state tuition consideration.


Remember, the cost of college will be specific to you and your circumstances. To determine how much free money you’ll receive, individual schools will be looking at your expected family contribution, academic background, SAT and ACT test scores, demographics, and interests, along with their own pool of financial aid money to draw from and student body enrollment/admissions goals. As a cost-conscious aspiring college student, the key takeaways are to do your research, evaluate all options, and not assume a state school will always the better deal.