The old saying everything is negotiable isn’t always true, but don’t assume the publicly advertised price tag for a college education is the amount students will pay. In fact, while the sticker price provides the base price for tuition and fees, it is important to know that the net price for a private college degree often is much lower after factoring in grants and scholarships.  

In these days of a pandemic, students and their families are even more concerned about the cost of attending college and the value of a degree. For 79% of the 2020-21 first-year class, cost was the most important factor in deciding where they would attend school, according to a survey of roughly 10,000 students by Hobsons. For more than 59%, financial aid and scholarships also are top factors, according to the data.  

There are tools to help families get beyond the sticker price. Through the College Affordability and Transparency Center, families can research the cost of attending the most expensive and least expensive schools based on tuition and net priceThe federal government requires schools to provide a Net Price Calculator on their websites 

On average, private, nonprofit four-year school students receive more grant aid (federal, state or institutional) than students at public colleges and universities, according to the College Board. The average grant aid per student for the 2020-21 school year at four-year publics was $7,330; at private, nonprofit four-year schools the average was $21,660The amount of grant aid can vary widely based on a student’s or family’s financial situation as well as the student’s academic achievements, but in some cases the net price for a private school may be lower than that of a state university. 

In this Covid 19-era, many families faced unexpected economic hardship due to job losses or business closures. Faced with the sudden inability to pay tuition, many private colleges responded to appeals by bolstering grants. 

For example, a mid-sized liberal arts college in New England that is a member of our Plan has received a sharply higher number of appeals from families. The school set aside an additional $2 million to fund Covid-related financial aid appeals. It has already allocated more than half of that. In addition, it has distributed $1 million to students that the school received from last spring’s federal CARES Act. 

Beyond $$$ 

But cost shouldn’t be the only consideration when deciding where to apply to college or which offers to accept. Graduation rates and the value of a degree are often overlooked by students considering multiple colleges, but they can be incredibly important measures of a school’s quality and cost. 

About61% of first-time, full-time public college students earn a bachelor’s degree in six years. Graduation rates tend to be higher among private four-year schools at 67% on average. The comparable rates for four-year graduations are 33% and 53%. The schools with graduation rates of 90% and higher tend to be private colleges with household-namesPrincetonMIT, Stanford, and University of Chicago. 

The value of a degree is often equated to earning power, and the evidence is overwhelming. Bachelor’s degree holders are half as likely to be unemployed as their peers who only have a high school diploma, and they make $1 million in additional earnings on average over their lifetime. Holding a degree from a private university versus a ranked public university can boost potential earnings even higher — up to 10%, according to a report from Georgetown University Center on Education and the Workforce.   

College and university campuses, public and private, have taken great efforts this academic year to offer students a quality education, whether in-person, online, or hybrid. For those holding classes in person, helping and encouraging students to maintain safe, social distancing was a high priority. Private colleges, with their traditionally smaller class sizes have greater opportunities to enable social distancing. 

Worth Saving For 

In the end, saving for a college education before a child starts thinking about where they’d like to attend, and how to manage the price tag, is the best financial decision a family can makeOne way to do that is through a traditional or prepaid 529 plan. Traditional 529 plans are managed by 49 states and the District of Columbia, providing families with many plans from which to choose. There are fewer prepaid 529 plan providers, though there are options available for state and private colleges and universities, and those plans are not affected by the stock market as traditional plans can be. 

As we know from 2020, predicting how our finances might be impacted by the rise and fall of the markets, our economywildfires, tropical storms and, well, even a pandemic, is risky at best.  


Bob Cole is president of Private College 529 Plan. This post is adapted from an article he published in Forbes in March 2021.  

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