This is an excerpt from Best Values in Private Colleges in the January 2004 issue of Kiplinger's Personal Finance. See the magazine for more on the top 100 values and how to land a healthy financial aid package.
COLLEGE 100 Best Private College Values by Brian Knestout
Okay, it's not really stop-the-presses news that private colleges cost an arm and a leg. And it's no surprise that prices keep going up -- about 6% for the 2003 school year, on average, says the College Board.
But there is a hopeful development: Thanks to a little-noticed trend in financial aid, most students at private colleges do not actually pay the full four-year fare.
Colleges have always tried to help needy students. But more are offering "need blind" aid: merit-based tuition discounts that take the form of grants and scholarships, are based on a student's academic record or character, and are funded by endowments.
In November, we looked at the best deals for in- and out-of-state students at the nation's public colleges and universities. Now, we've put more than 1,300 private schools under our microscope to determine which combine academic excellence with generous aid packages and lower total costs.
Widespread discounting
The most recent study by the National Association of College and University Business Officers (NACUBO) shows that private schools used both need-based and non-need-based aid to slash their sticker prices in 2002 by an average of 39%. That compares to a 27% discount in 1990. More than 80% of all students received some aid (both need and non-need) in 2002, up from 63% in 1990.
Let those numbers sink in for a moment. More than four-fifths of students at private colleges get some help paying the bills, and, on average, the real out-of-pocket cost is about 61% of the sticker price. (Need-based financial aid consists of grants, loans and work-study jobs designed to fill the gap between a school's cost and the amount that standardized formulas suggest a family ought to be able to afford.)
In general, small colleges that charge relatively low tuitions (those with fewer than 850 incoming students in an average freshman class and that cost less than $21,000 a year) offer the biggest discounts -- 42% overall, according to NACUBO. Small schools with higher costs were next, at 39%. Yet the trend is substantial even at larger colleges, which offer average discounts of 31%.
One big reason colleges discount their fees is that it helps them attract a more diverse and talented student body, and that can bolster a college's reputation.
Quality, cost, value
Students don't have to be wunderkinds to benefit from the trend toward more generous merit aid. That's particularly true at super schools that don't rise to the top of the elite list. Smaller, not quite top-tier schools are the most likely places to offer merit aid. They compete with bigger schools for the same bright students, and they may be more generous to get them.
How can you track down such schools? That's where our database can help. Finding the right college is a uniquely personal decision that no list of college statistics can make for you or your child. But our list is a good place to begin narrowing the field. It covers colleges in 29 states and the District of Columbia, ranging from the 67-student Webb Institute, in Glen Cove, N.Y., to the 29,000-strong Brigham Young University, in Provo, Utah.
We used the same methodology we applied to our survey of public colleges to determine the rankings -- with a few twists.
The 100 finalists were ranked on a combination of quality and cost components. We looked at total cost (tuition, mandatory fees, room and board, and estimated expenses for books and supplies), the average cost for a student with need after subtracting need-based grants (but not loans), the average cost for a student without need after subtracting merit grants, the percentage of all financial aid that comes from grants and the average debt accumulated before graduation.
We include two figures in our database that are not used in scoring. The first is the percentage of need met. Note that only 15 schools meet less than 90% of need. The second is the percentage of students receiving non-need-based aid. Unfortunately, these numbers can be misleading, because reported figures can include noninstitutional grants. Thus, a student who receives four scholarships from hometown sources, for example, could be counted as four students for purposes of this percentage. Still, the figure is important because it provides a rough guide to which schools offer non-need-based aid (elite institutions such as Harvard, Yale, Princeton and MIT, for instance, don't offer merit scholarships at all).
Overall, our scoring places greater weight on quality -- which accounts for about two-thirds of the final score -- than on cost. The reason is simple: A good value isn't necessarily the college that charges the lowest price.
GETTING STARTED
