"One of the traditional calling cards of a public university has been its affordability. But the decline in state funding has forced public universities to lean far more heavily on tuition revenue. Since 2000, the average net tuition at public four-year institutions -- that is, published tuition and fees less financial aid -- has risen by 136 percent. By contrast, due in large measure to an investment of endowment funds into financial aid, net tuition at private institutions has risen by only 17 percent in the same period. There are now private research universities, such as Harvard and Emory that cost less after financial aid than a number of their public peers."
"Free the Public Universities," By Ronald J. Daniels, President of the Johns Hopkins University
The Chronicle of Higher Education, May 5, 2016
Pop quiz: thinking about an undergraduate degree purely in terms of dollars and cents, what's a better value -a public university or a private nonprofit institution?
It's not a trick question, but neither is the answer an obvious one. What was once clear cut is no longer anything of the kind. There is indeed, as Johns Hopkins' Daniels suggests, a convergence between the economics of private colleges and those of public institutions.
Of course, it's not entirely about the economic return on investment (ROI) -- it's about the quality of the college experience. An institution like mine, Woodbury University in Southern California, offers the intangible but very real benefits of smaller class sizes, frequent and direct contact with professors, an ability to shape an academic career that is increasingly out of reach in the public system, and an innovative environment fed by the creative industries that surrounds it.
But just to throw a few more data points out there, consider:
o The average annual rate of increase of published tuition and fees at private nonprofit four-year institutions declined from 3.5 percent between 1985-86 and 1995-96 to 3 percent between 1995-96 and 2005-06 and to 2.4 percent between 2005-06 and 2015-16. (CollegeBoard; http://trends.collegeboard.org/content/average-rates-growth-published-charges-decade-0)
o Within public education, it's no longer clear what constitutes a four-year institution: "Currently, 54 percent of first-time CSU freshmen finish within six years, including 19 percent who finish within four years, according to the most recent Cal State statistics." (Los Angeles Times, Feb. 22, 2016: http://www.latimes.com/local/education/la-me-csu-bill-20160222-story.html). "In 2009, graduating in even six years was a triumph. Now, [Chancellor Timothy] White said, the six-year graduation rate is 57 percent." (Merced Sun-Star, Jan. 28, 2016: http://www.mercedsunstar.com/opinion/editorials/article57066533.html)
o The "rack rate" at private institutions is less and less what it seems - a signal development for students and their families. In 2007-2008, the percentage of students receiving aid at four-year private nonprofit institutions increased from 86 to 89 percent; at public institutions, the percentage increased from 77 to 83 percent. (NCES; https://nces.ed.gov/fastfacts/display.asp?id=31)
Money does matter. Graduating in four years and getting into the job market immediately has a big impact on ROI. According to Payscale.com, our students make on average $47,100 right out of college, so over a period of six years the net cost after aid (without taking into account the effect of taxes) is an average discounted tuition of about 4 x $30,000 minus 2 x $47,100 in earnings -- or about $26,000. By comparison, the net cost at a public college at, say, $8,000 per year for six years, is $48,000.
In short, we must look at the net cost in order to make an apples-to-apples comparison. Graduating in four years and jump-starting a career -- rather than staying on an extra two years at a public college or university -- could be a real deal.
David Steele-Figueredo is President of Woodbury University in Burbank, Calif.