Public or Private College – That is the Question

By KATHLEEN LYNN

Tim Watters’ son, the eldest of four children, is a high school junior ready to start touring colleges. And that has brought the family face-to-face with the question: Public or private?

A lot of money is riding on the answer. Including tuition, room and board, New Jersey state schools cost about $18,000 a year, while private colleges can run $40,000-plus.

“The colleges don’t want you to think economically, but you have to think economically,” says Watters, a Ramsey financial planner who often advises young college grads struggling under massive student debt.

Watters called me recently to see if I knew of any research on what benefits (if any) students get in exchange for a private school tuition.

Before I get into that, however, full disclosure: I graduated from a state university, where I feel I got an excellent education, and my son is a freshman at my alma mater. (As it happens, Watters is also a grad of a state university.)

According to the College Board, about 75 percent of students attend public colleges.

While my experience shows I’m a big believer in public colleges, I recognize that the question is a bit complicated. For one thing, there’s no one-size-fits-all in college; different students will thrive in different places. A lot of factors go into this decision, including where a student gets accepted and how close she wants to be to home.

And there is no such thing as a typical public college or a typical private college. In either category, you can find big or small; selective or not; high quality or low. You could never make a blanket statement that private schools are better than public – because we all know of selective public schools (think University of Virginia) that offer a better education than most private ones.

Many parents feel that private schools will offer small classes and more personal attention, but there are also public schools that offer both.

And though public schools can be a great bargain, you can’t even say that they’re always less expensive than private. Many private schools offer a lot of financial aid, especially to good students or low-income students. Sometimes it’s enough to make their costs competitive with, or better than, those of a state college.

What about the student’s future earning power? The research on college choice and later earnings doesn’t seem to address the question of public vs. private – but it does look into the issue of whether it’s worthwhile to attend the most selective college you can.

It’s true that graduates of the nation’s most selective schools earn more than other college grads. But is that because Yale gave them a better education and better connections – or because the people who were smart and hard-working enough to get into Yale are smart and hardworking enough to prosper on the job?

Princeton University economist Alan B. Krueger, along with researcher Stacy Berg Dale, studied this question in 1999 by looking at students who got into selective schools – but chose less selective ones.

The researchers found that, 15 years later, the bright kids who went to the less selective colleges were earning as much as the equally bright kids who went to the more selective colleges. For these hardworking achievers, the State U. degree paid off as well as the Ivy degree they might have had.

(Actually, where you go to school probably has less effect on your future earnings than your major. According to the National Association of Colleges and Employers, chemical and electrical engineering majors can expect average starting salaries above $50,000 this year, while liberal arts majors can expect about $29,000.)

Students who have the grades and flexibility to be able to choose should look at both public and private colleges. If the kid likes the private school, the school may provide enough aid to make it affordable.

And even if parents start out thinking a state university is too big, they may find that the teen likes the idea of a bustling place with a lot of activities and class offerings (and potential boyfriends and girlfriends).

In any case, it’s important to be absolutely honest about what the family can afford. There’s nothing wrong with saying, for example, “We can pay the full cost of Rutgers. If you want to go to a private school, you’ll have to make up the rest with scholarships, loans and jobs.” (In fact, Watters has told his children how much the family can contribute to their education.)

Better to be blunt than to pretend that you’ll manage – somehow – to get the kid through four years at a college you really can’t afford. That only leads to trouble. You don’t want hard feelings when the truth comes out at high school graduation and the teen has to give up her expensive dream school.

And you don’t want her graduating college with tens of thousands of dollars in student debt that could have been avoided.

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Kathleen Lynn’s column appears Wednesdays. E-mail: lynn@northjersey.com