How to Afford a Private University: Tips for Reducing Tuition Costs

The award for the most expensive college in the U.S. goes to the University of Chicago, with a total cost of $93,633 for one year. And you probably wouldn’t be surprised to find that it’s a private college. Private universities are known for their shocking sticker prices, but what you may not know is that students seldom pay the full cost. For instance, the average scholarship and financial aid package for first-year students at the University of Chicago is $67,505. The school also provides free tuition to any student who is the first in their family to attend college or students whose families make less than $125,000 per year, making the most expensive college in the U.S. more affordable than some public schools. One of the biggest reasons that public colleges are more expensive than their public counterparts is funding. State governments fund public colleges, whereas private institutions depend on student tuition, endowments, and alumni donations to pay operational costs. Essentially, when you pay for your private education, you’re also investing in the school you’re attending. At the same time, alumni donations and multimillion dollar endowments enable private schools to be a more affordable option for students.

Financial Aid Options for Students Attending a Private University

Attending a private university may require you to research creative ways to pay for college, but what you’ll find is that there are many resources available. Affording a private college education is easier than you think.

Scholarships

Scholarships are free money that students receive to pay for college. Unlike student loans, they do not have to be paid back. Fortunately, private colleges and a variety of other organizations are known for providing generous scholarship packages. • National scholarships: There are many prestigious national scholarship programs that help to make a private college education more affordable. These are well-known awards, like the Coca-Cola Scholars, DoD SMART Scholarship Program, and the National Merit Scholarship Program, to name a few. • Merit Scholarships: Many private colleges and universities offer generous merit aid packages when they admit you. These merit scholarships are awarded based on your academic performance, extracurricular involvement, and more. Essentially, if your admissions application is great, you can expect a good merit aid package. • School-specific scholarships: If you’re attending a larger university with different “schools,” you may qualify for scholarships within that school or department. As you’re visiting colleges and chatting with admissions officers, these are opportunities that you need to ask about. • Need-based scholarships: Finally, many schools and private organizations offer generous scholarships for students who demonstrate financial need. These include opportunities like The Gates Foundation Scholarship, the Jack Kent Cooke Foundation Scholarship Program, and the QuestBridge National Scholarship Match Program. Ask your school counselor about need-based scholarships – or create a free profile on Fastweb, and we’ll match you to relevant financial need scholarships.

Grants

Like scholarships, grants do not have to be paid back. Generally, grants are awarded to low-income students, and the only way to qualify is to fill out the FAFSA (Free Application for Federal Student Aid). • Pell Grants: These grants are distributed by the federal government, and the amount received depends on how much financial need you exhibit based on the information you provide on the FAFSA. The maximum amount you can receive per year is $7,395, and around 30 – 40% of undergraduate students receive some sort of Pell Grant funding. • State grants: Each state also has grant funding to help their residents pay for college. Again, to be considered for these grants, you must complete the FASFA. • School-specific grants: Schools can also distribute grant aid to students. To qualify, students must submit the FAFSA, and they may also be required to fill out a supplemental financial aid form from the school. These forms generally ask more detailed questions and provide a clearer picture of a student’s financial situation.

Work Study Programs

Work-study is a form of financial aid that enables students to work part-time, typically on campus, to earn money toward their college tuition, room and board, or student living costs. Like most forms of financial aid, students must complete the FAFSA to qualify for work-study programs on campus. These jobs are typically low-stress, low-time commitment opportunities, like helping to mail brochures in the admissions office, shelving library books, or working at the front desks of different campus buildings and departments. Because of the low stakes involved, students can easily balance their class schedule and study time with their part-time, on-campus job. Once all work-study jobs have been allotted to qualifying students, there may be other roles left over. Campuses may give these to students who do not technically qualify for work-study but want to earn money to help cover some of their student expenses.

University Specific Financial Aid

Private universities also offer their own forms of financial aid. These are oftentimes grants for need-based students. As mentioned above, your school will require that you complete the FAFSA to be eligible for their need-based financial aid programs. They may also need you to fill out a supplemental financial aid form that is specific to their university.

Federal and Private Loans for Private Universities

In addition to grants and work-study, students can afford a private university with federal and private loans. Like any federal aid program, students must submit the FAFSA to be eligible. Federal student loans come in two forms: subsidized and unsubsidized. Subsidized loans have the interest paid by the government while the student is enrolled. These are typically for financially needy students. Anyone can qualify for an unsubsidized student loan if they complete the FAFSA. For these particular federal loans, the interest that accumulates while the student is enrolled must be paid by the student once the repayment period begins. This interest is spread out over the life of the repayment period. Eligibility for private student loans does not depend on financial neediness. Anyone can take out a private student loan. You can find a private student loan lender by asking your private college for their preferred lender list – or you can check out private student loan options on Fastweb. When determining how much to borrow, never take out more than your expected annual salary after graduation. Once you graduate, you may need to find a repayment plan that works for your budget, like an income-based repayment plan that configures your payments once you know your salary. If you plan to serve in a public service field, like teaching or public safety, for instance, you may qualify for public service loan forgiveness. This loan forgiveness requires that you work in the field for 10 years, while making consistent, on-time loan payments. Once you’ve made payments for 10 years, the remaining loan balance is forgiven.

Budgeting for Private University Costs

Just like with any college experience, there may be hidden costs to attending. Colleges try to be as transparent as possible through their net price calculators. These consider tuition, room and board, fees, and supplies. However, they can’t figure in transportation, health insurance, or other student expenses. For one, transportation costs differ on a student-by-student basis. One student may commute to campus each day, while another may fly across the country to attend the college of their choice. Living off campus may require that you buy your own groceries, cleaning supplies, and late-night takeout, whereas living on campus allows students to utilize the meal plan at all hours and depend on cleaning crews to keep common areas clean. The Department of Education provides several resources to help students consider and budget for those miscellaneous student expenses. Ultimately, however, the amount you spend on hidden costs will not differ drastically between a public, in-state school and a private college.

Attending a Private University Doesn’t Have to Break the Bank

When it’s time to apply for college, don’t shy away from private colleges and universities because of the sticker price. Most students do not pay that. Instead, send strong college applications, submit the FAFSA, and apply for other school-specific scholarships and financial aid programs. Also, look for creative ways to pay for your education, like federal financial aid, work-study, part-time jobs off-campus, and finally, student loans. Use your scholarship and financial aid packages at these private schools to compare costs to public, in-state universities. You may be surprised to find that a private college is just as affordable as a public university.