Uncover the Real Costs of Public and Private Colleges

Both public and private schools offer financial aid, so don't make assumptions about costs.

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When it comes to paying for college, many people make the assumption that private schools are more expensive than public ones—but that's not always the case.

According to a 2011 College Board report, students at four-year private colleges do indeed have the most expensive total cost of attendance: Factoring in tuition, fees, and room and board, the "sticker price" for the 2011-2012 school year at the average private institution was $38,589, while in-state students at public four-year institutions paid just over $17,000.

[Learn why you shouldn't rely on college sticker prices.]

But that $21,000 difference isn't the whole "public vs. private" story. For instance, out-of-state students at public four-year schools fall nearly halfway in between those costs, averaging $29,657 for the 2011-2012 school year.

The upshot is that your dream school, whether public or private, can get pretty expensive. Fortunately, both public and private schools offer scholarship and financial aid opportunities that can get you a four-year college degree for much closer to that $17,000 annual cost.

For public college students, the magic word is often "reciprocity." In a nutshell, institutions that offer tuition reciprocity will let students from selected states pay the in-state tuition rate rather than the out-of-state rate—which could potentially mean major savings.

For instance, the University of Minnesota's reciprocity agreement with my home state of South Dakota amounted to a $5,000 savings every year; with the average graduate carrying somewhere close to $24,000 in debt, that's a huge impact.

[Learn how to qualify for out-of-state tuition breaks.]

If you haven't yet checked with your counselor or future college about reciprocity, don't delay. (Most programs are unique to the college or university system, but you can also take a look at regional organizations such as the Midwestern Higher Education Compact and the Southern Regional Educational Board's Academic Common Market.)

In addition, most institutions also offer scholarships specific to nonresidents; as just one example, the University of Missouri features a list of awards including the $5,500 Mark Twain Nonresident Scholarship, which effectively halves out-of-state tuition. Again, these awards tend to be specific to the school, so before you commit to a school, make sure you familiarize yourself with its financial aid office.

If you're bound for a private college, merit scholarships can also help a great deal. Traditionally, these haven't been the easiest scholarships to find—after all, just about all of the incoming freshmen at colleges as selective as Harvard University or California Institute of Technology could very likely qualify for merit scholarships at many schools.

However, they're being offered more commonly, in part to attract students in an ever more competitive environment, and in part to help reduce the sticker shock of that average $38,000 annual price tag.

[Find out how to land a full-tuition scholarship.]

A blog post on Top-Colleges cites the following example: "The full ride at Albion College in Michigan is over $40K[;] however the school offers merit scholarships as soon as a student is accepted. 90% of Albion student[s] receive some form of merit aid, and at least 1/3 are awarded to student[s] who do not need financial assistance."

Even with this proliferation of merit awards, it's also important to look at the full financial aid calculation at any private school. The bulk of assistance available at private colleges continues to be based on financial need, and that need is calculated differently at nearly every school. (The schools in my organization's Collegiate Partner program, for instance, have all pledged not to include scholarships coming from Scholarship America as part of the student's Expected Financial Contribution, in order to maximize their impact.)

And while there are currently 63 colleges that claim to meet students' full financial need, the mix of grants, loans, and work study funds in those packages can vary widely.

Once again, the best thing you can do is to check with your individual school's financial aid office. Make sure to ask about the availability of merit scholarships; the treatment of private scholarships (like those from your local Rotary or Dollars for Scholars chapter, as well as things like National Merit Scholarships); and the average student debt at graduation.

Once you know those things, you'll be able to figure out your "real" cost of attendance—and, who knows, it might end up being competitive with, or even cheaper than, your local public college.

Matt Konrad has been with Scholarship America since 2005. He is an alumnus of the University of Minnesota and a former scholarship recipient.