Costs of Public vs. Private College

Since 2008, Michael Berlau has served as a college solutions specialist with College Funding and Planning in Overland Park, Kansas. In this role, Michael Berlau helps families to identify resources that can reduce the out-of-pocket cost of a college education.

One of the main differences between public and private colleges is the source from which each institution draws its funding. Public universities often receive government funding, which subsidizes costs such as faculty salaries and results in lower tuition. Private institutions rely entirely on donations and tuition to cover costs, which means that students tend to pay higher fees.

A 2011 College Board report revealed that in-state students at a public institution paid slightly more than $17,000. The cost for out-of-state students at the same schools hovered around $24,000, while total tuition and fees for private university students totaled more than $38,500.

There are, however, a number of factors that help to close this gap. Some public universities offer tuition reciprocity, meaning that students from certain states can pay the in-state rate for those institutions. Meanwhile, at private institutions, grants and scholarships mean that approximately 42 to 48 percent of students pay only about half the total price of the college.

Options for Student Loan Forgiveness

Michael Berlau owns and operates College Funding and Planning, an organization that helps families understand how to pay for secondary education. A dedicated advocate for his clients, Michael Berlau offers insights into potential student loan forgiveness programs.

Although half of current college students believe that they can secure forgiveness for their student loans, a student must meet certain criteria for this to happen. One option is available under the Public Service Loan Forgiveness Program, which is obtainable by those who work full-time for the government or a nonprofit organization for a full decade. Available to such professionals as law enforcement personnel, public health workers, and early childhood educators, it becomes an option after the candidate's 120th student loan payment.

Direct and Stafford loans also offer a dedicated loan forgiveness plan for teachers. Such plans forgive up to $17,500 for professional educators who work in low-income public schools for five years or more. However, those with larger loan balances or who intend to work in a qualifying school for 15 years or more may benefit more from applying for Public Service Loan Forgiveness. 

For individuals in other fields, particularly those whose compensation packages make it difficult to repay student loan balances, income-driven repayment plans may offer alternative forgiveness options. Although these may charge higher interest rates than a traditional repayment plan, they adjust payments based on the candidate's ability to pay. They also repay remaining balances after 20 to 25 years, though this forgiveness is subject to income tax.