The main way we categorize colleges as public or private is their funding. Public colleges are funded by their state governments. Private colleges are funded by "endowments"—private contributions from alumni and other donors.

Public vs. Private Colleges: What to Consider

State residents have an admission advantage at public colleges. Since state residents pay taxes to support their public colleges, those colleges give admission priority to in-state applicants. At highly selective state universities, however, state residents compete with many other highly qualified applicants from in-state and out-of-state.

Both types of colleges can be diverse. Many private colleges attract students from a broad geographic spectrum, including international. Students at public colleges tend to be in-state or from nearby states, but may come from many heritages and backgrounds.

It may take longer to graduate from a public college. At many public colleges, it can be difficult for students to get into the classes required for their major. If this is the case, savings from lower tuition may evaporate. On average, private colleges show higher four-year graduation rates.

Either type can be affordable—or expensive. Private colleges frequently offer scholarships and grants that significantly cut their actual cost, even bringing it close to the cost of a public college. On the other hand, out-of-state students attending public colleges pay much higher tuition. For them, the cost of a public college is on a par with the cost of private colleges.

Either type can be prestigious. Many private colleges are considered highly prestigious. And so are some public universities. If you are set on getting a graduate degree, consider a lower-cost undergraduate degree at a public college and attending a more well-known college for your advanced degree.

Either type can be small or large. It's true that private colleges tend to be smaller, incur less red tape, and offer more personal attention than public colleges. But it is entirely possible to find small public colleges and large private universities. If you want the resources of a large university with a small-scale atmosphere, look for universities with honors colleges.

Which Is Best for You?

Once you have considered how well a college meets your needs, whether it is private or public might make a difference—or not. The academic resources and school spirit of a large public university might be tempting. Or the personality and location of a private college might be right for you. What is most important is choosing the college that meets your highest priorities at an affordable cost.