Private Colleges Worth the Price - ranking

Kiplinger's Personal Finance Magazine, Sept, 1999 by Kristin Davis

When is a prestigious school a great value? When it's affordable, too.

What?! A college survey that doesn't put Harvard, Princeton and Yale at the head of the list? Welcome to Kiplinger's first review of private universities, where to make the cut a school must pass both academic and financial tests.

Last September, we highlighted public colleges and universities that provide top-quality education at an affordable cost. This year, we looked for gems among the nation's 1,600 private schools, once again putting ourselves in the shoes of parents who want excellence for their children but who also care how much it costs.

Perched at the top of our list of 100 great values: Rice University, in Houston. The Owls can boast a high-caliber student body, top-notch faculty, small classes and sky-high graduation rates (see the table beginning on page 100). Ivy League schools can claim the same attractions, of course, but here's the clincher: A year at Rice cost about a third less last year, at $21,500 for tuition, fees, room and board. And Rice guarantees freshmen that their tuition in the future will rise no faster than the rate of inflation: This year's seniors pay $13,200 in tuition, instead of the $15,350 charged entering freshmen.

It gets even better. More than a third of students received a merit scholarship from Rice last year (for academic achievement, musical talent or leadership ability, for instance). For them, the average annual cost was about $18,000. The school also awarded $6.3 million in need-based scholarships (plus a couple of million in loans and work-study opportunities). The average student with financial need paid just $5,456 per year out of pocket and owed a little more than $12,000 in education loans at graduation--significantly below the 1998-99 average of $16,000 for all the private colleges in our survey.

How does Rice do it? A $2.8-billion endowment helps the university meet its goal of graduating students "without a crushing burden of debt," says Dean Currie, vice-president for finance and administration.

The financial incentive is only part of what attracted Lillian Ortiz, a senior majoring in political science. She was also drawn to the small student body--fewer than 3,000 undergraduates--and low student-faculty ratio. "Professors know your name," she says.

Ortiz, a native of Odessa, Tex., chose Rice in part because "it's the best school in the region," but also because "the price is a lot cheaper than the others I was considering," all Ivy League names. Though she'll have loans to repay, a need-based financial-aid package keeps her annual out-of-pocket expenses to about $1,000.

HOW WE RANKED THE SCHOOLS

Rather than analyze all 1,600 private schools, we did what you would do in your own hunt: narrowed the field. We started with the 400 or so schools that good students would be most likely to consider--those defined as "competitive" by Peterson's, the Princeton, N.J., publisher of college guides (Peterson's supplied the raw data for our survey but did not participate in ranking the schools).

From that universe, we dropped public schools and specialty colleges, such as those that award degrees strictly in fine arts or health sciences. Then we applied our own measures of academic quality to trim the list to approximately 150 standout schools. To arrive at our final 100, we factored in financial data--not only the "sticker price" but also the likelihood of receiving assistance, and how much. Overall, quality measures counted twice as heavily as financial data.

IT'S ACADEMIC. In making our first cut, based on quality, we looked at selectivity (26% of our quality formula)--that is, whether the school attracts top students (judging by entrance-exam scores), and whether its admission rate reveals high demand for spaces in the freshman class.

We also considered student outcomes (24%), such as the percentage of freshmen returning for sophomore year, the percentage that graduates within four and six years, and how many go on to graduate school.

Next we weighed what the schools offer students (38%). To assess the quality of instruction, we considered the ratio of students to teaching faculty, the percentage of faculty members with the highest degree in their field, the amount spent per student on instruction, and whether any undergraduate classes are taught by graduate students. We also examined each institution's financial resources and facilities, including its total endowment, the amount it spends on its libraries, the number of computers available to students, and whether students have computer and campuswide network access from their dormitories.

COST CONSIDERATIONS. Each of the schools that made that cut was then ranked based on a combination of the quality criteria outlined above and the school's cost--to students paying full freight (33%) as well as to those receiving need-based (33%) or merit-based (33%) financial aid. For consistency, we used 1998-99 cost figures when ranking the schools, but in the tables, we have replaced those numbers with tuition, fees, and room-and-board costs for 1999-2000.