Welcome! The other day, we received a question on colleges, specifically the different types of colleges available.
The important thing to note is that not all colleges and universities are the same. That leads to the first discussion:
Part 1: What is the difference between colleges and universities?
Simply put, not much. Many assume there is a difference in size or offerings, but that’s not quite it.
While there is no official definitional difference, the easiest way to distinguish them is as follows:
Colleges tends to focus on undergraduate study and programs, with little to no emphasis on graduate study
Universities tend to focus on both undergraduate and graduate study
Some universities have colleges within them to distinguish a particular program (e.g., College of Nursing). Otherwise, the two, particularly in the US, can be used interchangeably.
Within the college and university landscape, there are a few categories to distinguish the basics of college and university:
Profit vs. Non-Profit
Public vs. Private
Part 2: Profit vs. Non-Profit
Colleges and universities can be defined as either non-profit or profit colleges.
The best way to think of the difference is to imagine what happens with the surplus a given school has. For simplicity’s sake:
College A has $100 in revenue and $50 in costs
College A has a “surplus” of $50
For a non-profit college, College A would have to reinvest the $50 back into the college (e.g., hire teachers, develop new curriculum, develop new student services)
If College A were a profit college, however, the college would have the opportunity distribute that same $50 to investors, or reinvest it back into the college.
While there is nothing inherently wrong with either model, it is important to know the pros and cons associated with each model:
This leads us to another dichotomy: public vs. private colleges
Part 3: Public vs. Private
When colleges and universities are described, they are often thought of as public or private institutions. The best way to think of the differences is as follows:
Funding:
Public institutions are funded predominately by the government.
Private institutions are generally funded by endowment, tuition, fees, and alumni donations.
This does not mean that public universities do not have endowment, tuition or alumni donations. It just means that public university operations are largely funded by the government and do not rely on those other funding sources in the same way.
Cost of Attendance:
Because public universities are funded by the government, they tend to be less expensive than their private counterparts. They do not need to rely on tuition, so they can afford to offer in-state students a subsidized education as a public benefit.
This is typically the reason why out-of-state students will pay more than in-state students to attend a public college - the state has no reason to subsidize the cost of an out-of-state student in the same way.
Private colleges tend to be more expensive because they have to rely on the cost of tuition to meet college costs and obligations.
College Offerings:
This depends heavily on the college or university, but public universities tend to have more diverse college offerings than their private counterparts.
Part of this has to do with size: many public universities have large undergraduate student bodies and therefore many majors to meet them. The other reason is just out of the public interest - it is advantageous for a college or university to have more majors to appeal to more students in a public setting.
Private colleges tend to have fewer majors. That’s not necessarily a bad thing. Some private colleges are more specialized and a better fit for students that already have their career focus.
Financial Aid:
Both public and private colleges offer financial aid, but private colleges tend to offer more grants and scholarships because they tend to have larger endowments to meet costs.
Both are eligible for federal financial aid though.
Conclusion:
Understanding the different types of colleges and universities is key to knowing what school is the right school for you.
For instance - do you value flexibility and career paths over a traditional “college experience?” If so, an online, for profit program may be a better fit for you.
If instead you want to minimize cost and attend a college with a great division 1 football program, a nonprofit public university may be the right fit.