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The best values in private colleges

Despite shrinking endowments, these colleges and universities deliver affordable, high-quality educations. For some students, they're cheaper than state schools.

By Kiplinger's Personal Finance Magazine

A year or so ago, a host of wealthy private institutions looked deep into their endowments and offered to share more of the wealth with their students. They beefed up financial aid, including replacing loans with grants for students who qualify, and expanding aid to families with higher incomes.

Now, with the economy reeling, colleges across the board face shrinking bank balances and the same out-of-sight costs for utilities, construction and staff benefits that have helped keep tuition increases outpacing inflation for the past decade. Not surprisingly, schools with the biggest endowments are among the hardest hit.

Will those circumstances affect your ability to cover the college bills? If you expect to receive significant financial aid, probably not, says David Warren, the president of the National Association of Independent Colleges and Universities. Colleges with minimal endowments -- the vast majority -- continue to offer aid through a mix of loans, work-study programs and grants funded by gifts. Billion-dollar-plus institutions have enough left in their coffers to make good on last year's promises.

Parents who pay most or all of the sticker prices, however, will continue to feel the pain. The average cost of a year at a private school runs $34,132, up 5.6% over 2007-08, according to the College Board. Next year's price could reflect a jump of 6% or more.

Confronted by high costs and tight credit, more families will likely turn to their state universities, where the average cost comes in at $14,333. Says Warren, "The decision goes to the rudimentary question: What will your out-of-pocket expenses be?"

Meanwhile, colleges both rich and not so rich are cutting outlays to keep operations running and financial aid flowing to families hit by the economic downturn. You can expect many schools to freeze construction projects, leave staff vacancies open and hit up donors to help families cover the higher costs, says Warren. "Nobody pretends it's easy, but it is the way to make more money available for student aid and protect the core of the institution, which is academics."

Top educations, generous aid

To find colleges that deliver the goods during tough times, look to Kiplinger's 100 best values in private colleges and universities for 2008-09. These institutions, led by Pomona College among liberal-arts colleges and the California Institute of Technology among universities, provide a top-quality education at an affordable price, usually with generous financial aid.

If you earn too much to qualify for need-based aid -- and remember, that's a good thing -- you can still find great deals within our rankings. Many of the institutions on the list offer hefty scholarships to a few outstanding students or smaller merit awards to a bigger pool. Emory, ranked No. 9 among universities, provides a full ride, including room and board, to 86 students and covers from two-thirds to full tuition for an additional 131 students, out of a total enrollment of 6,700. Davidson (ranked No. 4 among liberal-arts colleges) bestows $2,000 toward the cost of attendance on 20% of each incoming class.

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Unexpected college expenses
Tuition is just the beginning. Who pays for books, fraternity dues, the cell phone and the rest?

Private colleges

No. 1: Pomona

All rise for Pomona College. Its selective admissions, high standardized-test scores among incoming freshmen and low student-faculty ratio, plus a financial-aid policy that knocks almost two-thirds off its sticker price, moves it from No. 5 last year to the top of our 2008-09 list of private liberal-arts colleges.

Pomona not only places first among liberal-arts colleges for its selectivity, it also comes in with a near-perfect 99% for freshman retention. Blessed with a sun-drenched campus scented by eucalyptus, studded with palm trees and framed by the San Gabriel Mountains, Pomona gives freshmen -- and everyone else -- good reason to stick around.

Continued: Find out what school's No. 2

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