Yale and Swarthmore top our list for quality and affordability. By Jane Bennett Clark, Senior Editor December 1, 2012 It's probably not the first reason for considering (or aspiring to) a Yale education, but it's compelling nonetheless: Compared with other elite private institutions, the school is relatively cheap. Number one in this year's rankings for best values in private universities, Yale charges an annual sticker price of $52,700. Among our top 20 universities, only Rice University (ranked number two) charges less. But it gets better—lots better. Yale's need-based financial aid package, one of the most generous in the country, knocks down the average price for students with need to $13,786, lower than the average cost of an in-state education. And Yale's definition of need is expansive, extending to families who earn as much as $200,000 a year.SEE OUR SLIDE SHOW: 10 Best Values in Private Universities, 2012-13 As for academic value—well, we're talking Yale, people. More than three-fourths of Yale's incoming freshmen scored over 700 on the math and verbal SATs, putting them at the top of the academic heap. Its five-to-one student-faculty ratio means that Yalies enjoy plenty of face time with some of the top academics in the world. Yale's degree cred? Gold-plated. Alums of Yale's undergraduate and graduate programs include five U.S. presidents. Swarthmore, number one on our 2012–13 list for liberal arts colleges, has a smaller footprint than Yale, but it offers a similarly stellar combination of quality and affordability—Kiplinger's definition of value. This small, Philadelphia-based school is one of the most selective of our top 50 colleges and one of only three (along with Pomona, number two, and Haverford, number ten) that graduate 91% of students within four years. (See our story: How We Rank the Top Private College Values.) Advertisement Swarthmore's intimate setting, eight-to-one student-faculty ratio and hands-on approach ensure that no Swattie gets left behind. "Our classes are very small, and the faculty is very focused on helping students learn," says Rebecca Chopp, Swarthmore's president. "If you don't show up for class, the faculty will call the dean's office, and the dean's office will call your room." Yale and Swarthmore are among 36 schools on our lists that offer no-loan financial aid to students who qualify, a policy initiated by Princeton in 2001. Princeton student borrowers graduate with only $5,330 in average debt, one-fifth the national average and the lowest amount on both lists; students at Williams College (number six) walk away with $8,801 in debt, the second-lowest. Proceeding With Caution A few years ago, running a private college or university was like walking a highwire in a hurricane. Endowments were plummeting, families were clamoring for financial aid, and costs for such expenses as utilities, employee benefits and technology kept going up. Institutions with the biggest endowments fell the furthest: In fiscal year 2009, Yale's endowment dropped a sickening 24.6%, from $22.7 billion to $16 billion. Advertisement So private institutions, including Yale and Swarthmore, slashed administrative costs, postponed maintenance and construction projects, and combined or streamlined programs. "The preference was to keep the curriculum and faculty intact," says David Warren, of the National Association of Independent Colleges and Universities. They also conjured up more money for financial aid and kept tuition increases at an average of about 4.5% a year. The average annual rate of increase in the ten years prior to 2009 was 5.7%. So is the worst over? Maybe, but nobody's breaking out the champagne. Although the U.S. stock market has performed well in calendar 2012, "it's still a fragile and uncertain economy," says Warren. Yale, Harvard and other institutions with major endowments reported returns of 0% to 5% over the 12-month period that ended June 30, 2012, compared with returns of about 20% in the previous fiscal year. Add in unemployment that's stuck at nearly 8%, and colleges have as much reason as ever to curb expenses and rein in costs to families. This year, the average tuition increase for private colleges was 3.9%, the lowest in at least 40 years, and institutional aid—grant money offered out of college coffers—went up 6.2%, according to the NAICU. Another problem looms for college campuses: aging buildings. "The period between 1960 and 1975 was probably the largest building boom in the history of U.S. colleges and universities," says James Kadamus, of Sightlines, which helps colleges manage their facilities. As those buildings turn 50, core systems will start to fail. Expect colleges to devote spare resources to high-impact new construction (especially for academic buildings and new dorms), and take a triage approach to maintenance, he says. "We're facing a future in which we have a few really great buildings surrounded by a crumbling campus." Pursuing the Mission Advertisement In these challenging times, keeping costs down and academic standards high can only be described as God's work—and at some schools, God is doing a pretty good job. Brigham Young University (number 34), led and supported by the Church of Jesus Christ of Latter-day Saints, posts a sticker price of $12,842 for Mormons and $17,552 for non-Mormons, the lowest prices among the top 50 on both lists. Christendom College (number 45), a Catholic-run institution in Front Royal, Va., charges $29,570, the next-lowest. Brigham Young also posts the lowest cost after need-based aid is applied—$7,509 for Mormons and $12,219 for non-Mormons. Ten others on the university side, including Yale, Princeton and Duke (number four), keep the average annual cost after need-based aid below $20,000, as do eight on the liberal arts side, including Pomona and Washington and Lee (number three). Although most elite colleges restrict their financial aid to students with need, a few, including Rice and Vanderbilt (number 13), also extend generous merit aid to a sizable portion of students who don't qualify for need-based aid. At Rice, the average merit award comes to about $16,000; at Vandy, it's a lavish $23,533. Denison University (number 21) and Rhodes College (number 28) each offer merit grants averaging about $16,000 to more than 80% of students who don’t qualify for need-based aid. Looking for the up-and-comers? Check out Colgate University, in Hamilton, N.Y., which rose from number 22 last year on our liberal arts list to number five for 2012–13. Colgate's admission rate—the lower, the more competitive—dropped from 33% to 29% over the previous year; its four- and five-year graduation rates (not only a sign of academic strength but also an indication of how much families end up paying) jumped from 84% and 87%, respectively, to 88% and 91%. Advertisement Such stars appear throughout our lists. But when it comes to delivering a broad-based, liberal arts education, we give every college and university credit. "While it's true that there is criticism about higher education and more focus on vocational preparation, the irony is that around the world, more countries and universities are looking at the liberal arts because they are interested in innovation and freedom," says Chopp. As purveyors of a liberal arts education, she says, "we specialize in creating the ability to think critically, rigorously and creatively. We teach students the skills to be leaders in a democracy." This article first appeared in Kiplinger's Personal Finance magazine. For more help with your personal finances and investments, please subscribe to the magazine. It might be the best investment you ever make.