This is not gospel (I can't point to any hard facts); what I have noted is that good private schools will create an aid package that will reduce the cost of attendance to what your "in state cost" would be at your state university (for qualified students). In our case, our son's cost to attend a private university in Texas was equal to what we would have had to pay at the University of California (including any grants that he would have received in-state). Private universities need to stay competitive to attract qualified students.