No longer must families wait until their student is accepted to learn about their “real” price of attending that college or university – the price after all sources of aid are considered. With the new transparency in education, families will have access to net price information long before they send out applications. Perhaps even before they decide upon a campus visit.
The federal government requires undergraduate institutions to offer college price calculators on their websites (also called net price calculators) to give students an estimated cost of attending their college — a sort of Expedia or Carfax of higher education.
Given that the price of attending college often equals the cost of buying a new car every year, this makes sense. People are concerned about borrowing heavily for higher education and more likely now to consider net price as a major factor when deciding among various colleges.
The manner of arriving at the net price of a college for a student, after taking into account all scholarships, grants, work study, and loans can be the most frustrating aspects of the admissions process. Some colleges have been posting net price calculators or “estimators” for several years, and the federal government also has provided a template.
How good are these various price calculators? How do they compare? It’s important that the information used in these calculations be up-to-date and factor in a student’s unique financial and academic circumstances. The federal net price calculator template is a model and understandably must take a “one size fits all” approach to aid-awarding criteria across all institutions. However, standards and packages vary with each college.
The biggest plus and major drawback of the federal template is that it asks only eight questions to determine a student’s dependency status, expected family contribution and price of attendance. Key questions about family assets and income exclusions are not asked, nor does it consider merit-aid criteria.
College price calculators built on the federal template show net price, but don’t calculate up-front, out-of-pocket costs, which means students won’t see how loans and work-study could reduce their net price.
Some college and universities are using college price calculators customized especially for them. They may take longer to complete, but they incorporate the institution’s grants and methods of determining aid and a thorough examination of the student’s financial and academic situation. That’s 15 minutes well spent.
- When Your Child Turns 18 and Goes to College: What Parents Need to Know (SCV)
- Panels of Experts Address Net Price Calculators and Financial Aid Award Letters (NACAC)
- The Net Price Calculator: Financial Aid ‘Game-Changer’? (NYT)