Net Price Calculators
Updated September, 2016
As of October 29th, 2011, all colleges that participate in the federal student aid program and have full-time, degree-seeking freshmen were required to post a net price calculator on their websites. The calculator estimates the net price of the college for a particular family based on the family's answers to a short series of financial questions. Net price is defined as the cost of attendance (which includes tuition and fees, room and board, books, transportation, and personal expenses) minus any grant and scholarship aid the student is projected to receive.
What’s the Big Deal?
In previous years, families selected which colleges to apply to without knowing what each college would actually cost. An applicant to a college with a sticker price of $50,000 might have ended up paying as little as a few thousand dollars or as much as the full price of $50,000, depending on the family's financial circumstances and how much financial aid money the college had available to disburse.
Before the net price calculators, a family didn’t find out how much they would be required to pay for a college until around the same time as the student received his acceptance letter. At that point, if all his college choices cost more than the family was willing or able to pay, it was too late to go back and apply to less expensive schools. With the advent of net price calculators, however, families can get estimates of the net prices of colleges so that they can compare them early in the college search process and use the information to make better decisions about where to apply.
How Do You Find Them?
Rather than develop their own net price calculators, many colleges have opted to use the College Board’s net price calculator site. This is convenient for families because the net price calculators for a number of colleges are available in one place. Here’s how you use it. You first go to the site and click on Participating Schools to get started. Select a college and then answer the series of questions about parent and student assets and circumstances. Once that’s done, the calculator generates your family's estimated net price for a year of college at that school.
Underneath the net price estimate there is an additional section entitled Estimated Self Help that lists the amount of loans and work-study that you can expect to be offered. These funds are part of your net price, because they are money you will need to repay – or that your child will have to earn, but they are provided to give you some idea of the resources you’re likely to be offered. In other words, while loans and work don't reduce your net price, they do reduce the amount of money you'll need to come up with on your own.
Colleges that are not using the College Board calculator should have their own calculator posted on their website. One easy way to find it is to just google "College X net price calculator."
Some Things to Keep In Mind
• The net price estimate is just that – a ballpark estimate of your net price. It's not a financial aid offer or guarantee. Your actual figure will be different because it will be based on much more detailed information about your finances that you will supply when you complete FAFSA in your child's senior year. In other words, using a college's net price calculator does not constitute an application for financial aid. In order to qualify for financial aid at any college, you and your teen need to complete the government form know as FAFSA and have it sent to the college. Depending on the college, you may need to submit additional forms as well.
• Your net price estimate may not include all the merit aid your child might receive. The only merit aid that can be included in the estimate is merit aid that’s based solely on GPA and standardized test scores. Merit aid that’s awarded on a more holistic basis won’t be included. Read the fine print on the net price calculator to learn whether merit aid is included.
How Should You Use the Net Price Estimates?
In a word – cautiously. These calculators vary with respect to the methodologies they use to calculate the estimate. While even a rough estimate is a lot better than no estimate at all, remember that you won’t know your actual net price at a college until your child is accepted and you receive your award letter from the financial aid office.
A second caveat; don’t cross Luxury Lawns University off the list of colleges solely because its net price estimate is more than you’re prepared to pay. College-based merit aid that wasn't included in the net price estimate could make it a lot more affordable. Moreover, knowing early in the process that the net price is high could motivate your teen to be more active in searching for additional outside scholarships. So if your son has his heart set on Luxury Lawns, there’s no harm in applying - just make sure he’s also applying to several colleges you’re sure you can afford.
As mentioned earlier, much of the merit aid offered by colleges will not be included in net price calculator information. To learn how to find it, read the Merit Aid article.
College is a major expense, so use net price calculators to be a savvy shopper.
Focus on Net Price, Not Sticker Price: This is a nice article about net price calculators from the College Board.
Merit Aid: the next article in the Sidelines Guide section.
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