A student’s true cost of a college education is no longer a mystery. College price comparison shopping is now possible using net price calculators (NPC). NPCs are easy to use and in minutes generate – at minimum – a personalized estimate of the amount of free financial aid a specific school expects to award a specific student.
Usually a school’s NPC is on its financial aid or admissions web pages. In the minutes it takes to make a sandwich, a prospective full-time, first-year college student can learn how much in free grants, and often how much other financial aid, any school expects to offer her or him. Getting personalized financial aid estimates from a wide variety of colleges is an opportunity to learn which colleges will offer the best deal, so families can better plan for how to pay for an education and avoid overwhelming debt after graduation.
All colleges and other post secondary schools post an average ‘cost of attendance’ or sticker price. But most students don’t pay sticker price. (COA is the combined cost of tuition, fees, housing, meals, books, supplies, and other personal expenses such as transportation.) Before NPCs were posted in October 2011, there was no way of knowing in advance of applying the amount of financial aid to expect to reduce a student’s out-of-pocket college cost.
Net price calculators make college planning smarter and an education more affordable. They give students and their families insight into their real cost before actually applying to schools. Using NPCs a year, or two, before applying lets a student be more selective about where to spend their family’s money. An NPC is a set of questions about a student’s dependency status, academic record, and the family’s financial situation. Collecting that information is necessary to give a prospective student a personalized estimate of his or her ‘net price’ at a particular school.
A college’s COA (sticker price) minus any free grants a student is eligible to receive equals a student’s net price. However, net price isn’t the entire financial picture. College costs also can be reduced more if a student receives institutional scholarships and so-called ‘self-help’ aid, such as federal work-study programs, federal education loans, and military aid. Net price minus these other types of financial aid equals a student’s out-of-pocket cost – the check that needs to be written before college classes begin.
But beware the accuracy of financial aid estimates will vary because the country’s 7,171 postsecondary schools have a choice about which type of NPC they provide. Some colleges posted a bare minimum NPC, which only determines an estimate of free grant money, but not eligibility for other types of student financial aid.
However, about 1,500 colleges posted very sophisticated NPCs that go way beyond the federal minimum requirements. These more sophisticated NPCs are easy to identify. They ask 30 to 40 questions – which takes 8 to 12 minutes to answer – and produce very accurate, personalized aid estimates, which include free grants, work-study, federal education loans, institutional scholarships, and, in many cases, military aid. (How can these estimates be very accurate? These colleges’ NPCs use the same formulas for estimating aid as the colleges do figuring actual aid awards.)
Generally, the more questions an NPC asks, the more accurate the student’s individualized estimate will be. NPC accuracy also depends on the accuracy of information provided by the user. Aid eligibility can vary greatly based on the student’s personal circumstances, so a student must answer the questions correctly to get accurate aid eligibility, net price, and out-of-pocket estimates.
NPCs can be used anonymously. However, colleges compete for students and want to identify students who are good fits. When a student’s name and address is registered on an NPC, colleges, which find the candidate attractive, are encouraged to reach out to that student, and potentially to offer additional financial aid to attend. Some colleges even use “demonstrated interest” as a criterion for deciding which students to admit. Providing a student’s contact information on college’s NPC is one way to demonstrate that student’s interest.
This post was provided by Mary Fallon, spokesperson for Student Aid Services of Sacramento, the leading provider of custom net price calculators who was a guest on College Smart Radio “Tackling the Runaway Costs of College” on July 13th, 2013. Listen to this broadcast on YouTube here.
Photo Credit: Justin Marty