Posts tagged ‘net price calculator’

March 4, 2015

Can we afford this college? The 1-2-3 approach

by Grace

One of the most basic questions during the college planning process is often one of the hardest for a family to answer.

Can we afford this college?

The hard part is usually not in knowing what you can afford to pay, but in trying to find what the net cost of attendance will be for your child.  Here’s a three-step process that may help you answer this question.

  1. Run the Net Price Calculator
  2. Check the college website to find answers to the College Board “dirty dozen” questions
  3. Contact the school’s financial aid administrator


1.  Run the Net Price Calculator (NPC)

The NPC is an online tool that is a useful first step in comparing affordability.  Every college website has a calculator, which typically requires entering family financial information such as income and assets before the estimated net price of attending is generated.  Remember, this is an estimate and may not produce accurate results for business owners and other situations.  Proceed with caution, and check for online resources like the CollegeBoard tip sheet to help in the process.

2.  Check the college website to find answers to the College Board “dirty dozen” questions

A list of 12 questions to get you started on gathering information about a school’s financial aid policies is provided by the CollegeBoard.  In my experience, the answers to most of these questions can usually be found on college websites.  Going through these questions often prompts families to consider other important questions about college costs.

3.  Contact the school’s financial aid administrator

Okay, so not all your answers about costs and financial aid were easily found on the college website or other online resources?  Contact the college’s financial aid office and get the information directly from them.  They should be able to give you information rather quickly, and if they don’t it might be an indication of how transparent and helpful they are in other situations.

For organized families, it’s not a bad idea to create a spreadsheet that can capture important information and allow for efficient comparisons.

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November 13, 2014

A reminder to look at net costs when comparing colleges

by Grace

Families should look at the net costs, after financial aid of all types, when assessing potential colleges.

Parents comparing college costs would be doing themselves and their kids a huge disservice if they just pay attention to listed tuition prices. What really matters is how much the school will cost you after financial aid and outside scholarships. And frankly some schools offer more scholarships than others….

Reyna Gobel offers a three-step method for getting started on a college list.

1. Have your son or daughter gather a list of 10 schools they’re interested in attending….

2. Use the net price calculators on each school’s website….

3. Talk to the high school counselor for your teen….

Net price calculators are imperfect estimators, so be aware of the cases where they are more likely to produce inaccurate results.

Related:  Are you eligible for a college tuition discount?

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Reyna Gobel, “Why Applying to Schools Based on Tuition Prices Can Cost Families Money”, Forbes, 8/31/2014.

August 18, 2014

Are you eligible for a college tuition discount?

by Grace

How do you know if a particular college is likely to offer you a discount on their tuition price?  Before you even apply, you can get an estimate by running your specific profile data through a Net Price Calculator (NPC), a tool that can be found on every college’s website.

Forbes ran a Net Price Calculation for five schools using several hypothetical scenarios.  The results show discount rates (financial aid) that would be awarded given specified parameters.

… two types of students, one from a family with an annual income of $300,000 and another from a single-earner family making a mere $12,000 a year. We tested two different academic scenarios: a supersmart kid scoring 1540 on his SAT, with a 4.0 GPA and in the top 10% of his class, and a “B” student scoring 1250 on the SAT, with a GPA of 3.0 and in the top 50% of her graduating class.

20140803.COCNPCForbes1

The biggest surprise is that RPI gives more financial aid to English majors than to engineering students.

As you can see all the top institutions except well-endowed Amherst offer discounts or “merit” aid. Only Rensselaer Polytechnic Institute (RPI) differentiates its aid on its calculator by the student’s intended major as well as by income and ability. RPI clearly wants more poets and is willing to pay for them. President Nixon’s alma mater, Whittier College in southern California, clearly isn’t eager to attract lower-income students. In our test it offered an additional grant of only $1,334 to the low-income overachiever. Even after its ample discount, the needy student’s family still has to come up with half the cost of attendance.

This illustration is a reminder that a Net Price Calculator can help guide your college search.

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Lucie Lapovsky, “What’s Your Tuition Discount?”, Forbes, 7/30/2014.

January 22, 2014

The risk of promising your child that “we’ll find a way to pay” for college

by Grace

Don’t make promises you cannot keep.

In the college search and selection process, parents should think very carefully before assuring their child that “we’ll find a way to pay for it.”  That promise could be the cause of deep disappointment or crushing student debt.

In answering the question, “Should Students Apply to Reach Schools?“, Do It Yourself College Rankings discusses the pitfalls of applying to colleges that are financial reaches.

The simple answer is not to apply to any college that you can’t afford to attend.

The more detailed answer would be that it’s fine to apply to a financial reach school if everyone clearly understands that only significant financial aid would make matriculation possible should the student be accepted.  But to avoid unnecessary disappointment and stress in making the final decision where to attend, one recommendation is to get a sense about the likelihood of receiving financial aid by running the Net Price Calculator tool very early in the process.  Also consider the realistic chances of merit aid, which is often not included in the NPC estimate.

For more insight on what makes sense for your family when deciding whether to apply to a financial reach, check out the complete DIY Rankings answer.

Related:

January 21, 2014

Net Price Calculator can help guide your college search

by Grace

Can we afford it?

That question has to be high on the list for a high school student creating a list of colleges she’d like to attend, and the Net Price Calculator can help in answering that question during the early stages of the college search.

What is a Net Price Calculator?
Net price calculators are available on a college’s or university’s website and allow prospective students to enter information about themselves to find out what students like them paid to attend the institution in the previous year, after taking grants and scholarship aid into account.

While it’s fine to stretch aspirations in considering a dream college that may be a financial reach, it’s important to be realistic in understanding practical budget limitations.

Let’s consider the hypothetical case of a New York high school senior, where an NPC calculation can show meaningful cost differences among various colleges.  Here are three possible college choices:

  1. Harvard University:  It’s a reach for almost everyone because chances for admission at this Ivy League school are small at only 6%.
  2. Syracuse University:  A private university with a 50% acceptance rate that is attainable for many students.
  3. Binghamton University:  One of the top New York state universities, it comes with a 43% acceptance rate.

Here are simplified NPC scenarios showing Net Cost of Attendance (COA) based on earned income levels of $50,000 (low income), $80,000 (medium income), and $150,00 (high income).

20140115.SEMNPCChart1

Useful information, right?  This chart illustrates the oft-repeated advice that in some instances a private college may be as affordable as a state school.

Important points about this hypothetical NPC illustration:

At what income level does a family’s chance of aid become zero?

At an income level of $250,000, the net price of attendance in all these scenarios equals the gross price.  In other words, somewhere between an income of $150,000 and $250,000 is the point where a family would not qualify for any need-based financial aid.

The advice?  Run a NPC early on in the process to get a general idea about a college’s affordability.

Related:

October 23, 2013

Ten questions to ask about college financial aid

by Grace

Questions to Ask College Financial Aid Administrators

From Fastweb’s Quick Reference Guide to Evaluating Financial Aid Award Letters:

The following questions can have a significant impact on college costs, especially the out-of-pocket cost, and on evaluating the financial aid award letter.

  1. Does the college meet the full demonstrated financial need for all four years, or is there unmet need (a gap)?
  2. How much on average do the college costs increase per year?
  3. Does the college practice front-loading of grants? Can students expect to receive a similar amount of grants in subsequent years, assuming their financial circumstances are similar? If the college practices front-loading of grants, how much will the grants change each year?
  4. What is the college’s outside scholarship policy? How does the college reduce the need-based financial aid package when a student wins a private scholarship? Does the scholarship reduce the loan and work burden (and unmet need, if any) or does it replace the college’s grants and scholarships?
  5. What are the residency requirements for in-state public college tuition?
  6. How many hours will I need to work to earn the full work-study award I’ve been offered? How much will I be paid per hour? Are work-study jobs readily available, or are they hard to get?
  7. What are the requirements for keeping my grants and scholarships in future years? Do I need to maintain a minimum grade point average? Do I need to take a particular number of units? Do I need to participate in any special activities such as community service?
  8. How does one appeal for more financial aid if the financial aid award is insufficient or the family’s financial circumstances have changed?
  9. What percentage of first-time, full-time students graduate within a normal timeframe? How many years, on average, does it take to earn the degree?
  10. What percentage of students graduate with debt and what is the average cumulative debt at graduation?

These questions highlight some of the most critical issues that should be considered in determining how the net cost of college will be affected by financial aid.

Here’s a suggestion on how a family can proceed with educating themselves about a particular college’s costs.

  1. Run a school’s Net Price Calculator using the family’s specific financial information.
  2. Review the school website to find answers to the ten questions listed above.
  3. Contact the school’s financial aid administrator to get answers not found on the website.

Going through this process will uncover key financial information, providing a good sense of that school’s affordability.

Related:

September 2, 2013

College Net Price Calculators are not accurate for business owners

by Grace

A word to the wise —

Net price calculators are not accurate for business owners and other situations.

Here’s the warning from Bowdoin College:

For some families (e.g. divorces/separated, business owners) using the Net Price Calculator will be less reliable because of the complexity of their family financial circumstances. The calculator is not intended for international families….

The general message is that if your family’s financial circumstances deviate from a “typical” situation, the simplified NPC calculations are less likely to predict your cost to attend college.  In the case of business owners, schools usually will ask for additional financial information, which often results in revenue that had been netted out being added back in for the purpose of determining expected family contribution to college costs.

Net Price Calculators have been required since 2011.

In accordance with the Higher Education Act of 1965 (HEA), as amended, as of October 29, 2011 each postsecondary institution that participates in the Title IV federal student aid programs is required to post a net price calculator on its Web site that uses institutional data to provide estimated net price information to current and prospective students and their families based on a student’s individual circumstances. This calculator should allow students to calculate an estimated net price of attendance at an institution (defined as cost of attendance minus grant and scholarship aid) based on what similar students paid in a previous year. The net price calculator is required for all Title IV institutions that enroll full-time, first-time degree- or certificate-seeking undergraduate students.

Related:

April 19, 2013

In their college search, students need to look beyond ‘average net price’

by Grace

Even with its flaws, the Net Price Calculator (NPC) offers low-income students a better indication of college affordability than the College Scorecard does.  However, sometimes finding a college’s NPC is not easy.

Limited value in using a college’s average net price

Because it uses average net prices as a measure of affordability, the recently introduced College Scorecard may discourage low-income students from applying to high-priced schools.  Low-income students do not pay “average” prices.  For that matter, high-income students don’t either.

There’s just one problem: no student is average.

Consider a low-income applicant to the University of Pennsylvania, a school with a high sticker price. At Penn, a full-price student pays $59,600 (including tuition, room & board, and other fees) and a low-income student with a full scholarship pays $0. The average net price across these two students is $29,800. (As it happens, Penn’s reported average net price is $20,592.) Just like high sticker prices, high average net price can mislead students from modest circumstances looking for affordable college options. Many colleges – particularly prestigious schools with high sticker prices – are committed to building socioeconomically diverse student bodies. At such schools, students’ individualized net prices can vary significantly depending on their financial circumstances.

NPC figures offer a better measure of affordability.

… Like the College Scorecard, NPCs offer key financial information to students and families prior to application and matriculation. The College Board’s 2012 study revealed that more than half of college-bound seniors from lower-income and middle-income families still rule out colleges on the basis of sticker price, but with the advent of NPCs, students from all backgrounds can identify affordable college options before they decide where to apply.

… Instead of discussing financial aid after students have received acceptance letters in senior spring, counselors can help students build application lists in junior spring that take financial aid into account. With the Scorecard’s average net prices, high schools students are left with yet another one-size-fits-all ranking of affordability; in short, it is not much better than the starting “sticker price.”

20130418.COCNPCvsAverageNetPrice1

For low-income students like Cristina, the College Scorecard misses the mark – sometimes by a big margin. As with sticker prices, these average net prices can indicate to low-income students that they will find neither financial support nor a warm welcome at selective schools.

But NRC calculators are often not user friendly.

A report issued by The Institute for College Access and Success (TICAS) in October 2012 asserted that “net-price calculators are still not reliably easy for prospective college students and their families to find, use, and compare,” noting (among other issues) that many schools post NPCs on obscure web pages.

Although NPC links are included in both the College Scorecard and the Department of Education’s College Navigator, it turns out that many do not connect to the right location.

A solution:  College Abacus will soon have a consolidated set of links to all NPCs for U.S. colleges and universities.

At College Abacus, we are closing the gap between legislation – and its goals – and the actual needs of students, parents, and counselors around the United States. We are taking on the task of aggregating the net price calculators into a single, student-friendly tool. With the help of a grant provided by the Gates Foundation’s College Knowledge Challenge, we expect College Abacus to expand from its current group of 4,000+ schools to include all US colleges and universities by September 2013.

Related:  ‘Tips for Using Net Price Calculators’ (Cost of College)

December 27, 2011

College costs – sticker price vs. net price

by Grace

Although college “sticker prices” have soared over the last few years, net prices have experienced a more modest increase. 

… For the average full-time student, net tuition – which subtracts grants and tax-based aid – is less than half of the published price at private nonprofit four-year schools and less than a third of the published price at the typical public four-year institution.

Moreover, trends in sticker prices and net prices have diverged over the past several years, such that many students are actually paying less now to attend college than they would have five years ago.

This divergence is the result of a 40 percent increase in grant aid and a 78 percent increase in tax-based aid since 2005-6. The average full-time undergraduate now receives about $6,500 annually in grant aid and nearly $1,000 in tax-based aid to help defray tuition and fees (these figures, also from the College Board, are averaged across all students, including those who received no aid)…

Some students are bearing the brunt of high sticker prices

That’s all well and good, but for the one-third of students who are paying full price, the positive news about net prices is small comfort.  And for the two-thirds of the class of 2010 who graduated with an all-time average high of $25,250 in loans, the grants and tax benefits are not shielding them from reality of rising college costs.

Net Price Calculators can help

Many students and their families consider only published prices when comparing colleges, without taking financial aid into account.

It’s not surprising that the complexity of the financial aid formulas confuses many families, leading them to assume the worst when considering college costs.  While it’s still too early to know, we can hope that the recent introduction of Net Price Calculators on all college websites will enable families to get a more realistic estimate of their net college costs.

December 9, 2011

‘Tips for Using Net Price Calculators’

by Grace

Here are some practical tips for using Net Price Calculators, a tool that is a useful first step in comparing affordability among the various options during the college search process.

Finding them on the college website (they won’t always be in the same place)

  • Some calculators are easier to find than others. A few are posted on the college’s homepage, but most are in the Financial Aid section, which is sometimes under Admissions. Otherwise, try looking in Consumer Information or Disclosures, or search for the calculator within the site or by using an outside search engine like Google.
  • It’s not always called a “net price calculator,” so also keep an eye out for the keywords “cost,” “estimator,” and “financial aid.”…
  • Eventually, the Department of Education is planning to post all net price calculator URLs on its College Navigator tool (http://nces.ed.gov/collegenavigator/). We will update these tips when we find out more information about when the URLs will be posted.

Answering the questions

  • Be prepared to encounter all kinds of calculators, from the simple (as few as 10 questions) to the complex (50 or more). Some calculators ask questions that require you to dig up detailed financial information from your (or your parents’) tax returns, earnings statements, and bank statements. If you don’t have that information handy, answer as best you can or try to skip the question.
  • Colleges cannot require you to provide your contact information. If you aren’t comfortable giving them your name, email address, or other information, you don’t have to.

Interpreting the results

  • The most important number on the page is the “net price” – the full cost of attendance minus grants and scholarships. Make sure you focus on that dollar figure when interpreting calculator results and comparing colleges. Some colleges also subtract their expectations of how much you’ll earn and borrow to get a smaller cost figure, but it won’t be called “net price. Remember that grants and scholarships don’t need to be repaid, while work expectations must be earned and loans repaid with interest. That’s why work-study and loans are called “self-help.” You don’t want to accidentally compare one school’s net price with another school’s figure that includes loans and work-study.
  • Be wary of estimates that include unrealistic amounts of self-help. We have found calculators that subtract $20,000 or $30,000 worth of expected loans to get to what might be called a “final” or “out of pocket” cost figure of zero. This can make colleges look more affordable than they really are. It may look like you will have no out-of-pocket costs, but the costs are just delayed.
  • The results are only estimates and colleges can calculate them differently, so use them to make ballpark comparisons between colleges. Don’t draw conclusions based on differences of several dollars or even several hundreds of dollars – talk to the schools’ financial aid offices to find out more.
  • The estimates are only for your first year of college and apply to a particular academic year (e.g., 2011-12). If you expect to enter college at a later date, know that the college’s costs and financial aid policies may change.
  • Not all grants and scholarships are available for all years of college. You can contact the college’s financial aid office (or try searching its website) to find out whether you can expect the same amount of grant assistance after your first year.
  • As all net price calculators are required to tell you, the estimates are not final or binding financial aid awards. To get an actual aid offer, you have to apply to the school for admission and fill out the FAFSA (Free Application for Federal Student Aid, http://www.fafsa.ed.gov/) to qualify for federal financial aid, and you may have to fill other applications for aid from your state or college. Net price calculators can help you decide whether to take those next steps.

Courtesy of the Institute for College Access & Success, which also produced a report titled “Adding It All Up: An Early Look at Net Price Calculators.”

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