Most colleges are required to provide Net Price Calculators on their website to help high school students and their parents get a more accurate look at the actual cost of attendance at their college. These calculators are supposed to help standardize the cost estimates in an effort to help families save time and money when applying to college.
But will they really help… or will they confuse?
There is a big push now for compliance with the deadlines and most colleges are scrambling to find a calculator that complies with regulations and allows them enough flexibility to work within their marketing efforts. Getting qualified students that can make the grade and afford their college is the primary objective for every school. If these new calculators were truly set up as they are supposed to, then it would be very easy to compare one school with any other. I am guessing, by the number of available calculators out there and the price differences of each, that some schools would not care to have that happen.
So far as I have been able to tell, these calculators are being formulated around the Federal Methodology, the Institutional Methodology or both depending on which calculator options are chosen by the college. This allows each college to explore which system works best for them. I am not sure if this is the best method for students and families as you may get different results depending on which methodology is being used. Maybe they should all be forced to show both methods so you can compare an apple to an apple.
Things To Watch For:
There are several areas that I noticed when looking at a variety of the existing calculators. They tend to make assumptions that favor the college’s own marketing efforts and sustainability. In reality, I have experienced that the following areas are not a complete and true representation of the costs that they are projecting. As for scholarships, grants and loans, most seem to be set up to match the school’s established programs.
On Campus vs. Off Campus Housing: Most of the calculators have a lower cost for on campus housing and when you change it to off campus, the price goes up significantly. In reality, I have found the opposite to be true at many schools. So watch this carefully.
Books and Supplies: The school projects a fairly accurate amount for books and supplies if you purchase from the college bookstore. But many savvy students have learned that online and off campus bookstores, along with used books can get your textbooks for substantially less. But you are probably better to plan on the higher cost and save when you can.
Other Indirect Costs: These costs include transportation, recreation and entertainment among others and can vary widely from student to student and college to college. I think they should leave it out, set it to zero or let you come up with your own figure that may differ for each college.
Scholarships and Grants: After answering a few basic questions, the school will come with an estimate for federal aid, scholarships, grants along with needs based and merit based aid.
Student and Parent Loans: Though you are trying to compare the college costs and aid without loans, some of these calculators will include a loan section. It can be helpful, but loans are pretty much the same for every college and really aren’t reducing your cost. In many instances they will increase you costs and these calculators tend to ignore that fact.
This new mandate is a step in the right direction, but as parents and students, we need to take proactive steps in an effort to increase our financial aid and reduce college costs. These calculators will hopefully help students to see the dollar figures for a college and maybe rule out some schools that are not affordable before you spend any money to visit, apply or attend open houses.
But if we are expecting a pure standardized comparison, I think we are going to be disappointed. Hopefully they will evolve into something better over the years, but as long as colleges compete for students, compete athletically and compete for your hard-earned dollars, they are all going to try to find and advantage.
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Keith Maderer is the father of five college age students, with three currently in college, and has been a financial adviser in Buffalo, New York since 1981. He is the author of “How To Get Your College Education For Less” . Available on Amazon.com – ISBN No: 978-1-4538-2053-7. This book is filled with practical strategies you can use right now to save money on college.