NEW YORK (AP) — Students checking out colleges this fall shouldn’t rule out any options based on price alone.
The tuition and fees that schools publish online are often far more than what families end up paying. The problem is that the true cost of attendance — after subtracting federal, state and school grants — isn’t always clear until students receive their financial aid award letters.
But starting Oct. 29, colleges will be required to provide “net price calculators” on their websites. These will give families a better sense, early on, of what their actual costs would be for that particular year. This is expected to help students get a more accurate assessment of the range of schools that are within their reach.
“The sticker price is what people look at, but it’s not a good indicator of what your cost is going to be,” says Laura Asher, president of the Institute for College Access & Success, which advocates for more affordable education. “Sometimes you’ll end up with a better deal at a school that looks more expensive on the surface.”
At private colleges, which tend to have bigger endowments from which they can provide aid, the average published cost for tuition and fees is $37,000. But that figure drops to $21,000 after factoring in grant aid, according to the College Board, which tracks trends in education pricing.
At public schools, the average published total for tuition and fees of $16,000 drops to $10,000 when factoring in grant aid.
Students and families don’t have to wait until later this month to start getting a better sense of their expected costs either; many schools have already posted their net price calculators. But they’re far from perfect and aren’t always as straightforward as one might expect.
Here are a few key points to note before you get started:
WHAT YOU’LL NEED
To start, it’s important to understand what exactly the “net price” entails.
This is defined as the total cost of attendance — including books, room and board — after the total estimated grant aid a particular student would receive from the school, the state and federal government.
Schools are given a lot of leeway in how they arrive at this figure, however. This means that the calculators can vary significantly in how much financial information they’ll require.
The U.S. Department of Education provides a fairly simple template that asks just 10 questions. But schools can use their own or other outside calculators that require more detail information.
The College Board, for example, makes a much more involved calculator that will be used by 300 schools. The calculator takes students through a five-page survey that asks for information such as dividend income, contributions to retirement plans, home values and tax deductions.
“For better and worse, there’s no limit to what schools can add,” Asher says.
But even with the more intricate calculators, families shouldn’t have problems answering the questions as long as they have a copy of their most recent tax forms in hand. As involved as the process may sound, keep in mind that this is information that will be needed eventually anyway for the FAFSA, or the Free Application for Federal Student Aid.
Also note that the calculators are designed to give estimates; they can’t accurately predict costs to the dollar.
“These calculators are good for determining whether a school is inside or outside the ballpark (of what you can afford), but not distinguishing between home plate and centerfield,” says Mark Kantrowitz, publisher of Finaid.org, which tracks the financial aid industry.
It’s also important to note that the aid a school provides in the first year isn’t necessarily guaranteed in following years, even if your financial situation doesn’t change.
WHERE TO LOOK
If the net price calculator isn’t immediately available on the homepage, look under the “Financial Aid” section, which is usually under an “Admissions” heading. Note that the calculator may also be listed under a different name, such as “financial aid estimator.” Remember that schools aren’t required to post their calculators until later this month. So if you don’t see it right now, check back in a few weeks.
Once you’ve located the calculator and entered all your information, you also want to be sure that you’re looking at the right figure.
Some schools may also provide a figure called “out-of-pocket cost” or “remaining cost.” Don’t be confused; this is the cost after the school factors in projected income from work and loans.
For example, a study by the Institute for College Access & Success this spring found one school subtracted more than $33,000 in “loans or work study” to give students an “upfront cost” of zero. This gives off “an illusion of affordability and can easily lead students and their families to believe that they will have no out-of-pocket costs,” the study noted.
These figures may also combine federal and private loans into one lump sum, even though their interest rates and terms can vary significantly.
Even if the calculator spits out a net price that’s slightly out of your reach, don’t be discouraged. The calculator might not have taken into account special circumstances, such as recent unemployment or academic achievements, that could qualify you for more aid.
“If you see a number that’s on the margin, call the financial aid office to continue the conversation,” Asher says. “The purpose is to provide an estimate. It’s personalized but not precise.”