Net Price Calculators: How Well Do They Estimate the Real College Cost?

Dear College Made Simple reader,

There are countless articles about the price of a college education. Their chief subject – tuition costs.

Yet many of these articles tend to confuse tuition cost with the net cost of college – which is what you will actually pay for an academic year.

That’s one of the main reasons all U.S. colleges are now required to include a “Net Price Calculator” on their official school website.

While they’re designed to help parents and students estimate the amount of financial aid they could potentially receive from an institution (thus estimating the “net price”), the actual benefit for families is perhaps not very meaningful. Here’s more on that…

– Scott

Do Net Price Calculators Really Estimate the “Real” Cost of College?

Net Price Calculators are exactly what you would expect. You punch in information about yourself, your family’s finances, where you plan to live while going to school, etc.

After all the info is entered, you’re expecting to discover approximately what you might pay per year for any degree a college offers.

(If you haven’t heard of a Net Price Calculator before, don’t feel like you’ve been out of the loop. The federal government only recently required, as of October 31, 2011, that all colleges and universities list one on their website.)

Net Price Calculators may provide some basic estimates, such as…

Paying in-state tuition versus out-of-state tuition, living on-campus versus living off-campus or living with your parents, how much you expect to take out in loans, or how much you can expect to receive in scholarships/grants.

However, it’s what is left out of the calculations that could be potentially risky for families…

For starters, many of the calculators ask too few questions, which could produce inaccurate numbers for some families.

Jeff Whorley, president of a firm that creates custom calculators for 42+ colleges, agrees with critics. His company analyzed the federal calculator using 145,000 actual student profiles and found it inaccurate 65% of the time.

You also want to keep in mind that schools only have to follow minimum criteria for its Net Price Calculators.  In other words, it’s at the school’s discretion as to how in-depth they want their Calculators to be.

For example, many net college calculators don’t outright tell you is how much less you will actually pay when scholarships and grants are factored in.

Additionally, families aren’t at all clued into how they can potentially lower their out-of-pocket costs.  (Remember, colleges are businesses, too… and it’s not in their best interests for you to know how to lower the cost of attending their institution.)

What’s more – Net Price Calculators do not show parents how to pay for these costs without jeopardizing the rest of their overall financial planning goals. (The only option colleges typically give are loan programs, which often times can be an additional revenue source for the college.)

Do take these calculators with a grain of salt.  They are far from being a comprehensive resource. There are a lot more steps that are necessary – yet largely overlooked by the majority of college-bound high school students. We’ll cover many of those in future College Made Simple reports.

To your college funding & admissions success,

Scott Weingold

Co-Founder, College Planning Network LLC
Publisher, CollegeMadeSimple.com – The free educational resource of College Planning Network

 

Related Articles:

What are the “Hidden Costs” of College?

How Much Should I Spend on College?

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Editor's Note: Scott Weingold has been ranked the #1 “College Financial Aid Expert Worth Knowing About” in the entire country by CollegeStats.org.  He has co-authored the book, “The Real Secret To Paying For College. The Insider’s Guide To Sending Your Child To College – Without Spending Your Life’s Savings.” Scott also publishes a popular free online newsletter, “College Funding Made Simple" which reveals insider’s tips, methods, and strategies for beating the high cost of college.

Scott is the co-founder and a principal of the widely renown College Planning Network, LLC – the nation’s largest and most reputable college admissions and financial aid planning firm. CPN is a proud member of the Better Business Bureau, the National Association of College Funding Advisors, the National Association for College Admission Counseling, the National Association of Student Financial Aid Administrators and the Student Affairs Administrators in Higher Education.

Scott, along with his college funding advisory team, helps thousands of families throughout the country with their college planning needs and offers a series of free educational webinars and workshops on “How To Pay For College Without Going Broke In The Process!” He's been featured or mentioned in The Philadelphia Inquirer, Yahoo News, TheStreet.com, Voice America with Ron Adams, Crains Cleveland Business, and on Cleveland Connection with James McIntyre.  Scott has published numerous articles and is a professional speaker who has addressed thousands of audiences online and offline throughout the United States.  His actionable insights and candid, open approach have earned him & his team numerous media interviews, citations, and speaking opportunities, and his free online video workshop is one of the Internet’s most widely viewed pieces in the college funding space.