Estimating College Costs: The Power of a Net Price Calculator

A few months ago, I noticed that my cable bill had crept up into uncharted territory. After calling the cable company and enduring twenty straight minutes of advertisements for Horrible Bosses 2, I eventually had the opportunity to express my concern that my monthly payment had increased $80 since last year and that I had, in that time, received a) no additional channels or services or b) no explanation for the hefty mark-up. Without hesitation the representative immediately told me about a new “limited time offer” where I would receive every premium channel AND pay roughly $100 less per month. This offer wasn’t listed on the website or advertised anywhere, but must simply be reserved for irate customers with one foot out the door. The lesson here is that cable companies are not exactly beacons of transparency.

Unfortunately, neither are colleges. Estimating college costs merely by comparing sticker prices is not often a fruitful endeavor and without a good faith estimate of the impact of a family’s financial standing and merit aid on the final bill, many applicants remain completely in the dark.

The genesis of the Net Price Calculator

To address the problem of tuition obfuscation, the feds passed a bill in 2011 that requires institutions of higher education to post a “net price calculator” on their university website. While the required components of these calculators are clearly delineated by the government, enough wiggle room exists for some schools to still offer less-than-helpful estimation tools. We present a guide for distinguishing between helpful and less-helpful calculators and offer tips for using this tool in formulating your application strategy.

Good versus bad NPCs

If you are able to input all of your data into a school’s net price calculator in less time than it takes you read a Garfield comic then you are highly unlikely to unlock useful financial information (even one of the longer Garfield strips where something semi-dramatic happens, like Odie gets taken to the pound). The rule of thumb for the time it should take to plug in your data is 15-20 minutes. Have documents related to family income, assets, and investments by your side—if an NPC is going to tell you anything accurate, this information will all be required.

Visit the net price calculator before applying

If there is no conceivable way that you/your family will be able to pay for a particular college based on your net price calculation, consider scrapping that application entirely. There is no reason to waste money and precious time completing an application for a school that, even in the best-case merit aid scenario is well beyond your financial reach. The worst strategy you can employ is to base your entire set of applications on pure financial guesswork. Netting a handful of acceptance letters from schools that you cannot afford without taking out massive student loans is not an enviable position to end up in. Make sure you pick at least one financial safety school which a quality NPC can help you select with confidence.

Use net price calculators as a guide

If you play around with the merit aid section of a NPC, you will see how altering certain variables will affect your net tuition price. For example, running the numbers for both a 1290 and a 1350 SAT score may give you two very different estimates. The 1290 you have in the bag as you enter your senior year might be more than enough to ensure acceptance at your top-choice school, therefore you see little reason to retake the SAT another time. Yet if the NPC on your school’s site tells you that an extra 60 points will cut five grand off your tuition, it’s probably time to register on College Board site and bury your nose back in those study guides.

The bottom Line

It is crucial to adopt a consumer-minded approach as you begin to navigate the college selection/admissions process. The goal shouldn’t be to get into the best school that will accept you, regardless of costs; rather, you should consider the big picture and seek an undergraduate experience fits into your future financial, educational, and career-oriented well-being.

While the cable bill for your dorm room is likely to be shrouded in mystery and maddeningly unpredictable, a net price calculator can help ensure that your tuition bill is nothing of the sort.

To find net calculators for your prospective colleges, simply Google the institution’s name and “net price calculator.” Or, you can visit the Net Price Calculator Center—a government site that includes NPCs for most selective schools.