Net price calculators: Will they help with your college search?
How to pay for college is on everyone’s mind right now. Last week, President Obama announced new, improved student loan rules. The same day, the College Board released its annual report on tuition pricing, indicating that the cost of college has gone way up. In-state public schools (still one of the best deals in town) spiked to $8,244 per year, up 8.3 percent from last year. And private schools jumped to $28,500 per year, up 4.5 percent from last year. This is the worst news I’ve heard since August, when The Atlantic reported that student loans have grown 511% since 1999.
So how can families deal with the crazy cost of higher education? Luckily, there’s a new weapon in the arsenal: As of October 29, a federal mandate required all colleges and universities to post net price calculators on their websites.
Estimates aren’t exact, but they’re at least more reliable than the old sticker prices.
The calculators allow prospective students to estimate the true cost of attending the school (the net price takes into account grants and scholarships, which can significantly chop away at the sticker price). This is a huge boon for families (understandably) confused about which institutions they can afford. By bringing colleges’ endowment programs into focus, Time points out, the calculators might reveal that the fancy private school you thought was out of your league is actually cheaper for you than the more moderately-priced university you considered your backup plan.
Of course, the calculators have already earned critics. One is FinAid.org’s Mark Kantrowitz, whose recent report reveals that, for a variety of reasons, the net price calculators can underestimate college cost by thousands of dollars. And the Star Tribune‘s Kara McGuire points out that there’s no standard formula for the tools—some colleges require you to enter more detailed financial info than others, meaning you might not get an apples-to-apples comparison, and that some estimates are more accurate than others.
So, will these calculators help with your college search? Yes, when used with caution. My advice: Remember that estimates aren’t exact, but they’re at least more reliable than the old sticker prices. And when you’re deciding what you can afford, always build in a cushion and assume there will be unforeseen costs. That way, enrolling in school won’t bring your financial life anywhere near the brink.
Have you tried the net price calculators? How would you rate them?