In the not so distant past, students didn't know what they would pay for college until they applied, were accepted, and received an award letter. They also usually based their decisions about where they could afford to go on the sticker price of tuition, without factoring in potential college financial aid. This changed in 2011, when the federal government mandated colleges provide students with online net price calculators.
Net price calculators are simple tools found right on a college’s website that provide personalized estimates of the out-of-pocket price you will theoretically pay for your first year of school based on factors like personal financial information, actual sticker price of the college, potential need-based aid, and even scholarships or loans.
The government mandate required certain basic factors be included in each calculator and provided a template for a simple calculator, which many public colleges use. But beyond that, schools have a lot of room to improvise. The result is that the length, difficulty, and accuracy of net price calculators may vary widely. This can make it difficult to know how much you can trust an estimate or effectively compare prices of different colleges.
However, despite their shortcomings, and when used wisely, a net price calculator can be an important resource in your quest for financial aid. These tips can help ensure you get the most out of net price calculators—and the most bang for your college buck.
- Net price calculators don’t work for all students. The calculators are typically designed for full-time, first-year undergraduates; the calculators are not meant for part-time students, graduate students, and even upperclassmen, because they will not get accurate results. Additionally, students who expect to pay out-of-state tuition, such as most international students, might be out of luck too, because public colleges frequently base calculations on in-state figures.
- Know where to look. A 2012 report by The Institute of College Access & Success (TICAS) found that net price calculators can be hard to find: one quarter of a 50-school sample did not list their calculators on a relevant page. While most should be on financial aid and admissions sites, be prepared to search elsewhere. Also note that schools may use a term other than “net price calculator.” If you still have trouble finding a calculator, try the Department of Education's Net Price Calculator Center, which will link you to many colleges’ calculators.
- Be cautious of estimates. This is perhaps the most important thing to remember. While some net price calculators use as many as 70 data points, others use as few as eight. Generally speaking, the fewer questions asked by the calculator, the greater the potential margin for error. That said, even with the most precise calculator, no estimate is guaranteed. Don’t use the estimates as hard-and-fast numbers, but as ballpark ranges.
- Be as exact as possible. One way to improve accuracy, of course, is to be as precise as you can with your information. Calculators may call for the latest tax return and bank and investment statements from both students and their parents. If the school provides merit scholarships, the calculator may ask for information like GPA, test scores, and class rank. Always double-check to make sure the information you provided is correct. Along the same lines, keep an eye out for questions that don’t require precise data and instead ask for a range—which might make the estimate less accurate.
- Watch for outdated data. The 2012 TICAS report also found that as many as 40% of calculators used outdated tuition and room and board prices, some from as far as three years back. When college costs rise ever year, that’s problematic. To be safe, compare the figures the school is using in the calculator with the costs in current-year financial aid information.
- Use caution with loan and work-study figures. In addition to the net price of attending, some colleges provide a second estimate that factors in how much you’ll borrow via loans or earn through work-study. This helps make their cost seem smaller. But that number can be misleading—obviously, loans and work-study are not free money—and schools may overestimate those figures. Be careful when calculators include this information, and make sure you don’t accidentally compare one school’s net price with another school’s figure that includes loans and work-study.
- Be mindful that costs may increase. Keep in mind that financial aid packages may decrease after freshman year, and tuition prices are likely to go up annually. That means your total four-year price may cost more than the net price calculator estimate suggests. (Along these same lines, younger students and their parents shouldn’t rely on net price calculators to determine college costs far in advance, since the figures will likely rise considerably.)
- Use calculators to strategize. It’s wise to play around with calculators early on in the college search process. They can be helpful to see, for example, how much financial aid a student could earn with a higher GPA or test score. If just a few more points on the SAT could lead to a significant jump in awards, maybe it’s worth taking again. They also can help you identify important patterns, such as that a private school might actually cost less than a public one because they offer more need-based financial aid.
- Take advantage of other calculator resources. One great tool is College Abacus, a one-stop site that lets students compare the net prices of more than 5,000 colleges. And remember, net price isn’t the only way to get an idea of college affordability. For example, a slew of information, such as what others paid for a particular school in the past, can be found at the National Center for Education Statistics.
- Follow up with the school. Check with the financial aid office about whether your estimate is as accurate as possible or if there are other opportunities for financial help. This is especially true for net price calculators that don’t factor in merit-based aid—your college costs may be very different after scholarships. And again, remember that no net price calculator estimate is guaranteed. Don’t rule out your dream school without first talking to them directly.