Lee Bierer - Nationally Syndicated Columnist and Independent College Counselor.

Tool estimates education’s cost

Whenever I’ve written about financial aid issues, it’s always been directed toward high school seniors, but a new tool in the marketplace has been developed that assists families of high school underclassmen predict the cost of college.

The “Net Price Calculator” (NPC) was designed in accordance with the Higher Education Opportunity Act (HEOA) of 2008. It requires each college or university that provides federal student aid to post a net price calculator on its website that allows families to calculate their own cost of attendance, based on individual circumstances.

After you input the requested financial data, the calculator estimates your financial aid; it subtracts that amount from the published price (tuition, room, board) and delivers a net price, which is the amount a student will need to pay or borrow to enroll.

One reason the Net Price Calculator was created was that many families were making false assumptions about their ability to receive financial aid from institutions. The focus on an institution’s sticker price, for private colleges frequently hovering over $50,000 annually, sparked the common refrain “we’ll never get any money.”

Families were ruling out colleges early in the process and preventing students from even applying to colleges that, in reality, would have given them financial aid. According to College Board, “one of the goals of the Net Price Calculator is to allow students to find that some colleges they thought were unaffordable are within their financial reach.”

While the NPC makes the financial aid process more transparent, the results are not a final or guaranteed financial aid offer. The NPC does not replace the FAFSA (Free Application for Federal Student Aid – www.fafsa.ed.gov) or the CSS PROFILE ( https://profile online.collegeboard.com ). The results are intended to help families make sound, informed financial decisions.

The Institute for College Access and Success recently completed a survey which determined that “59 percent of students ruled out college on the basis of sticker price without considering financial aid support.”

The report also stated that as a result of this lack of information about financial aid possibilities, students may end up “under-matching” – choosing a less competitive college.

There are a few choices about how to begin.

1) The federal template nces.ed.gov/ipeds/ netpricecalculator/ .

2) Many colleges have created their own calculators on their websites.

3) College Board has created a third-party option with almost 300 participating colleges. The benefits of the College Board version, ( www.collegeboard.com/html/net pricecalculator/ ) are that it will save all of your information from college to college.

Here’s what you need to complete the NPC: parents’ most recent tax returns and W-2s or pay stubs. You should allow 15-20 minutes.

Make sure you print a copy or email the results to yourselves; that will make it easier to compare one college with another.

Don’t assume you make too much money to qualify for financial aid. At Princeton, families earning between $160,000 and $180,000 qualified for an average award of $26,450.

Lee Bierer is an independent college adviser based in Charlotte. Send questions to lee@collegeadmissionsstrategies.com; www.collegeadmissionsstrategies.com
Read more here: http://www.charlotteobserver.com/2012/02/21/3031004/tool-estimates-educations-cost.html#storylink=cpy
 

1 Response » to “Tool estimates education’s cost”

  1. Mary Fallon says:

    Not all net price calculators are accurate and detailed. Most colleges used the free federal template NPC to build a basic one which has proven error-prone because, among other things, it does not follow the federal methodology for determining a student’s Estimated Family Contribution and is based on two-year old AVERAGES of aid not current aid-award formulas. In contrast, the market leading NPC provider, Student Aid Services, and other custom NPC providers offered colleges advanced technology that generates reliable aid estimates. Students can determine just how accurate an NPC is by noting how many questions it asks. NPCs based on the federal template ask about 8 questions and therefore often overestimate costs. NPCs that ask between 30 to 40 questions – which takes about 10 minutes to answer – provide detailed and accurate estimates of aid eligibility, net price, and out-of-pocket costs. Student Aid Services’ NPCs even offer colleges the opportunity to calculate work study, military aid, and institutional scholarships to ensure students have a complete picture of their costs. Since last October’s federal NPC mandate deadline, at least 100 colleges have switched from the federal template to Student Aid Services’ custom NPCs to offer students an accurate estimate of their affordability and value.

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