September 21, 2011
By October 29, it will hopefully be easier for families to better gauge the actual price of higher education.
As required by the Higher Education Opportunity Act of 2008, all institutions receiving Title IV federal student aid will be required to display an online "net price calculator" to help compute the actual cost of a college degree. Such online tools give prospective students a more accurate estimate of how much college will cost after taking into account scholarships and grants. That final figure is typically much lower than an institution's published sticker price.
Many institutions have already embraced the requirement. "Generally, colleges are not very enthused when new federal mandates come down," noted David Hawkins, director of public policy and research at the National Association for College Admission Counseling, who was quoted by Inside Higher Ed. "I can't think of another that has had the kind of uptake that this one has."
One reason is because many admissions officers see the calculators as a good way to reach prospective students who may otherwise not consider applying to a school with a high sticker price. Case in point: According to U.S. News & World Report, the University of North Carolina-Chapel Hill's net price calculator has been used nearly 5,200 times by visitors since the online tool was added to the institution's web site in January.
"We could not possibly provide this number of award estimates to this large number of students without this tool," noted Phil Asbury, UNC's deputy director in the office of scholarships and student aid, who was interviewed by U.S. News.
Yet it's still not clear how much sticker-price transparency the net price calculators will actually provide. Experts acknowledge that the online tool's accuracy depends greatly on how much information is entered. At the University of Maryland, for example, the online calculator includes a handful of questions. But net price calculators at other institutions, such as at UNC-Chapel Hill, ask for additional information such as details about home ownership and medical bills.
"These estimates are very accurate depending upon the input of the data by the student and family," Asbury said to U.S. News. "If a school approaches this in a very generic way, using income averages, for example, rather than need analysis, then the tool may not be quite as useful."
William Goggin, executive director of the Department of Education's Advisory Committee on Student Financial Assistance, who was interviewed by The New York Times, agreed. "There's such variation among financial aid awards--it gives us some pause," he admitted. "But we're willing to be surprised."
Ultimately, many see the net price calculator as a game-changer. "It's been very hard for students to figure out bottom-line costs," said Daniel Lugo, dean of admission and financial aid at Franklin and Marshall College, who was quoted by the Times. "Now they can, and not on April 25."
Compiled by Yaffa Klugerman
"Calculating Costs and Benefits," insidehighered.com, September 20, 2011, Libby A. Nelson
"New Online Tools Expected to Lift Veil on College Sticker Prices," usnews.com, September 14, 2011, Jay Conley
"The Net Price Calculator: Financial Aid 'Game Changer'?" thechoice.blogs.nytimes.com, September 9, 2011, Rebecca R. Ruiz