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Friday, November 18, 2011

Net Price Calculators - Another way to mislead parents?
Net price calculators are tools which are supposed to help parents and students determine how much a given school is likely to cost, after financial aid is factored in.  This is a terrific idea!  Many parents grasp the notion that their actual price will differ from the published, official price of the college their child attends.  Everyone hopes the price will be very small; their family will receive large scholarships and grants.  Obviously, this cannot always be the case.  A few students will pay very, very little.  A number will pay full price. Most will pay something in between.

However, a look at the net price calculator the Department of Education has online reveals some of the challenge parents face when trying to sort all of this out for themselves.

Dept of Education’s site -
College Affordability and Transparency Center!

            The fine print at the bottom of the page says:

Note: Average net price is generated by subtracting the average amount of federal, state/local government, or institutional grant or scholarship aid from the total cost of attendance.

 Total cost of attendance is the sum of published tuition and required fees (lower of in-district or in-state, where applicable), books and supplies, and the weighted average for room and board and other expenses.

Average net price is for full-time beginning undergraduate students who received grant or scholarship aid from federal, state or local governments, or the institution. 

Let's take a moment to understand what this means.The first paragraph is pretty straightforward.  The average net price is the cost of attendance less grant or scholarship aid.  That is as it should be.  Now, the next sentence defines the way cost of attendance is defined.  Note the parenthetical information - the figure used is IN STATE.  Therefore all the costs are skewed down significantly.  If that weren't enough, take a good look at the third sentence of their fine print.  First, they used data for Freshman, who typically receive the most aid, period.  Second, they only used the data for those Freshman who received grants or scholarships!  They EXCLUDED all those who PAID FULL PRICE!

Consequently, parents cannot trust the net prices listed on the website at all!  They are less than what most families will pay.

Please realise that this is critically important.  All schools were required to have a net price calculator on their website by October 2011.  If the Department of Education's data is this misleading for parents, how reliable are the numbers on the schools' own sites? 

When I work with my clients, I calculate the net price for each of the schools under consideration myself.  My clients have a realistic estimate of their costs.  Then they can judge the affordability of the schools their child is considering.  For more information, please visit my website:  Schedule your initial consultation today and start working with a seasoned professional who has your best interests in mind! 

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