Students and parents can't get a clear picture of their college options without understanding the cost of attendance. Net price calculators can help bring that into focus.
But only 33.4 percent of parents factor cost into the college search process, and roughly 11 percent consider cost during the application process, according to a September 2013 report by Royall & Co. The market research firm, which specializes in college recruitment, surveyed 2,046 parents of college-bound high school students.
Looking at net price versus sticker price - what most schools post on their websites - gets students and families thinking about affordability. The earlier this can happen, the better, says Martha Savery, director of public affairs for the Massachusetts Educational Financing Authority, a nonprofit group that helps families plan and pay for college. The organization also runs the state's two college savings plans.
"The more educated a family can be around affordability and how to meet that through college savings, their present income and through borrowing if they need to - those are all pieces of the puzzle that they need to put together," she says.
These online calculators can be found on every college and university's website, courtesy of a federal mandate. Users input data such as age, veteran status, parental income and household size, and the tool calculates their estimated net price. That includes average tuition, room and board, books, supplies and personal expenses for first-time, full-time students, minus any grants or scholarships the student might receive.
Use of net price calculators is on the rise, according to a February 2013 report by the College Board and the Art & Science Group, an educational consulting firm. While that is good news, prospective students need to start using the tool much earlier in the college search process, says Myra Smith, executive director of financial aid services for College Board.
"When you start to just think about college and you're going on our college search and saying, 'How many have this major?' or 'How many colleges are in this area?' or 'How many colleges have this male-to-female ratio, or this sports team?', or anything like that. At that point you should also be doing the net price calculator," Smith says.
[Find out which schools claim to meet full financial need.]
Turning to the calculators at the very start of the search process can also keep students from disregarding schools they assume are financially out of reach, Smith says.
"Students can inadvertently look at tuition and say, 'Oh, that college costs $40,000 and this college costs $5,000. I'm going to go to the one that costs $5,000,'" she says.
Researching cost before campus visits and applications can get tough financial talks out of the way before a student gets emotionally attached to a school, says Claire Dennison, vice president of programs at uAspire, a nonprofit that provides free financial aid counseling for mostly low-income, first-generation college students.
Students can also ensure they apply to a financial safety school. These are colleges students know they can both get into and afford, without student loans. Having one or two safety schools on the list gives students more choices, Dennison says.
Realistic expectations can also make the decision process easier, says Smith, with College Board.
"The problem is, when they get their decision in the spring, and then they're asked to turn around and decide in three to four weeks if they're going to go there. That is way too late to have a serious conversation about finances," Smith says. "You wouldn't buy a house that way."
Net price calculators aren't perfect, though. Calculators vary from school to school. While some ask for a lot of details, others require just basic financial data. Typically, the more questions asked, the more precise the estimate, says Smith.
Students and parents should avoid using ballpark income and GPA figures to ensure they get an accurate estimate, advises Dennison, from uAspire.
To avoid any missteps or confusion, families should work with a guidance counselor or teacher to fill out the calculator for any schools they are interested in, she says.
Dennison also suggest students take a "consumer approach" by using other tools, such as the Department of Education's FAFSA4caster, comparing net price estimates from multiple colleges and then following up with each school's financial aid office.
"It's not just taking one net price calculator and the result and then walking away," she says. "You never go in and buy the first car you test drive. You usually test drive others, or you go to different dealerships, or you get different reviews. It's not just taking one thing at face value. Exploration is the key."
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