Paying for College: What is the college Net Price Calculator?

February 21, 2014

Right now, college-bound high school seniors and their parents are putting the finishing touches on their financial aid applications for the coming academic year 2014-2015. A significant concern, of course, is the cost of college, how much aid the family may qualify for, as well as how much in loans and savings will be needed to meet college expenses over the next four years (or more!).

One recently implement tool that could be useful to parents of college applicants as well as to those with high school juniors and sophomores, is the Net Price Calculator. The “Net Price Calculator” (NPC) is a Federal requirement on each college’s website, designed to provide families with an estimation of their out-of-pocket obligation for the student to attend that college, based on data entries of parental and student income and assets. Most NPC’s can be accessed via the college’s own website or through the College Board, www.collegeboard.org.

Intended to provide a general idea of what a family might have to pay, it’s important to remember that these are estimates only; each college has its own specific criteria and the results provided are not guaranteed. In addition, even if two families enter similar figures for income and asset values, differences such as the students’ GPA’s, SAT scores, class rank and other criteria may cause the results to differ between the families by many thousands of dollars.

Despite the Federal government’s attempt to make college aid more transparent, there is still a significant amount of secrecy about how colleges decide what the financial aid award letter may look like. Depending upon the college’s enrollment goals, the criteria used may also change periodically. The NPC is a helpful tool, but families may still have to wait until March or April to see the final award letter before making the firm decision.

For parents with high-school juniors and sophomores, a useful technique to uncover more information may be to pay a visit to each school’s financial aid office during campus visits and ask the Aid Officers directly what specific criteria is used. You still may not get more than a general answer and certainly not a firm commitment, but the interview may be more productive than the on-line calculator.