How do Colleges’ Net Price Calculators Work?
Colleges are incredibly expensive, with costs inching ever closer to the $100,000 mark. Of course, many colleges also pledge significant financial aid packages, and many students end up paying less than the actual sticker price. The difference between these numbers can be quite significant, which then leads many parents and students uncertain how much a college will really cost them.
To try and help with this, colleges offer several tools. Chief among these are Net Price Calculators, which give you some idea of how much you will have to pay to attend a given college. Of course, things are rarely that simple. In this article, we’ll explain what Net Price Calculators are (and what they aren’t), how they work, and how else you can understand how much you may end up paying for college. Let’s get started!
What is a Net Price Calculator?
The cost of college is determined by two factors:
- How much money attending actually costs
- How much financial assistance a college gives you
The difference between these two numbers is the net cost. This is an important figure, far more so than the total cost. To understand why, let’s look at two examples. First, Harvard. Their total cost of attendance is $82,866; this includes tuition, fees, housing, the price of supplies, and their estimated personal expenses for you. Their financial aid page then says that the average cost to parents is only $13,000. This is their average net cost.
Northeastern has a total cost of $90,250, once again including not just tuition, but fees, housing, food, and personal expenses. This is slightly more than Harvard’s total cost. Their financial aid promises to meet full demonstrated need, but does not disclose the average cost of attendance. This is where Net Price Calculators come in.
You can usually find the total cost of a university on their website; this is only an estimate, but it shows how much they expect students to pay. Both for direct costs such as tuition, fees, and housing, and in indirect costs, such as personal expenses and transportation. This is not always given; some universities are more reticent than others to share exactly how much they cost. They also sometimes include different items in their cost totals, or don’t include indirect costs at all.
Finally, colleges will sometimes include cost estimates for living off campus compared to on campus. These are generally wildly inaccurate; the cost of apartments is highly variable, though it does tend to be relatively high near universities. It may take some research to determine if living on or off campus makes more financial sense for you.
Using Net Price Calculators
Once you learn how much a college theoretically costs, you can use a Net Price Calculator to determine how much you will theoretically pay. This is only an estimate, and they are careful to caution that the number they give you is not the same as the total amount of financial aid you are guaranteed to receive.
You then input the following information into the calculator. Note that the actual information they want will vary slightly from school to school:
- Family information; this includes whether you own your primary residence, how many siblings you have, and how many of those are in college
- Income information. This is how much money your parents made in the past year, from both their jobs, and any other sources
- Asset information. This is information about how many assets your parents have, including investments, real estate, and any other significant funds
You can see an example of one of these calculators here; this is Harvard’s which is quite robust. Not every version will ask for the same information, but they will all need some version of it. This is because the amount of financial aid colleges offer is based in large part on the amount of financial resources you have, and how much they think you are able to pay.
You do not need to be 100% accurate with this information, but the more accurate you are, the more likely the prediction they provide is to match reality. This information mirrors what you will provide with your FAFSA and CSS Profile, and this allows colleges to estimate how much aid they will be able to give you, and therefore give you a ballpark estimate of how much you will need to pay.
Pros and Cons of Net Price Calculators
The biggest advantage of using a Net Price Calculator is that it gives you a more accurate way to compare the potential costs of different colleges. If you are concerned about how you will pay (as many students are), then knowing how much each college is likely to award you in financial aid is a major factor.
This is especially true when discussing top private schools. These institutions have some of the steepest tuitions, but sometimes have the best financial aid available. This sometimes is where the difficulty lies, because each school has their own policies on aid, and depending on where they draw the cutoffs, you may qualify at one school, and not at all for another.
Thus when building your list, if cost is a concern, you should definitely use Net Price Calculators when deciding whether a school should be on your list, and where it should land on that list. Some expensive schools may actually be more affordable than they appear, while schools which may have a lower overall price may have a much higher net cost than expected.
In particular, public schools tend to have net costs that are quite close to their total costs. This is because most public colleges do not have enough funding for many scholarships; often requiring them to be significantly more parsimonious when awarding need based aid.
The biggest con of Net Price Calculators is they can be inaccurate. While they give you a good estimate of how much you will end up needing to pay, they are only predictions. This means the amount you end up needing to pay can be higher (or lower, or exactly the same). Further, these calculators only take need-based aid into account; while many top schools rely primarily on need-based aid, other schools have generous merit scholarships; there is no way however, to predict how much merit aid a school will award ahead of time.
Thus while you should use the results you get from Net Price Calculators as a guide, you should not count on them exclusively. We recommend applying to schools with a range of scholarship opportunities, both merit and need based, along with other independent scholarships.
We do recommend applying Early Decision still, even with the uncertainty of your final aid package. While Early Decision is generally binding, they do have an exception for financial burden. If you are accepted, and are then unable to afford the school’s tuition, they will not hold you to the ED agreement. Thus if there is an issue with affording a school once you are accepted, they will not force you to attend.
Finally, a Net Price Calculator in no way relates to your chances of acceptance. It simply gives you some idea of how much aid you will get if you happen to get accepted. Gaining acceptance, and receiving merit aid, still depends on how they view your application as a whole.
Final Thoughts
The cost of college can be somewhat opaque; there isn’t just tuition and housing to pay for, but fees, books, food, transportation, and all of the myriad costs that accrue just from living in a place. These all contribute to the rising cost of college, as each rises with inflation (or ahead of it). Colleges are also frequently requiring students to stay in housing for their first year or more, especially at top schools.
We hope this article has thoroughly explained what Net Price Calculators are, how they work, and how you can best make use of them. Building an effective college list with cost in mind requires knowing just how much you will need to pay for college, and this is what these tools are for. Of course, this still leaves the challenge of applying to these colleges in the first place. If you are looking for advice on your applications, or help building a college list that best matches your needs, schedule a free consultation with us today. We have a deep experience helping students with every stage of their college applications, and are always happy to hear from you.
