Since January, when the University of North Carolina—Chapel Hill added a net price calculator to its web site, the online tool has been used nearly 5,200 times by visitors to compute the price tag of a college degree.
Across the country, the fog that surrounds college-bound students and their families trying to uncover the real cost of a college education could soon be lifted. All colleges and universities will soon have the calculators, thanks to a mandate by the federal government that institutions receiving Title IV federal student aid have the calculators in place by the end of October.
[Get more information on how to pay for college.]
The U.S. Department of Education's intent behind the mandate is for institutions to provide a clearer view of the difference between the total cost of tuition and fees—commonly referred to as sticker price—and the net price, an estimate of the cost after subtracting scholarships and grants (aid awarded to students that they do not have to repay).
Since most students entering college typically receive some institutional aid, the sooner they learn what institutions have to offer, the better they can compare different schools to determine what they can afford.
[Learn more about the net price of college.]
Phil Asbury, UNC's deputy director in the office of scholarships and student aid, says the precision of that institution's calculator, designed by College Board, relates directly to the information entered. "These estimates are very accurate depending upon the input of the data by the student and family," he says.
At schools already using the calculators, information gleaned from tax returns, household income, grade point averages, and SAT scores are the most common factors that a prospective student or parent enters about his or her financial status and academic standing. The calculators compute an estimate of aid tailored to a student or family's specific financial portfolio.
[Read about how to get the best financial aid package.]
Some institutions, such as the University of Montana, Purdue University, and Indiana State University, go a step further to include estimates for work study programs, federal Stafford loans, and other financing options. Students and parents should understand which of these estimates are for loans that will need to be repaid.
The length of time it takes to use the calculators—from 10 to 30 minutes, on average—depends on the amount of information an institution requires. Some institutions, such as the University of Maryland, use a basic calculator with a handful of questions modeled after a federal template. Other schools, including UNC–Chapel Hill and Williams College, go beyond that to ask an array of questions—queries about home ownership and medical bills aren't uncommon—that can affect the calculation's outcome.
While some of these personal questions are not always required to be answered to generate an estimate, institutions say they provide increased accuracy. "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," says Asbury.
Williams College was one of the first institutions to use a net price calculator, eight years ago. Paul Boyer, the school's director of financial aid, says the calculator, designed by Student Aid Services, Inc., also asks more questions than the federal guideline. "We figure more questions mean more data and a better outcome. We want to give people as true and clear a picture as we can of what we have to offer."