Come Saturday, Oct. 29, all of the roughly 7,000 colleges and universities in the United States will have tools online that aim to lend clarity to out-of-pocket costs for prospective students and families, in accordance with a mandate passed in 2008 by the Department of Education.
Net price calculators, as the tools are known, will estimate the total cost for full-time, first year college students, after accounting for factors like grants and school aid. The federal mandate allows schools to simply input their criteria into a government-provided calculator template—a one-hour process, according to financial aid guru Mark Kantrowitz—and post the subsequent calculator somewhere on their school website.
But as the federal calculator has come under increasing criticism for being too simple and not always accurate, more colleges have turned to one of many custom versions offered by third-party vendors, including the College Board and Student Aid Services (SAS).
SAS created calculators for about 100 schools in 2010, says its president, Jeff Whorley; so far in 2011, it has surpassed 450 clients, with more than 40 signed up in the past three weeks.
"The last 46 campuses that we've gotten have been campuses that chose the federal template, built it, looked at how it performed, and then decided that they need something that was a little more robust," Whorley says.
Because the federal template was made to satisfy every type of institution—from small, specialized colleges to large national universities—it had to remain broad, Whorley says. But for schools like Rice University, which want to showcase what makes their financial aid process unique, customizable options have proven to be a more attractive route.
Rice, a national university in Houston, experimented with several types of net price calculators and ultimately decided Texas state or federal options didn't meet its needs, according to Anne Walker, director of student financial services.
"We can't really rely on the states or the feds to get the best information in the students' hands," Walker says. "If we want those kids in our schools, we really need to be doing that."
Rice now uses an SAS-built calculator, which allows the university to better direct the tool to its target audience with customizable features, such as a "One-click Spanish" button that immediately translates the information.
"The net price calculator has given us an opportunity to really talk about what financial aid means at Rice," Walker says. "Because we're recruiting such a specific group of students, and it's such a highly competitive market for those kids, the net price calculator allows us to customize that messaging."
Between 1,100 and 1,500 schools have already chosen a customized calculator, SAS estimates, whether through a vendor or one created on their own. (Yale University and the University of Oregon have signed up with SAS; Harvard University and the Massachusetts Institute of Technology are among the institutions that have spearheaded their own calculators.)
But since the calculators can vary by school preference, students and parents trying to discern future college costs will be faced with an additional challenge, says Kantrowitz, founder of FinAid.org. At Villanova University in Pennsylvania, for example, school officials have opted to only include need-based aid in the findings of their College Board-supplied calculator, according to George Walter, associate dean of university admission and financial assistance. Newman University in Kansas, conversely, has been tweaking its calculator to include school scholarships, says Director of Financial Aid Charly Smith.
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Without a universal version or a clear way to differentiate what aid and data are and are not included in each calculation, families should be wary of sweeping comparisons, Kantrowitz says—a problem that's long been cited with comparing differing financial aid letters.
Users, he adds, should also take the estimates for what they likely are: ballpark figures.
"The calculators are probably going to have thousands of dollars difference between their estimates and what the actual figures turn out to be," Kantrowitz says. "They're useful tools for ruling in a school that you might have considered, but they're not useful tools for comparing colleges or for excluding a college.
"If there's a college you want to consider, and its net price is shown to be much higher than the other colleges that you're considering, don't necessarily rule it out."
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Despite some early kinks in the calculators, many school officials say the mandate is a positive step in the evolution of college cost transparency.
"Parents always feel so guilty that they couldn't save enough, [but] there's no way they could have saved enough to have kept up with the price of college," Rice's Walker says. "If we can get families out there looking at these calculators, at least they're going to start getting a better idea of what the costs are going to be so they can start managing those expectations with their son or daughter."
The estimations have helped Robyn Sekula, who is already anxious about covering the future college costs of her three daughters under the age of 9. Consulting a net price calculator several years ago showed that she would ultimately need about $420,000 to cover three educations—a staggering but motivating sum, she says.
"I really felt overwhelmed when I saw those numbers, but it also made me more determined to start sooner and to save up as much as I possibly could," says Sekula, a freelance writer and social media consultant who lives in New Albany, Ind. With the federal mandate in place, Sekula says, she'll check back in often to make sure she's still on track to fund her children's educations.
It's a path that Rice's Walker recommends to families with college on their radar: Consult the calculators of schools you're interested in early, and yearly. That way, prospective families hopefully won't be blindsided when the college bills begin to come in—as some current and former students may have been.
"If you talk to people in their mid-to-later 20s, if they don't have some story about the cost of college, they have a close friend who does," SAS's Whorley says. "When you really dig into that story, it's just: 'I didn't understand what it costs.' This is a big step forward."
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Clarified 10/27/11: Yale University is a client of Student Aid Services, which was not previously stated.