4 Things You Need to Know About College Cost Calculators

The new tools, required by the federal government, should give a better sense of true costs.

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One of the most infuriating aspects of the college admission process is this: Families usually won't know what a college is going to cost until they receive their financial aid package.

Often this critical information doesn't arrive until the spring, which gives families little time to digest the information and select a school by the deposit deadline, usually May 1.

[See how schools estimate your need for financial aid.]

I'm happy to report that these spring surprises are going to become far less common. At least that is the hope of the federal government, which will soon be requiring colleges and universities to post cost calculators on their websites.

These so-called net price calculators will be incredibly valuable because they will allow students and their parents to learn in advance what the price of individual colleges will be for them. As I mentioned in a recent blog post, these net price calculators will determine the price for a family after any grants are subtracted from the sticker price.

These calculators, which must be installed by late October, aren't going to be perfect. You will increase your chances of using them effectively, however, if you understand some of the issues facing users and the colleges that are creating the calculators.

Here are four things you need to know about net price calculators:

1. Some families are already ignoring the calculators: That's been the experience so far at Albright College in Reading, Pa., which was one of the early adopters for these calculators, launching its version in February 2010. "Getting people to use it as a tool in the financial aid process has been the most difficult thing," says Gregory Eichhorn, Albright's dean of admission.

Tip: This is a no brainer, folks. Use the calculators!

[Read about other tools to aid in the college admissions process.]

2. Calculators can be too simple: Everybody in the higher ed world wants to produce accurate calculators, but the most accurate ones will require the most inputs from parents.

Some higher ed insiders have worried, however, that complicated calculators will discourage families, especially low-income parents, from using the tool. That's a big reason why the calculator template offered by the federal government asks fewer questions than many calculators created by outside firms or within the schools themselves.

A problem with the federal template is that it doesn't include merit aid calculations, observes Pat Watkins, director of financial aid at Eckerd College in St. Petersburg, Fla. More affluent families, who use calculators reliant on the federal model, might assume that they have to pay full price even though their children might qualify for merit (non-need-based) aid that's given to wealthier applicants.

Tip: Ask schools if their calculators include merit aid.

[See 10 schools where merit aid awards are common.]

3. Families can make mistakes: "There are a lot of opportunities for it to get confusing," says Helen Nunn, director of financial aid at Susquehanna University in Selinsgrove, Pa. For instance, a family may mistakenly include a teen's writing SAT score even if a school only wants the verbal and math scores. This would inflate the overall SAT score, which could produce an overly generous—and misleading—award.

Tip: Be careful when inputting your information. If the outcome seems wrong, try again.

[Read 7 ways to improve SAT and ACT scores.]

4. Side-by-side comparisons could be difficult: "There are so many different calculators— from very basic ones to sophisticated ones—that families won't be comparing apples to apples," Albright's Eichhorn says. "I worry that parents will use their estimates as a negotiating tool without having accurate information comparing one college to another."

Nunn expressed concern that the calculator will mistakenly "take the place of coming and talking to financial aid folks and getting real information."

Tip: Don't use the cost calculators exclusively. You'll also want to talk with staffers in the college financial aid offices.

[Get more tips on how to pay for college.]