Starting Oct. 29, the nation's colleges and universities must have a net price calculator installed on their websites.
These calculators, which were mandated by Congress, should provide much-needed transparency in college pricing. While college tuition keeps climbing, about two thirds of students receive grants and scholarships that cut these costs. Knowing that price tags are meaningless, however, doesn't help a family that's trying to figure out what they can afford before they apply to schools.
To learn more about net price calculators, here is a post about these new tools.
While these calculators have been eagerly anticipated, they aren't without their controversy. A major source of conflict is just how complicated these calculators need to be.
The Institute for College Access & Success has been quite vocal in its advocacy of net price calculators that are not complex. The nonprofit is urging colleges and universities to make the calculators as easy as possible by limiting the number of required questions.
Here is the organization's reasoning, explained in its report called "Adding It All Up: An Early Look at Net Price Calculators":
Asking a large number of difficult questions may discourage students and families from completing the net price calculator, undermining the goal of providing early awareness of affordability. Net price calculators are intended to provide early estimates to guide students' and parents' decision-making and should not sacrifice usability to replicate the college's entire financial aid process."
The nonprofit is also urging colleges to design their calculators to allow parents to provide less than precise numbers. In the same report, the organization made this argument:
Locating family income or home value within discrete categories would be less daunting and labor intensive than providing exact numbers."
I asked executives at Student Aid Services, the largest creator of net price calculators, what they thought of the argument that simpler is better.
Student Aid Services has created 574 net price calculators so far and among its clients are Yale University, Cornell University, Skidmore College, Wesleyan University, Williams College, Fordham University, University of Oregon, and the University of Vermont.
Student Aid Services has calculated that calculators that ask fewer than 20 questions are going to be consistently unreliable for most students. The company has concluded that the simplest calculators, which use the federal calculator template, are going to produce the wrong expected family contribution the majority of the time.
[Get more information on how to pay for college.]
Calculators that ask more than 20 questions will be "fairly reliable," according to SAS, but the ones that ask 30 to 40 questions will be the most reliable.
"If you are getting a calculator that asks eight or 10 questions, it does not capture enough information to treat you or your family's circumstance with enough depth to give you something you can rely on," argued Jeff Whorley, SAS's president.
I haven't found anyone who would disagree that the most accurate calculators are going to be the custom-built ones. It's been estimated that 1,100 to 1,300 schools out of more than 6,800 postsecondary institutions will use custom-built calculators that are going to include more questions. Competitive colleges such as the Ivy League universities, state flagships, and private colleges are the ones most likely to have chosen this route.
[Read more about net price calculators.]
Of course, SAS is in the business of creating the more sophisticated calculators, but I think its position makes the most sense. Why create calculators that generate faulty answers in the name of simplicity? Yes, some parents will have trouble using the calculators, but colleges can provide help to those requiring it. The whole purpose of the net price calculators is to give families a heads up on what a particular college will cost them. If the answers are questionable, what's the point?
To dumb down the calculators out of concern for some parents' ability to navigate them would be like requiring all bicycles to be sold with training wheels because some people don't know how to ride bikes. Frankly, it makes no sense.
What do you think of the argument that simpler is better?