Calculator Tool Estimates the Real Cost of College

The following blog post by Linda Parker, Union College financial aid director, is reprinted here with permission.

How much does college really cost?

That’s one of the biggest questions we hear families ask when deciding where their children should pursue higher education.

Many already understand the importance of financial aid. (Though, in my experience, many don’t realize how much scholarship money is available, particularly at higher-cost private institutions. Families may find that some colleges they thought were financially out of reach may be very affordable.)

But how much aid will a student receive?

The net price calculator – a new financial tool – is helping families assess how much aid they qualify for before they receive official aid awards. It’s aimed largely at incoming freshmen but can be a helpful tool even for current high school sophomores and juniors who are beginning their college search and who are seeking to become informed consumers about their college options. In order for students to reach their academic goals, they also need to have an informed understanding of what their college expenses are likely to be so they can better plan for their college education.

I’m proud to report that Union launched its online calculator prior to the federally-mandated deadline requiring all colleges to offer the tool.  We have implemented a fairly comprehensive approach to estimating net price in an effort to provide useful and accurate information to prospective students.  We were lucky to participate in the College Board’s pilot net price calculator program.

So far, we’ve observed that our calculator – which uses a family’s financial data to calculate contribution, need and aid – is proving accurate. Our estimates are not guarantees, but actual financial awards have come very close to sample awards presented by the calculator.

The most important factor is the accuracy of the data entered by families detailing income, assets, family size and the number of children in college. I advise using tax return figures when possible. Remember –if you put garbage in, you’ll get garbage out.

I believe the new net price calculators will be an excellent tool for students, especially when comparing schools. Families can enter financial data into multiple calculators and weigh estimated aid packages. They might be surprised to see how “expensive” colleges match up with schools that cost less on paper. A school’s sticker price is not its actual cost for all students.

Many students tell themselves “no” to certain colleges based largely on financial perceptions. But net price calculators provide real information for families earlier in the process.  The earlier families know what kind of money a school is talking, the better they can prepare.

The reality is that there is a downside to these calculators. For schools that give a lot of merit awards (non-need based), it will be more challenging to predict who will be eligible, since such decisions are often holistic and not immediately identifiable from a quick Web tool. Similarly, many colleges are not able to meet the full demonstrated need of their admitted students, so it will be harder to estimate what any individual student would qualify for (financial need would not be the only factor). 

Regardless, more information is generally a good thing. Time will tell if people take the time to educate themselves with these tools.

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