Parent College Coach Tip #31: Beware the Net Price Calculators
Parents and students are beginning to evaluate their college choices as school begins, especially the seniors. One of the most important factors to look at is the cost of attending the college. Since 2011, colleges are required by law to have net price calculators on their websites.
What is the net price calculator?
According to the National Center for Education Statistics, here’s an explanation of what the calculator is supposed to provide parents and students:
In accordance with the Higher Education Act of 1965 (HEA), as amended, as of October 29, 2011 each postsecondary institution that participates in the Title IV federal student aid programs is required to post a net price calculator on its Web site that uses institutional data to provide estimated net price information to current and prospective students and their families based on a student’s individual circumstances. This calculator should allow students to calculate an estimated net price of attendance at an institution (defined as cost of attendance minus grant and scholarship aid) based on what similar students paid in a previous year. The net price calculator is required for all Title IV institutions that enroll full-time, first-time degree- or certificate-seeking undergraduate students.
Sounds great. Except for this next paragraph:
Institutions may meet this requirement by using the U.S. Department of Education’s Net Price Calculator template or by developing their own customized calculator that includes, at a minimum, the same elements as the Department’s template.
Not all net price calculators are created equal.
CostofLearning.com recently released research findings assessing the accuracy of more than 100 well-known public and private college net price calculators. For this research, Cost of Learning used the net pricing data the universities submit to the Department of Education’s Integrated Postsecondary Education Data System (“IPEDS”) and compared that to the data found on each college’s net price calculator.“This is the first time anyone has merged these two data sources and the results are surprising,” said Jimmy Becker, CEO and Founder of Cost of Learning. “Unfortunately, some of these calculators aren’t providing accurate information.”
The findings show state universities seem biased in favor of being conservative and over-estimating the net price of college while private colleges seem biased in favor of under-estimating prices. In some cases, these private colleges are under-estimating their pricing by thousands of dollars compared to the actual reported IPEDS data. You can see the results on their blog for a full list of universities and the data.
Parents beware when using the net price calculators on the college websites. If you want accurate pricing, visit CostofLearning.com where you can accurately estimate net price for more than 1,500 college and universities.