There are countless articles about the price of a college education. Their chief subject – tuition costs.
Yet many of these articles tend to confuse tuition cost with the net cost of college, which is what you will actually pay for an academic year.
That’s one of the main reasons all U.S. colleges are now required to include a “Net Price Calculator” on their official school website.
While they’re designed to help parents and students estimate the amount of financial aid they could potentially receive from an institution (thus estimating the “net price”), the actual benefit for families is perhaps not very meaningful.
After all of your information is entered, you expect to discover approximately what you might pay per year for any degree a college offers. Net Price Calculators may provide some basic estimates, such as paying in-state tuition vs. out-of-state tuition, living on-campus vs. living off-campus, how much you expect to take out in loans, or how much you can expect to receive in scholarships/grants.
However, it’s what is left out of the calculations that could be potentially risky for your family.
For starters, many of the calculators ask too few questions, which could produce inaccurate numbers for your situation.
Jeff Whorley, president of a firm that creates custom calculators for 45+ colleges, agrees with critics. His company analyzed the federal calculator using 145,000 actual student profiles and found it to be inaccurate 65% of the time!
You also want to keep in mind that schools only have to follow minimum criteria for its Net Price Calculators. In other words, it’s at the school’s discretion as to how in-depth they want their Calculators to be.
For example, many Calculators don’t outright tell you is how much less you will actually pay when scholarships and grants are factored in.
Additionally, families aren’t at all clued into how they can potentially lower their out-of-pocket costs. (Remember, colleges are businesses, too, and it’s not in their best interest for you to know how to lower the cost of attending their institution).
What’s more, Net Price Calculators do not show parents how to pay for these costs without jeopardizing the rest of their overall financial planning goals. (The only option colleges typically give are loan programs, which often times can be an additional revenue source for the college).
Take these calculators with a grain of salt. They are far from being a comprehensive resource. There are a lot more steps that are necessary – yet largely overlooked by the majority of college-bound high school students – when it comes to estimating the real cost of attending a four-year college.