College is expensive. Fortunately, most students pay less than a college’s published price by taking advantage of the financial aid that’s available to them. Rather than looking at published prices when researching colleges, students should focus on net price — the real cost of attending.
A Net Price Calculator (NPC) is a computer program that helps families estimate the affordability of a college. NPC’s ask a number of questions about the family’s financial situation and, in many cases, also ask about the student’s academic record. The purpose of an NPC is to give the student a good idea of what the actual price of a particular college will be for them.
The majority of colleges have developed or adapted their own NPC’s and make them available on their websites. Many colleges have chosen to use a template provided by the College Board and to modify it as they see fit. Links to the NPC’s of more that 200 institutions, including some of the most elite, are provided on the College Board’s website.
Using an NPC
When a user links to the NPC of a college from its website or via the College Board they are asked to acknowledge that they understand the limitations of the NPC. For example, her is the preface to the NPC for Catholic University in Washington, DC.
“Please read. This calculator is intended to provide estimated net price information (defined as estimated cost of attendance – including tuition and required fees, books and supplies, room and board, and other related expenses – minus estimated grant and scholarship aid) to current and prospective students and their families based on what similar students paid in previous years.
“By clicking below, I acknowledge that the estimate provided using this calculator does not represent a final determination, or actual award, of financial assistance, or a final net price; it is an estimate based on cost of attendance and financial aid provided to students in a previous year. Cost of attendance and financial aid availability change year to year. The estimates shall not be binding on the Secretary of Education, the institution of higher education, or the State.”
A short version of the preface might be, “Don’t blame us if we’re wrong.” The NPC’s of all colleges include similar disclaimers.
When a user clicks on the link, they’re taken to the college’s NPC landing page. Among other things, this page includes information about average net prices in past years. For example, below is the information from Catholic University:
“Over the past three years, the average cost for first-year students to attend Catholic University was $33,492. Merit-based academic scholarships have ranged from $13,000 to $30,000 and need-based grants have ranged from $1,000 to $40,000. In 2020-2021, 95% of our full-time beginning undergraduates received grant/scholarship aid.”
Colleges also provide additional information about their NPC. Catholic University states the following:
“As you use the calculator, please remember:
- This is not an application for admission or financial aid.
- The results will only be as reliable as the data you provide.
- The net price calculator will only give you an estimate of your net price and aid eligibility. The financial aid office has the final word on your financial aid award.
- Federal Work Study estimates are not funds that reduce direct costs but do so in the calculation as a valid Federal aid program.
- You must complete the Free Application for Federal Student Aid (FAFSA) as soon as possible after October 1st of the year you plan to attend college.”
The Reliability and Accuracy of NPC’s
Some colleges strive to make their NPC’s as accurate as possible, but others do not. Users of NPC’s should be aware that colleges don’t necessarily provide an NPC because they want families to know all about their prices. They provide them because they are required to by Federal regulations. To be compliant with the regulations, an NPC must:
• Factor in the Cost of Attendance (COA), which includes tuition, fees, books, room, board and other expenses.
• Ask a minimal set of questions to determine the student’s dependency status and approximate Student Aid Index (SAI).
• Include median amounts of grant/scholarship aid given to full-time, first-time degree-seeking students by ranges of SAI.
(Note: SAI was formerly known as Expected Family Contribution)
Because college is expensive, many college administrators think that it’s in their best interest to provide a simple NPC that will encourage parents to be confident that they can afford to send their student to the school. Many colleges prefer to give parents just enough information to satisfy regulations without scaring them away because administrators seek to maximize the number of applications that they receive. The problem with such a minimalist approach is that some (but not all) NPC’s give families an estimate that is misleading if not useless.
Colleges are free to design their NPC’s as they see fit as long as the Federal requirements are met. Although they provide disclaimers such as the one above for Catholic University, few of them disclose the assumptions that underlie their calculations. To obtain a reliable estimate, an NPC must incorporate all of the variables that affect cost. The NPC needs to ask users in-depth questions about the family finances and the student’s academic record. Some colleges are conscientious about this but others are not. A study by the University of Pennsylvania found that the number of questions on college NPC’s ranged from 8 to 28. The more questions asked by an NPC, the more precise the result can be.
Users should be aware that some colleges strive to make their NPC’s useful but others actually prefer one of substandard quality. Typical distinctions are noted below:
- Colleges that take their NPC’s seriously include all aspects of COA and use up-to-date, accurate data; others exclude room and board, fees and/or other expenses, or use old data.
- Colleges that take their NPC’s seriously use detailed grant/scholarship information on students; others only include Federal grants and don’t ask questions about the student’s academic record. This prevents users from receiving merit scholarship information.
- Colleges that take their NPC’s seriously emulate the FAFSA by asking extensive questions about family finances to help estimate SAI; others do not ask such questions.
To complicate things further, college NPC’s are unique, even those based on the same College Board template. This make it difficult for a family to compare the net prices of colleges in an “apples-to-apples” manner.
Summary
At most, an NPC provides only a rough estimate of a college’s costs. Even the best of them don’t provide a unerring forecast of the actual price that a student will pay. The NPC cost will rarely be the same as that received on a college’s Award Letter sent to an admittee.
If financial aid is substantially lower than the amount indicated by a college’s NPC, the student may wish to appeal the award by politely requesting that the college reassess it. They will not retract a student’s admission simply for making this request, so there’s nothing to lose by asking.
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