What a Net Price Calculator Does and Why It’s Important

A common mistake that can be avoided with adequate research is applying to schools that a student or student’s family cannot afford.  This is completely preventable with a not-so-fancy tool called the net price calculator.

What is “net price”?

Let’s first talk “net price.”  The net price of a college is considered the out-of-pocket cost - including student loans - you’ll actually be paying.  This is different from “sticker price,” which is the publicized cost to attend that school.  In short: Net Price = Sticker Price - Aid.

Every college is legally required to have a net price calculator on their website.  For some schools it’s fairly easy to find; for others, it may be a few clicks into their website.  An easy way to find it is to Google “‘name of university’ net price calculator.”  You can also utilize this website to search all net price calculators. An average net price calculator may take approximately 20 minutes to complete.  It involves entering information such as income, taxes, and assets to help determine the most accurate net price for your family.

So, why is a net price calculator so important?

In many instances, your family won’t be paying the sticker price for college.  Students will often receive some sort of scholarship or merit aid that brings the cost down.  This can be anywhere from a few thousand dollars to tens of thousands of dollars!  Many of those private schools you may have immediately crossed off the list offer quite a bit of need-based aid or merit aid that will bring the sticker price down to something that may be in your budget.  You won’t know unless you fill out the net price calculator.

Keep in mind that the outcome of the net price calculator isn’t the exact amount you’ll pay.  Scholarship amounts and merit aid offerings may differ from year to year, and tuition may increase between the time of you filling out the form and your student attending college.  You won’t know the exact cost down to the dollar until you get the bill, but this is by far the most accurate way to estimate your cost.  

It’s also important to note that not all net price calculators are created equal.  Some colleges have really done well with building out their calculators and have made them as accurate as possible, while others have done the bare minimum.  As an example, housing may be included in the cost on one college’s calculator, but not on another’s, causing one school to look more expensive than the other.  A college should also not include student loans in their calculation, as those need to be paid back, but some colleges might.  It’s important to analyze the results and ensure you’re comparing apples to apples.  Net price calculators aren’t perfect, but they’re as close as you can get before receiving your first bill.

Use the net price calculator tool to help your student build out their college list.  It is a waste of time and money (application fees, anyone?) and not worth the disappointment upon receiving an acceptance letter to have to turn it down due to funds.  Affordability is paramount in creating a well-balanced list!