How a Net Price Calculator Can Help You Choose a College – Forbes Advisor
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The cost of college should always be part of the equation in choosing one. After you narrow down your college choices by major career service and where and how you learn best, use the net price calculators on college websites to get a feel for which universities are affordable for your family.
What is a net price calculator?
A Net Price Calculator for Colleges is an online tool that the federal government requires of all schools that offer federal assistance, including student loans, bursaries, and co-op programs. It asks students to enter financial, family, whereabouts, and income information to estimate potential financial aid. Usually the financial aid The estimate is based on the previous year’s scholarships for a student in a similar situation. Remember, however, that in order to be eligible for financial aid you will need to complete the form Free Application for Federal Student Aid (FAFSA).
Net price versus sticker price
The net price of a college is what you actually pay. The sticker price is what the price would be if you didn’t get any financial assistance. Say that a school is esteemed attendance fees including tuition, fees, books, room and board and other expenses is listed on its website at $ 60,000 per year. You receive $ 20,000 in Scholarships and subsidies. Your net price is $ 40,000. Sometimes schools also subtract student loan the amounts. Add them again. When you compare schools, you want to compare the amount you will pay in total, including what you are borrowing and paying back.
The analogy with the sticker price comes from when you buy a car. There is a sticker in the window that tells you the price is X dollars. Then you can get some discount and negotiate the lower price. The actual price you pay (the net price) can be several hundred to several thousand dollars less.
Where to find a school’s net price calculator
You can find a school’s net price calculator in two places: on the financial aid page of the school’s website and on the Net Price Calculation Center website for the US Department of Education. The net price calculator allows you to search almost any school with a net price calculator, and you will be redirected to the school or other suitable website. For example, when you select the University of North Texas, you will be taken to a website to enter your information for up to three Texas schools at a time.
How to use a college net price calculator
Go to the school’s website and follow the instructions for what you need to enter. You can use an approximate income, as nothing you enter is recorded data that the school would use to make decisions. However, it is more accurate if you have financial information nearby, such as a recent tax return, as well as bank and investment account statements. Financial statements are useful when questions about assets are asked.
You will likely also enter the grades, test results, type of accommodation you will be staying in, and the number of people in your household. The calculator can ask a dozen questions.
To note: Income tax returns can help you estimate the financial aid you might receive based on the financial data you report to school through the FAFSA Where CSS Profile. However, if your family’s income has declined this year, you may have the option to submit a special circumstances form. This additional form is used to report changes in financial situation to school financial aid offices. When using net price calculators, enter your financial data based on that year’s income if there has been a significant drop in income.
Create a list of net calculator results for top school picks
List your top school choices and approximate net cost on a piece of paper, spreadsheet, or handout. Take notes if you answered the questions on one calculator differently than on another. For example, you might have chosen to live with parents in one school and off campus in another.
Benefits of the net price calculator
While net price calculators are a great place to start, they are just a starting point for comparing college prices. You will want to know more from the school by requesting detailed information financial aid questions.
Nonetheless, they are useful. Here are the most important benefits of using a net price calculator:
- It’s an easy way to start comparing schools by cost. You can get an estimate for 10 schools in about an hour.
- It takes less than five minutes to get an estimate of the cost of attending college.
- You can play around with the numbers and see if taking a SAT or ACT test again and increasing your score could increase your financial aid.
- You might be inspired to apply to private colleges that offer a lot of financial aid that you previously thought out of reach. Private schools often have more endowment money. Also, those who can afford it can pay more in tuition, freeing up the school to give more money to students who cannot afford tuition.
Disadvantages of the net price calculator
A net price calculator can never give you the full picture of what college will cost. Here are some of the main drawbacks:
- Schools do not always use the same guidelines for financial aid terms. For example, grants and scholarships are often used interchangeably with a variety of different eligibility rules, which can make it difficult to compare actual costs.
- A first year cost estimate may include scholarships and grants that are not renewable in future years.
Last year may not reflect this year. The net price calculators are based on financial aid from previous years. The same amount of money may not be available this year.
- Accuracy can fluctuate from calculator to calculator, making it difficult to compare actual college costs.
Net price calculators as a starting point for comparing college prices
After inserting your financial, dynamic family and academic information into a net price calculator, call the school for clarification on anything that is unclear. For example, were student loans deducted from the amount you owe?
Next, ask what information the net price calculator is based on and how accurate it was in predicting financial aid for students last year. Ask how accurate the school expects the calculator to match next year’s financial aid offers.
Write your notes on the piece of paper or document you created. You can also insert numbers in online tools to compare college offers.
Net Price Calculators provide valuable information, but they shouldn’t be the only tool you use to help you estimate what a college might cost you. Plug your financial, academic, and family information into the calculators at your top school picks. Do not avoid any college because of the price of the sticker. It is only the net price, the price after deducting financial assistance, that matters.