Colleges Need Better Net Price Calculators, Report Says

Figuring out the true college price before you enroll can be confusing – and one of the best tools to help you do that could be flawed, according to a new study.

Net price calculators are meant to give students and their families a true picture of what they will pay for a given school: by taking the total cost of attendance, including related expenses such as accommodation and supplies, and subtracting grants and scholarships. The resulting net price can vary widely depending on family income and school performance.

Colleges have been required to offer these calculators on their websites since 2011, and they are often cited by financial experts as an essential tool in college planning.

But about half of the calculators examined for the study, from the University of Pennsylvania’s Graduate School of Education, the prices declared on the database dating back at least two years. Some colleges have classified loans – which must be repaid – as “aid,” alongside grants and scholarships. Others have calculated a cost estimate using only tuition, fees, and room and board, although the federal definition also requires the addition of living expenses and supplies such as books.

“Students try to compare information between institutions and it’s difficult when they all publish different things,” says Laura Perna, co-author and executive director of the Alliance for Higher Education and Democracy (AHEAD) at the University of Pennsylvania.

What’s wrong with calculators?

The researchers looked at 80 colleges, a mix of private and public institutions, where at least 25% of students are Pell scholarship recipients and with selectivity ranked as “competitive” on the Barron Admission Index.

One of the most common issues faced by the AHEAD team was reliance on old price data. When the team collected information in the spring of 2018, 24 of 78 colleges with calculators were using 3-year-old data and seven colleges were using 4-year-old data. During that period, average net attendance prices increased by about 8%, which works out to $ 1,200 at public colleges and $ 2,000 at private colleges, according to the College Board.

Some of the more glaring mistakes were less common: one college, for example, included Parent PLUS loans in the outflow. With PLUS loans, you can borrow up to the full tuition fee, so including them in the aid calculation reduces the amount the student is told is left over to $ 0. Another college said students could cut costs by “spending wisely” on food.

Perna says his team were also surprised to find that there were often no differences in the price estimates when they filled out the calculators posing as a dependent student, who by definition can have access to support. financial parents, or an independent student, who would not.

This suggests that “these estimates may not be as individualized as you hoped,” she says.

This is not the first time that researchers have questioned the reliability of some of the calculator’s estimates. In 2016, for example, a team of researchers from the University of Pittsburgh compared the estimates from the net price calculator with actual financial aid letters from low-income students at seven colleges. More than half of the colleges had a grant range of over $ 4,000, meaning the calculator’s projections could be thousands of dollars too small or too generous.

Even with their flaws, no one is calling for the removal of calculators.

“It’s not perfect,” says Bob Freund, director of the Pennsylvania College Advising Corps. “But it’s so much better than when we had nothing.”

Before colleges were required to offer net price calculators, families had little more than word of mouth to determine what a college might end up costing before applying.

The Freund-led program places counselors in underserved high schools for the sole purpose of focusing on college counseling. Advisors work with students from the exploration phase in college, through the application phase, to the decision period. And when counselors talk about the best fit, the net price is almost always the determining factor, especially for students from low- and moderate-income families, says Freund.

This is why net price calculators are so important. If students don’t have reliable and early information about the most affordable colleges, they can’t apply to the right set of schools.

Janice Sann, of Middletown, NJ, discovered the Net Price Calculators late in the game. Her son, currently in his final year, had already started applying when she heard about them in a Facebook group hosted by Road2College. Although she found the estimates to be reliable – the Whitman College in Washington estimate was only $ 40 on the financial aid her son received – the rest of the group did not have such rosy experiences. . They were frustrated by the large variances in their projections or their merit assistance issues due to more complex tax situations, such as owning a small business.

Until a significant number of college calculators are working, it weakens the overall power even of the colleges that have a powerful tool. Students cannot take reliable, apple-to-apple estimates from college to college.

What can we do?

Noelle Markle works as a college counselor at two high schools in Huntingdon County as part of the Pennsylvania College Advising Corps.

She recommends calculators for her students and parents, and has seen them work as expected, as when one of her high-performing students was overjoyed to learn that, with generous help as needed, Franklin & Marshall College would earn him about $ 10,000. , despite its sticker price of $ 50,000.

But Markle says she’s seen calculators a few years behind, and answers questions from students who don’t understand why some calculators ask about their GPA or test scores while others don’t. She would also like the source of the grants to be better explained, so families can understand what contributes to their results and students have an idea of ​​the criteria needed to actually receive estimated grants.

Much of this overlaps with the policy suggestions that Perna’s team recommends in their paper. They advocate updating the US Department of Education’s free calculator model to disaggregate the cost of attendance by major and separate grants by source. Outside of federal action, the authors say colleges should do better, for example, explaining that loans are optional and must be repaid, and making sure the direct cost calculation is based on current data. .

And one of Perna’s main recommendations, that colleges should clearly and prominently display the net price on the calculator’s results page, was included in legislation presented to the US Senate this week.

In the meantime, if you’re a college student or the parent of a college student soon to be entering college, take this advice: use calculators early and often, Sann says. When you do, make sure you’re using up-to-date income, taxes, and assets. The results cannot be correct if the information used is not correct.

If you’re doing a comparison between colleges, watch out for non-billable expenses like supplies and transportation. These are estimates, and some colleges will give generous ones, while others will give them at the lower end of the scale, Freund says.

And finally, when you get results, make sure that the estimate provided to you includes tuition, room and board, fees, personal expenses, books, and travel. This total less grants and scholarships is your net price, not loans.

“(They) are a step in the right direction,” says Freund. “Before the net price calculators, parents were totally blind to what the cost could be. “

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