Beware the Net Price Calculators!

You may have come across Net Price Calculators (NPCs) on college websites over the past year. Federal regulations require every college to have one on their website by the end of this month.  The intent of the calculators is to provide consumers with  estimates of net price information for prospective and current students. A laudable goal. However, there are issues that consumers need to be aware of.

Issue: The US Department of Education has developed a template for colleges to use which meet the minimum requirements the federal regulations. Colleges and universities are not required to use the federal template.  Institutions may develop their own or use one developed by a third party vendor, as long as the NPCs meet the basic federal requirements. However, the US Dept. of Ed, does not have an approval process for these types of NPCs.

Issue: The NPCs are required to provide the median amounts of grant and scholarship aid awarded to, and accepted by, first-time, full-time degree/certificate-seeking students by EFC range.  It s not uncommon for colleges and universities to have different awarding policies for freshmen and upperclassmen, so trying to estimate more than one year of financial aid costs would be difficult.

Issue: NPCs only estimate need based financial aid awards.  It is more difficult to get realistic estimate of financial aid award for colleges that offer merit aid and performance scholarships.

Each of these issues make comparing estimated costs and estimated financial aid from multiple colleges challenging.   It is important to keep in mind that NPCs are tools that have limitations, but can be used as part of the college planning process. NPCs  do not replace researching colleges, meeting with admissions counselors and visiting colleges.