Unless prospective college students know about the potential grants and aid available, the sticker shock of tuition can scare them away from applying. But that is about to change.
This fall, colleges are busy complying with a new federal requirement to have a “net-price calculator” so students can get a better sense of the true cost of attending a specific institution. According to an article today in Inside Higher Ed, while it appears to be a win-win — helping families make more informed financial decisions and allowing schools to leverage the calculators for outreach — some experts are watching colleges as they roll out tools with varying degrees of accuracy and usefulness to meet the late October deadline.
Depending on the school, students type into the calculator information about their family income and academic record to receive an estimate of what merit- or need-based aid they might get and how that translates into a bottom-line price of attending. But schools ask different questions and, therefore, provide different pictures of cost. Sometimes the information is too vague or not institution-specific enough to allow families to make good comparisons, the article notes.
For the consumer, the hope is that the calculators, or financial-aid estimators, will make pricing policies more transparent and perhaps encourage schools to make more aid available to stay competitive. As the Inside Higher Ed piece explains, on average, college tuition was discounted 42 percent in 2010, meaning families are often pleasantly surprised to find that they they often pay far less than the advertised sticker price.
Admissions and marketing officers see the pricing tool as a way to inform students about the affordability of their schools and get contact information from students to use for follow up with recruitment, the Inside Higher Ed article found.
In any case, it will be interesting to gauge the reaction this fall as the first crop of prospective students have this new tool at their fingertips. Families have the 2008 reauthorization of the Higher Education Act to thank for this attempt to demystify the cost of college and provide better information for comparison shopping in what has become huge investment.
A version of this news article first appeared in the College Bound blog.