This is a segment of Bautis Financial’s college planning series, which includes webinars, podcast episodes, blog posts and downloadables to aid college-bound students and families in the admissions process. Visit our college planning hub for more valuable resources.
Selecting what college to attend is one of the biggest and most life-altering decisions a prospective student and their family can make. Agonizing through the differences between a long list of schools to make a choice, combined with waiting to see if the prospective student is even accepted, is the definition of stress.
Now, let’s consider that most students and their families are trying to make this decision without knowing how much each college will cost. That’s right: You won’t know what college is going to cost until you or your child receives a financial aid or merit award package in the mail. Even worse, sometimes these offers don’t reach families until the spring, which gives them little time to select a school by the deposit deadline, which is most often May 1st.
Not having advance notice of the price can create tremendous emotional and financial hardships for a family. A child may have their heart set on a school like New York University, but once they are accepted they can learn that the price, after deducting any merit or need-based aid, won’t come close to making the dream school financially realistic.
Parents can be guilted into allowing their children to attend a college they can’t afford. Under pressure, many make rushed and emotional decisions to raid their investment accounts, borrow significantly or vow to delay their retirement plan to make their children happy.
I’m here to tell you that there is a better and less rushed way to evaluate the financial costs of individual colleges before students apply to schools, and before they become emotionally invested in them. Enter net price calculators.
What Is a Net Price Calculator?
Net price calculators are designed to generate personal price estimates tailored to a particular family looking at specific schools. Available on a college or university’s website, they allow prospective students and families to enter information about themselves to find out what students like them paid to attend the institution in the previous year, taking both grants and scholarship aid into account.
Net price, then, is the amount that a student pays to attend an institution in a single academic year, after subtracting financial aid such as scholarships and grants.
When using a calculator, some families will discover that the price of a $55,000 university will likely be $30,000 or $25,000, or even lower. For other families, the cost really will be the full $55,000.
The good news is that every school that participates in the federal financial aid system must have a net price calculator available online. This is practically every school. The bad news is they are usually not that easy to find on the school’s website. I suggest doing a web search for “net price calculator” and the name of the school.
What Documents to Prepare
After working with a few different calculators you will find that they are not all created equal, as they will require different levels of information. The good calculators will require a comprehensive amount of information, much like the expected family contribution calculator. With that said, we recommend gathering up relevant documents before you get started. Some of the required information will include
- The family’s assets
- The family’s income.
- Account balances.
- Tax filings.
Once all of the parent’s and child’s information is added, the calculator will ask you if any federal, state or college grants or scholarships apply.
The results will give you a net cost with estimated personal expense, like books and supplies. You will then see all known grants and scholarships as well as an estimated amount of aid that will be provided by the school itself. Finally, the results will calculate an estimated out of pocket to attend.
The most important takeaway from these results will be how much aid the school itself might award the student. This is especially important because each school will have a different formula when using a family’s EFC to calculate the aid they will award.
Need help determining what schools meet a high percentage of need? Here are the nation’s most generous colleges.
It is important to note that you should use these calculators early but not too early. The EFC calculators can be a useful tool as early as middle school for planning purposes, but that would be premature for this tool. With that said, don’t wait too late as to maximize what you will get out of the information they will provide.
If you have any questions or want to talk about your specific situation, we’d be happy to help. Simply set up a complimentary consultation with our advisors.
Good luck with your search!