One of the most valuable tools I have found for estimating how much it will actually cost you to send your child to a particular college is the Net Price Calculator. Most colleges are required to post a link to a Net Price Calculator on their websites. It is usually found in the Admissions section and often will be on the page that displays the school’s tuition and fees. After running Net Price Calculators on several different schools, I was surprised at the differences. Among schools with similar tuition and fees, the bottom line price they were forecasting based on the same parent and student financial information varied greatly. For example, some schools project significant school “grant” money that is not based on merit and does not need to be paid back. Some schools include merit scholarships in the Net Price Calculator and some do not. Make sure you read the fine print displayed along with your net price.
Do not take the Net Price Calculator’s results as a sure thing. The actual offer from a school could be higher or lower based on their review of your child’s total application, grades, test scores, essays, interview, etc. I think it just helps to provide a comfort level. You will either view the results for a school and think, “There is probably no way we will be able to afford this one,” or “Wow, this school could be in the running.”
Before you get started on a Net Price Calculator, you will want to gather a few things:
- Last tax return you filed
- Last tax return your child filed (if applicable)
- Your account balances for any non-retirement accounts including checking, savings, mutual funds, stocks, etc.
- Your child’s balances for any accounts held in his/her name
- Balance owed on your home (some schools ask, others do not)
- Approximate value of your home
- If you own a business, you will need to estimate how much it is worth
The College Board website hosts a Net Price Calculator that many schools use. The beauty of this is that you can save and re-use all the basic information from school to school and you will only need to answer any questions that are specific to a certain school.
The Net Price Calculator can really help you put things in perspective. For example, higher income earners often hear things from other parents like “Don’t even bother filling out FAFSA. You’ll never qualify.” This isn’t necessarily true. As I said, there is a vast difference between schools when it comes to financial aid. Some schools claim to meet “100% of a student’s need.” Of course, they never define exactly how they assess “need.” That’s what can make the whole process tricky. Schools may “magically” come up with more grant money for a good student who is on the fence between schools and is looking for the one that provides the best deal.
If your child has a list of potential schools, go find the Net Price Calculators for those schools and try them out. Come back here and leave a comment to let me know what you found. Was your net price around what you thought it would be? Were there any surprises?