Using Net Price Calculators In Your Kid’s College Search

Using net price calculators in your kid’s college search is essential to finding great deals. I originally posted most of the information below back in 2012. It is still as timely and important as it was then.

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, 529s, 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

Even easier than hunting for the net price calculator on each school’s website, 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.

After having been through multiple college searches with my own girls and after learning so much about the college search process in conjunction with this website, I have one more recommendation to add to what I published back in 2012. Play around with a school’s net price calculator to try out different scenarios.  

1. Try to simulate what your financial picture will look like over the 4 years your student will be in college. This is especially helpful when you have more than one student in college some years and only one other years. While merit-based aid should stay the same over the 4-year period (assuming your student meets any required GPA minimums), need-based aid is calculated on a yearly basis and will definitely be impacted by changes in your income and investments.
2. If the net price calculator asks for your student’s GPA and SAT or ACT score, try out a variety of entries. This will show you where the different levels of merit aid fall.  For example, you might find that a 3 point increase in your student’s ACT score will greatly increase the amount of merit aid he or she is eligible for.

The bottom line is that the net price calculator is a tremendous tool to help assess where you will stand financially with respect to a specific college in your kid’s college search. Make sure you use it for each school your student is interested in, early in the process, so that you can whittle down to a list of schools that are potentially financially viable.