How to Estimate What College May Really Cost

When determining whether a specific college is in your price range, it pays to look beyond the college’s published price to its net price. The difference between the two prices can be dramatic, and it is entirely possible that a college with a high published price may cost you less than a college with a lower published price once grants and scholarships are factored in. Here’s the deal.

The net price is the price that a student pays for one year of college after grants and scholarships have been subtracted from the institution’s cost of attendance. On average, undergraduates received about $8,000 in grants for the 2013-14 academic year, according to a 2014 Trends in Higher Education report by the College Board. Keep in mind, though, that scholarship and grant amounts vary among schools and among students. So, how do you estimate how much a specific college may cost you once grants and scholarships are factored in? With a net price calculator.

Nearly every college and university is required to offer access to a net price calculator on its website that estimates how much attendance may really cost. By entering information about your household and finances into a college’s calculator, you can learn what students in circumstances similar to yours paid last year after grants and scholarships were subtracted from the estimated cost to attend that college.

Because the estimates provided by net price calculators are based on what similar students actually paid, they may help you more realistically compare the affordability of various colleges. But keep in mind that net price estimates are simply that: estimates. The student will need to be accepted for admission before the colleges will let you know the amount of financial aid, including any grants and scholarships, he or she may receive.

An easy way to hop to the calculators offered by various colleges and universities is to start on the U.S. Department of Education’s website, collegecost.ed.gov/net-price, where you can enter the name of a college and generally link directly to its calculator.

while you are on the Department of Education’s website, you may also want to check out their college scorecard tool. With it, you can find out a college’s graduation rate, loan default rate, and how much families typically borrow for undergraduate study at that particular college. You can also enter a field of study or other criteria to help narrow down your choices of potential colleges and universities.

If you have a child approaching college age and price is a factor in choosing a college, take the time to estimate the net price for the colleges you are interested in. You may discover that a college that you assumed was out of your price range is competitively prices with, say, the nearby state college.

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Recipients should not act on the information presented without seeking prior professional advice.

Article published in July/August 2015 edition of Eye on Money.