Tips to make the most of online calculator of college costs
— -- You're on a flight to Orlando, and the aircraft is full. The midsection of the plane is jammed with middle-school students who are scarfing down all the peanuts. In the emergency exit row, a cheerful retiree shares pictures of his grandchildren. Row 36 is occupied by newlyweds who appear to be warming up to audition for the Mile High Club.
All of these passengers have two things in common: They don't have enough legroom, and they didn't pay full price for their tickets.
The same situation exists at many colleges and universities, particularly private institutions. At most campuses, only a handful of students pay the published, or "sticker" price. The rest receive a mix of scholarships, grants and other forms of financial aid that reduce the cost of attendance.
Starting Saturday, colleges and universities will be required to provide an online calculator designed to give families a better sense of how this process works. The tool is intended to help families come up with an estimate of the actual cost of a particular school — known as the net price — based on their personal situation. Schools can use a template created by the Department of Education or develop their own net price calculator.
Supporters say the tool will encourage families to consider schools they might have otherwise deemed too expensive. The tool could also motivate more families to apply for financial aid, says Linda Parker, director of financial aid for Union College in Schenectady, N.Y. Many middle- and upper-middle income families who may be eligible don't bother to apply, she says.
Still, the tool has plenty of critics. Since schools have a lot of discretion in the types of calculators they offer, families will have a difficult time comparing results, says Kal Chany, author of Paying for College Without Going Broke. Some are so detailed that families may be discouraged from using them, according to the Institute for College Access and Success, an advocacy group.
Tips on getting the most out of the calculators:
•Make sure the information you plug into the calculators is accurate. Inaccurate or incomplete information will result in a flawed outcome. In most cases, you'll need your most recent tax returns. Think of it as a warm-up for the financial aid application, which is more complicated.
•Don't be misled by results that include loans and work-study funds. Some calculators provide one estimate for net price, and another for "upfront cost," or "net cost," which includes student loans and income from work-study, a program that provides students with a part-time job.
TICAS found one college calculator that subtracted more than $33,000 in student loans and work-study aid, resulting in an upfront cost of zero. While the upfront cost estimate may make the college appear more affordable, "Loans and work-study aren't free," says Jerome Lucido, executive director for the University of Southern California's Center for Enrollment Research.
•View the results as a starting point, not the end result. Numerous factors influence the cost of attending a college, and many of them aren't captured in the net price calculators.
