How Accurate are the Net Price Figures from Colleges and College Navigator?
October 17, 2011
How believeable and reliable are the net price values quoted on the College Navigator web site? My granddaughter is interested in two public universities, one in Wisconsin and one in Minnesota. Each has an online net price calculator. The Wisconsin university is $13,948 and the Minnesota university is $18,318. But on the College Navigator web site the costs are $14,063 and $14,990. A third source estimates the net price at $16,258 and $15,558. Do you think that these numbers are accurate within $2,000? — James O.
Net price is intended to be a measure of a college’s bottom-line cost, the difference between the college’s cost of attendance and the grants available to the student. In practice, however, the net price figures will be more of a ballpark estimate. For example, the net price figures might be based on cost data that is two years old. Net price figures might be suitable for determining whether a college is inside or outside the ballpark of affordability, but not good enough to distinguish between home plate and center field. The net price figures should not be used to compare and rank different colleges.
Every college is required to have a net price calculator on its web site by October 29, 2011. They can either use a template developed by the National Center for Education Statistics (NCES) or they can build their own calculator.
The NCES calculators are simpler, basing net price figures on the answers to only nine questions (age, living arrangement, residency, marital status, children, number in family, number in college, parent income and student income). Colleges that opt to create their own net price calculator usually ask dozens of additional questions to calculate the net price more precisely. There is a tradeoff between simplicity and accuracy.
The net price figures reported on the College Navigator web site are based on the same underlying data as the NCES net price calculator templates. The tabular format helps students and parents quickly see whether the college is affordable and how the net price changes from one year to the next. However, the income bands are broad enough that the student’s actual costs may vary significantly from the average net price. Also, the College Navigator web site presents average net price by income without regard to other variables considered by the net price calculator template, such as the student’s dependency status, family size and number in college.
There are several other potential differences between the NCES calculators and a calculator designed by a college. An important difference is the age of the cost and grant data used to calculate the net price figures. The NCES calculators are based on data that is one or two years old, while the colleges will often use more up-to-date data. Since most students will be using net price calculators in the fall, the calculators built using the NCES template will present data that is two years old (the NCES data will typically be updated in December). The calculators built by the colleges will typically be based on data that is only one year old, since most colleges do not set their tuition rates or financial aid budgets until the spring or summer. Accordingly, the net price figures may differ significantly from the figures reported on a college’s financial aid award letter or the bursar’s bill.