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
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.