College Costs: 3 Unintended Consequences of the Net Price Calculator

By Wendy David-Gaines

college costs net price calculatorThere are many ways to estimate college costs but the most accurate relies on realistic factors to make a successful college list. Good intentions can lead to unintended consequences and this is what is happening with the new Net Price Calculator (NPC) mandated by the federal government to be available on a college’s website by October 29, 2011. Projections can be off by thousands, hindering the making of a successful college list.

Already appearing on many college sites, prospective college students and their parents are invited to estimate their college costs by entering data. They can use this financial info to determine whether or not the school remains on the college list and the student should apply for admission.

The basic Net Price Calculation is:

Price of attendance – estimated financial aid = out-of-pocket college costs

Calculation problems occur because there is no uniform NPC that all schools use. Additionally the price of attendance underestimates all college costs to the family by excluding hidden costs. Financial aid estimates are off because the actual amount will be determined by filing one or more financial aid forms such as the FAFSA that are required by the college. When both factors of an equation are wrong, families can’t expect the result to be accurate.

Here are 3 unintended consequences that occur when students base their college search around the Net Price Calculator:

1. Excluding the right fit colleges.

There are high priced colleges that meet 100% financial need of their students. If the NPC calculation is off, it may look like the college is unaffordable. Excluding colleges (that otherwise may be a good college match) based on price without taking into account their financial aid policy can mislead families about out-of-pocket college costs.

2. Including the wrong fit colleges.

Including colleges based on price alone can raise college costs in the long run. If a student isn’t happy, it can’t be expected that they will do their best and take full advantage of this educational opportunity. Failing or dropping out can lead to a waste of time and money. When students transfer to other schools they risk not having all their academic credits transferring over and have to spend additional tuition money making them up.

3. Not taking into account temporary tuition discounts.

Colleges can offer scholarships and grants from their own funds to supplement federal and state financial aid, to reward students for their merit, (academic, athletic, artistic, musical, leadership abilities) and to attract students to their campus. However, the NPC does not disclose any strings that may be attached to these awards. What happens if the student fails to maintain a certain grade point average or stops playing on the team? College costs have been rising at the rate of 5% a year. Will scholarships also rise to keep pace with the increased costs? Is the scholarship renewable every year of college attendance?

Wendy David-Gaines, author of Parents Of College Students survival stories, is known as POCSmom. She writes and lectures about the college process from forming a college list to attending college graduation. Wendy is also a College Insights expert on College Expert Panel. For more about POCSmom Wendy go to for links to her blogs, Twitter, Facebook, LinkedIn, and Google+.


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