I was just corresponding with some fellow educational consultants about financial aid and net price calculators. For those of you not familiar with the term, a NPC is a very good tool used to determine how much a family would be paying for college. You can find NPCs in all – or almost all – college websites, in the financial aid page. You plug in your financial information and…tada! It spits out what you will pay for college. However, every tool has limitations and it might be useful to know what those are. My colleague Jeff Levy summarizes his thoughts here:
“My experience with net price calculators is that they are a good way for families to learn generally what a set of four, five, or six colleges might cost them. I don’t, however, think they are necessarily an accurate predictor of what any specific institution might cost them because so much depends upon the applicant pool the candidate is in. NPCs are using, at best, past data to inform their results, but they are not using current applicant pool data that financial aid administrators and enrollment folks are extensively relying on as they build their class and build their financial aid packages, applicant by applicant, simultaneously ensuring that they are meeting their enrollment revenue goals.
I am also usually not a proponent of using financial reasons to pull out of the ED contract, even though there is nothing unethical about doing so. Imagine a student is admitted to their ED dream school, but the award at this need-blind school that meets full need is $5K short of what the NPC predicted. For a family with an EFC of $18,000, an additional $5K annually is a lot of money, probably making the school unaffordable. What does a parent tell their child on December 20 when they receive this great news about their acceptance and heartbreaking news about their award? “We will negotiate with them,” the parent says. A likely response from the financial aid office, once they reopen after the holidays, is, “We have met your full need and are unable to increase your award.” Does the parent then tell this child that she must turn down the offer, not knowing for at least three months if she will get admitted at her selective RD schools and if she does get admitted whether those financial aid offers will be competitive with the one they are turning down?
Guiding families wisely requires that we understand how important a factor cost is to them, and helping them understand fully the pros and cons of going the ED route.”
Questions? Let’s chat!
Founder, Weil College Advising, LLC