Calculate The Real Cost Of College Debt, Today

Don't break your piggy bank with student debt.

Used cars and college degrees. One has a lot of mileage, the other offers a buyer more. But why sign upon the dotted line before giving the tires a nice, solid kick? If they’re old and flabby, it could be an additional, and unforeseen, headache later.

Recently-accepted college students, and their families, face a similar risk comparing financial aid offers from competing colleges side-by-side. Fortunately, a recent mandate issued by the federal Department of Education gives college families a tool that teases out the fine print from their financial aid packages – the net price calculator.

The Higher Education Opportunity Act mandated U.S. colleges and universities upgrade their webpages, by Oct. 29, 2011, to include space for the technology. Essentially, net price calculators (NPCs) determine the approximate “net price,” or the amount a certain college might cost after scholarships and grants are applied. Prospective applicants then see the amount of money to be earned, saved or borrowed by them to pay the difference.

But despite the best intentions, not all NPCs are created equal.

Schools granting merit aid, based upon academic, athletic or artistic achievement, as opposed to need-based aid, may withhold these funds until admissions deadlines are up. High school seniors applying ‘early decision’ to institutions defined by their merit-based aid programs, such as the Ivy League, the Big Ten Conference or a prestigious conservatory, might find themselves stymied if they’re accepted straight away. Judging panels might not be able to allot merit aid until an entire class gets seated, and they’ve had the ability to evaluate every GPA, SAT score or audition. Under these circumstances, it’s better to wait until you’re further into the admissions process before you begin crunching numbers.

Concerns have also risen about the erratic number of questions colleges and universities are programming into their NPCs. Simple calculators might have a total of ten questions about your financial background. Parental income, student income, family size and assets are bluntly assessed by the NPC Harvard implemented, spanning a single webpage, with only three fields of drop-down menus. More complex devices could require upward of 50 questions. Parents might also have to involve themselves if applicants cannot respond to questions requiring a copy of last year’s tax return, earnings reports or checking/savings account balances.

Details on the show that, transparency for these NPCs does not always compute.

“Schools lump them together,” explained President Lauren Asher of the Institute for College Access and Success, speaking of the failure at certain colleges to not clearly distinguish the differences between “gift” aid and loans. “You think you have this great big aid package, and zero cost at the end, and in fact, what you’re really looking at is $20-30,000 in loans, plus some work-study assumptions.”

Speaking of the ‘fairly frequent’ rate at which well-qualified students are intimidated into not applying to an elite college because of its high ‘sticker price,’ David Gildersleeve, an Averill Park High School guidance counselor from Averill Park, N.Y., attributed that factor to our fragile economy.

“We have always considered at least two components when talking to our students and parents about ‘reach’ and ‘safety’ schools – academics as well as finances,” Gildersleeve noted. “The NPC’s serve to illustrate what we have and will continue to say about prices. We have used other resources to substantiate our financial advice in the past and the NPC’s are another tool available to help communicate financial information to our students and parents. We are happy that the information is tailored and personalized … They help drive home the importance of thinking as much about finances as many do about academics when determining which schools can be considered ‘safe’ and which are truly a ‘reach’ for individual families.”


Joseph Gentile Expecting the unexpected, ever since my five o’clock shadow started popping up at four, has led me to a richer life managing other people’s money. Three years after completing a communications degree, and a single Statistics class, I defied the odds, and became a financial aid adviser who does math. I might still be at college, but my job has motivated to learn, and report, about developments in higher education from a Millennial’s perspective.

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One Response to “Calculate The Real Cost Of College Debt, Today”

  1. Monica Matthews,

    Parents and students also need to realize that the net price calculators don’t take into consideration any outside private scholarships a student can win. Scholarships can play a HUGE role in how a family pays for college and the more scholarships a student applies for the better. Thanks for this info! :)


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