STUDENT FINANCE LEGAL ISSUES
Rise of Net Price Calculators by Abigail Seldin & Whitney Haring-Smith
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ollege-bound students and their families often get discouraged by the high sticker price of college, even though many students often receive a “dis-
count” in the form of a financial aid package. In theory, students can use net price calculators to identify their likely cost of attending different institutions – a number that often varies widely among students and one that is often different from the school’s “sticker price.” College Abacus adds clarity to the conversation around college cost. Te Chronicle of Higher Education recently announced that College Abacus has given net price calculators “the Kayak treatment”; much as
Kayak.com created the “search one and done” experience for travel, College Abacus is the one stop search for comparing higher education pricing. College Abacus - now online in its beta version - allows college-bound students and their families to search and compare net prices - tuition and fees minus grant aid - for free across more than 2,500 schools.
Te net price calculator had an auspicious beginning.
In 2008, Congress passed the Higher Education Oppor- tunity Act, which placed new requirements on institutions of higher education. Among other mandates, this legis- lation requires all post-secondary institutions receiving federal funding to build and maintain net price calculators (NPCs) on their websites. Between the passing of the law in 2008 and the implementation of the net price calculator requirement in October 2011, many hoped that NPCs would become the standard for measuring college cost. More than a year ago, former Congressman and college president Bob Clement predicted in the Washington Post that “the nation’s leading financial advice gurus like Suze Orman, Dave Ramsey and Clark Howard will make college net price calculators a new part of the money management wisdom they provide.”2
When the NPC requirement came into effect, 6,600+ schools in the United States - four year universities, com- munity colleges, technical schools, seminaries, cosmetology schools and others - posted their calculators online. Te Department of Education posted a public listing of the cal- culators, both to allow institutions to demonstrate compli- ance through self-reporting and to allow interested parties to access the calculators with ease.3
In theory, institution
websites should generate net price estimates for users prior to application and before submitting of FAFSA. Numerous news outlets, from the Washington Post and US News & World Report to small local papers, reported on the new requirement with excitement and helped to explain the concept of net price calculators to families. Still, adoption remained slow and prospective users felt skeptical. CollegeBoard’s studentPOLL study, conducted between December 2011 and January 2012, revealed that only 35 percent of college-bound high school seniors used a net price calculator during their college search.4
Te same
poll revealed that more than half of college-bound seniors from middle-income ($60K to $100K) and lower-income (under $60K) families continued to rule out colleges on the basis of sticker price.5
When we interviewed college
and guidance counselors during the initial development phase of College Abacus, few had heard of the net price calculator requirement. Some of the counselors familiar with the concept of net price calculators told us that they rarely used the NPCs, as they expected to receive inac- curate estimates; few knew that the NPCs were built in response to federal regulation.
Te lack of both information and access stand as major barriers to a more general embrace of net price calculators. A report recently issued by Te Institute for College Access and Success (TICAS) asserted that “net price calculators
2. DeVise, D. (2011, September 22). Guest post: Get out your net-price calculator. Retrieved October 15, 2012, from College, Inc., Te Washington Post:
http://www.washingtonpost.com/ blogs/college-inc/post/guest-post-get-out-your-net-price-calculator/2011/09/22/
gIQA8XVjqK_blog.html
3. Net Price Calculator Information Center. (2012, March 19). Retrieved October 15, 2012, from Integrated Post-Secondary Education Data System, National Center for Education Statis- tics, a US Department of Education website:
http://nces.ed.gov/ipeds/resource/net_price_calculator.asp#InstitutionsNPCWebAddresses
4. Hesel, R. J., & Meade, D. C. (2012, September 14). A Majority of Students Rule Out Colleges Based on Sticker Price: Students Do Not Take into Account Teir Likely Financial Aid Award and Its Impact on Net Cost. studentPOLL , 9 (1).
http://www.artsci.com/studentpoll/v9n1/index.html.
5. Ibid. 34 NOV/DEC 2012 •
TODAYSCAMPUS.COM College Abacus and the
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