Colleges Gear Up to Provide Required Picture of Real Costs
Too often, students face sticker shock when they look at the price tag of going to college today. Sometimes, with scholarships, financial aid, and loans factored in, the actual cost to students can be more affordable. Others may hope they'll get more support than they do. It's a huge investment, and, with default rates on the rise, it's important for students to know the "real cost" of college on the front end.
Yesterday, financial aid administrators, gathered at their annual conference in Denver, talked about a new federal law requiring institutions to provide a net price calculator on their websites. The Higher Education Opportunity Act was signed into law in 2008 and includes many new reporting and disclosure requirements. Schools that participate in Title IV student aid have until October 2011 to comply.
Institutions can use a new template developed by the U.S. Department of Education or develop their own, attendees at the National Association of Student Financial Aid Administrators were told in a session by Archie P. Cubarrubia, IPEDS Survey Director, Student Financial Aid National Center for Education Statistics. For the handout from the session, click here.
Private companies, such as StudentAid.com, are starting to offer net price calculator technology services to institutions, as well as services for families that estimate the real cost for specific schools, based on families' individual finances and eligibility for student aid.
"So many families disqualify college because of sticker price—because they don't think it's affordable," says Dave Childress, general manager for StudentAid.com, based in Sacramento, Calif. The cost and confusion around financial aid is one of the biggest challenges that counselors and families face when deciding on a school. StudentAid.com positions itself as offering more accurate, customized cost figures to give a better picture of the price tag before award letters come out late in the senior year for many students.
StudentAid.com charges for its service, but it does provide free estimates for low-income students through its Access for All program. It also offers business-to-business products through its parent organization, Student Aid Service Inc., to help colleges with the transition to net cost calculators.
At the NASFAA conference, panelist Lefter Daku of Virginia Polytechnic Institute and State University discussed the challenges that institutions will face in accurately predicting net price and implementing a calculator. He recommended that institutions be very transparent about the assumptions made when developing a calculator and to disclose this information to students and parents so they don't have unrealistic expectations about the estimates.