By Bob Rothe, CFP®
For the 2017-2018 school year, the average cost of college tuition ranged from $9,970 for an in-state public school to $34,740 for a private institution. (1) While that may not sound like a lot, it doesn’t include room and board or other expenses, like books. So, the overall cost of college for most students is actually a lot higher.
This figure also fails to take into account financial aid. For example, if you look at Harvard’s website, they estimate a tuition of $50,420, room and board of $17,160, and other expenses of $4,070, for a total annual cost of $71,650. (2) However, 70% of their students receive some form of financial aid; about 60% of their students receive need-based aid and only pay around $12,000 a year; and 20% of parents don’t pay anything at all. (3)
So, how can you figure out what college actually costs? If you have a high schooler with big dreams, how do you know how much it will cost to fulfill those dreams?
What Are College Net Price Calculators?
It is clear that simply looking at the published cost of tuition for a school is not enough. There are multiple fees and expenses that add up to create the true cost, which can then be lowered by financial aid. Unfortunately, each school awards financial aid differently, so there is no one answer or clear way of knowing what your student will be eligible for.
This is where college net price calculators come into play. Each school has its own college net price calculator, a helpful tool for estimating the true cost of college, taking into account tuition, fees, room and board, other expenses, and financial aid. If you want an accurate picture of a school’s affordability, the net price calculator is the way to go. You can find your school’s net price calculator by visiting their website and typing “net price calculator” into the search bar.
What Information Do You Need To Use A College Net Price Calculator?
Because the net price calculators estimate financial aid, you will need to input some personal information in order to get an accurate estimate. Each student’s situation is different, so the calculator will need your particular information in order to know what aid may be available to you. Some of the information you will need to input is:
- Parent income and assets
- Number of children in the family
- Number of children attending college at once
- Student’s class rank or test scores
- Parents’ retirement savings
- Home equity
- Expected healthcare costs
Each school awards aid differently, so not every calculator will require all of the above information. For example, Harvard only provides need-based aid, so they do not ask for a student’s class rank or test scores (though you’ll need those to be admitted!).
How To Use A College Net Price Calculator
You can input the exact same information into three different schools’ calculators and get a wide range of aid and cost estimates. Therefore, when looking at schools, it is best to look at net cost calculations rather than published tuition rates for an accurate comparison. Depending on your situation, you could end up paying half as much for a school that has twice the listed tuition as another one.
It is important to remember, though, that net price calculators only provide estimates. The financial aid amount they generate is not guaranteed. However, if you input accurate information, the estimate should be close enough to give you a good idea of what your out-of-pocket costs would be for your child to attend that school.
Still Have Questions?
Choosing a college is a big decision that comes with a big price tag. If you want the assistance of an experienced financial professional or have questions about paying for college or increasing aid eligibility, contact us at Wealth Management Group, LLC by emailing firstname.lastname@example.org or calling (214) 644-2564.
About Wealth Management Group, LLC
Wealth Management Group, LLC (WMG) is a Registered Investment Advisor with the Securities and Exchange Commission. WMG is an independent company owned by the advisors. It is not owned by nor is it a subsidiary of any other company. Our professional staff includes four advisors that hold the CFP® (Certified Financial Planner) designation and one who is a CPA (Certified Public Accountant). They have average industry experience of more than 15 years. WMG specializes in all aspects of wealth management, including wealth protection, wealth enhancement, wealth transfer, and charitable giving. They serve individuals and families in Collin County, the DFW metroplex, throughout Texas, and beyond. Learn more about WMG at www.wealthmanagementgroupllc.com.