Net Price Calculator: Evaluation After Six Months

IACAC May 2, 2012

Marc Geslani Educational Manager College Board mgeslani@collegeboard.org

Overview

• Driving forces behind push toward greater transparency & requirement to implement net price calculator

• Institutional options in meeting net price calculator requirement; hopes and fears

• Outreach opportunities and critical role of counseling in helping students and families use NPCs to make better decisions

Driving Forces Behind NPC

Transparency Choice & Access

Financial Literacy

My Real Price (Not the Sticker Price)

Fit & Value

Reduce confusion & complexity

Provide “consumer” information

Control college costs

Race To The Top for College Affordability

Federal Intervention

“So let me put colleges and universities on notice: If you can't stop tuition from going up, the funding you get from taxpayers will go down.” President Barack Obama, State of the Union, January 2012

Net Price Calculators

Department of Education College Affordability

and Transparency Center

Consumer Financial Protection Bureau

Cost Comparison Worksheet

White House

College Scorecard

Better Information

Reforming Student Aid

White House College Tuition Meetings

Evolution – From EFC to NPC

Net Price

Expected Family Contribution

Legislated Definition of Net Price

• Cost of attendance • …for an average first-year full-time

student • …less the average of all need and

merit-based federal, state, and institutional grant aid awarded to first-year, full-time students.

Different Types of Calculators

Less data going in may mean less reliable answer coming out.

NPCs Differ Mainly on Complexity of Family/Student Input

Easier: Income ranges and net price expressed

as an average.

Complex: Specific income figures,

academic information, net price expressed

specifically

• Federal NPC or the Voluntary System of Accountability (VSA)

• Public schools, usually not providing up-front merit scholarships

• Free to the colleges that choose to use them

• Easier for families to use and complete

• Lesser degree of accuracy due to: • Use of AVERAGING across income/EFC groups

• (Prior) Prior Prior Year Data (calculator displays 10-11 but student enrollment is for 12-13)

NPCs that use Income Ranges and Average Awards

• Inherently more accurate as there is no use of average figures. Each calculation is individual.

• College Board and other third-party vendors providing these solutions.

• Private and public flagships providing significant institutional/merit-based aid

• The College Board (and other vendors) provide a special version of NPC for PROFILE schools

NPCs that Simulate Applying for Aid and Award Packaging

• The Texas Higher Education Coordinating Board has developed a Net Price Calculator for most schools in the state: 2-Year, 4-year, Public and Private.

• Net Price is displayed as broad ranges

Texas Does It’s Own Thing

• Different Calculation Methods:

• Average of what students like you received 2 or 3 years ago (Federal template, VSA)

• Individual calculation based on specific figures you provided (FAFSA-like calculators)

• Probable range of award you could receive based on information you provided (Texas calculator)

• Different Results: • Net Price vs. Direct Cost vs. Out-of-Pocket Cost vs. Net Price

After Other Aid

Apples, Oranges and Bananas

There is no uniform way that institutions are required to display results so it is important to help students interpret their results, paying particular attention to the “appearance of affordability.”

Counseling Students and Families

Are NPCs Being Used? Yes!

Month Visitors Reaching Net Price

Calculation

% Net Price Calculation

% entered via cb.org

October 117,118 33,207 28% 51%

November 154,045 43,285 28% 35%

December 125,698 33,715 27% 30%

January 170,612 51,280 30% 30%

February 152,435 43,843 29% 29%

March 149,785 34,790 23% 23%

Total 869,693 240,120 28% 28%

Unique Visitors to 300+ College Board NPCs

Are NPCs Being Used?

Month Visitors Reaching Net

Price Calculation

% Net Price Calculation

October 141,386 48,571 34%

November 177,245 62,065 35%

December 141,910 46,697 33%

January 191,988 60,357 31%

February 173,203 63,961 37%

March 169,872 98,456 58%

Total 995,604 380,107 38%

Repeat Visitors to 300+ College Board NPCs

Federal Resources

College Navigator

Department of Education

College Affordability and

Transparency Center

Consumer Financial Protection Bureau

Cost Comparison Worksheet

White House

College Scorecard

Better Information

Other Resources

myfinancialfit.com

netpricecalculator.info

Good Advice Makes the Difference

What Students and Parents Need to Know about NPCs

1. Not all NPCs are the same. Typically the simpler the NPC, the less accurate.

2. Timing is a factor.

3. There is no uniform way that institutions are required to display results so it is important to help students interpret their results, paying particular attention to the “appearance of affordability.”

4. If loans are subtracted from “net price,” students need to know that loans differ in cost and terms and conditions.

What Students and Parents Need to Know about NPCs – continued

5. Supplemental questions are important for scholarship and grant eligibility purposes.

6. Depending on which NPC an institution is using, the amount of time to complete the NPC will differ.

7. Advise students and parents not to “face to the bottom.”

8. Students should keep a copy of their NPC results for comparison purposes.

9. Make students aware that their NPC results are only as good as the accuracy of the data they enter.

What Students and Parents Need to Know about NPCs - continued

10. Personal identifying information is not required; Student should be able to NPCs anonymously

11. NPCs will likely work best for: Traditional wage earner families

Families without unusual circumstances

12. NPCs will not work as well for: Divorced/separated families

Self-employed families

Families with special circumstances

For More Information

• Program site:

• http://www.collegeboard.org/npc

• “What Counselors Need to Know About Net Price Calculators” – by College Board staff

• “Net Price Calculator: Challenges and Opportunities” by Joseph A. Russo, Director, Student Financial Strategies, University of Notre Dame

• Student site:

• http://netpricecalculator.collegeboard.org