We already know that publishing a Net Price Calculator has become a requirement for Higher Education since October of 2011. While the letter of the law is always important for continuing our day to day business, it’s sometimes easy to overlook the spirit of the law once the mandate is met. So aside from giving everyone more work to do, what was the true purpose of this requirement? Why is Net Price Calculator needed? What was the U.S. Department of Education really trying to accomplish? To answer all of these questions, we have to take a few steps back to see the big picture.
The average cost of tuition of a 4 year college in 1980-81 was $3,499 according to the Nation Center for Education Statistics. By 2010-11, they report it has risen to $22,092. This is a 531% increase over a 20 year period! Even after adjusting for inflation we still see a 147% increase during the same period. Along with the increased costs of education, there are also many more numerous varieties and flavors of financial aid too. Today financial aid takes many forms, from grants, merit-based scholarships, need-based scholarships, private loans, government-subsidized loans, college aid, state aid, federal aid, and education tax benefits. Also, the levels of many of these sources of financial aid are also affected by the student’s estimated family contribution (EFC). More often than not, for students applying for admissions, estimating the cost of attendance of school prior to applying had become a near impossible task. Especially since some of these forms of financial aid could vary from school to school by a very large margin.
Enter stage right, the Higher Education Opportunity Act of 2008 is passed which required all universities to have a net price calculator located on their websites in 2011. IPEDS explains the ultimate purpose of the Net Price Calculator is:
… to allow students to calculate an estimated net price of attendance at an institution (defined as cost of attendance minus grant and scholarship aid) based on what similar students paid in a previous year.
In other words, to help students look past the sticker price, all of the numerous nebulous line items, and instead see the bottom line cost of school attendance using actual real world data. It is necessary to include an EFC calculator as it also plays critical role to prospective students for determining need based financial aid.
It’s easy to see why this is important for incoming students, but why is this important for schools? The answer is simple. Once students realize your school is more affordable than it appears at first glance, this opens admissions to a greater number of quality academia students and should certainly increase enrollment. This is without a doubt a win-win for both sides. The only real shame is that schools haven’t implemented this sooner. If your school is struggling with either a new implementation using the Net Price Calculator template that the U.S. Department of Education provides, or an existing implementation of a Net Price Calculator, just contact us and we’ll be more than happy to help!
Simple Apply’s admission software solutions are all fully section 508 compliant, and this certainly includes our Net Price Calculator. And as we’ve said before, the U.S. Department of Education provided template IS NOT Section 508 compliant.