Within the next two years, institutions participating in Title IV Student Financial Aid Programs will be required to install a net price calculator on their Websites. The National Center for Education Statistics and the Office of Postsecondary Education announced the release of the new tool last November. The calculator was a mandate of the Higher Education Act of 2008, and it will allow prospective students to calculate an estimated net price of enrollment at an institution.
“This requirement represents an endpoint in the federal debate about college costs and is the product of years of legislative proposals intended to contain the cost of college in the United States," said David Hawkins, Director of Public Policy and Research at NACAC.
The new template for the calculator is available online, and colleges and universities looking to add the Web application to their site can perform the installation through the Department of Education Website.
The calculator is required to appear on college Websites before the Oct. 29, 2011 deadline. Colleges that already provide an online cost calculator will be able to continue using that technology, provided that it contains at least the same components as the federal template.
During the development of the calculator component of the Higher Education Act, NACAC participated in a technical review panel organized by the Department of Education. "Some basic requirements of the calculator were outlined in the law, but many details relating to the specificity of the calculations were left open,” said Melissa Clinedinst, director of research at NACAC.
Clinedinst represented NACAC during the meetings of the review panel. "The quite lively discussion that resulted led, I think, to a good balance of concerns about the data reporting burden of colleges and particularly those that have smaller budgets and staff sizes,” she said.
Postsecondary administrators will need specific institutional data on hand if they choose to take advantage of the Department's template. “Once you prepare that data, you’ll be able to enter it into the application online and then it will output a calculator to post on your institution’s Website,” said Elise Miller, Program Director for the Integrated Postsecondary Education Data System at the National Center for Education Statistics.
The calculations will be based on the basic formula of price of attendance minus grant aid. The calculator will generate an estimate based on the student's unique information and what similar students paid in the previous year. The estimate generated from the calculator will not represent a final or binding determination of the institution's cost.
While individual institutions have the opportunity to make their calculators as precise as possible, they are only required to include the data elements found in the Department's template. The template was designed to accommodate a wide spectrum, "from the smallest cosmetology college to the largest research university” Miller said.
According to Pam Horne, Assistant Vice President for Enrollment Management and Dean of Admissions at Purdue University, her institution installed their calculator over two years ago. Previously, Purdue had used a paper calculator, which was becoming increasingly obsolete. "When we moved to a new student information system, we just couldn’t replicate that,” Horne said. With the new calculator mandate on the way from the Department of Education, Purdue decided to perform an early overhaul of their financial aid estimator.
Since adding the tool to their Website, Horne says feedback from applicants has been positive. The calculator has also driven more inquiries to the Website, reducing the amount of phone calls made to the financial aid and admission offices in a time of economic uncertainty. “We’ve seen decreases in our phone calls and emails about 'what kind of aid might I be eligible for',” Horne Said.
In addition to the installation of calculators on institutional Websites, net cost estimates will be posted by the Department of Education.
For NACAC Members:
NACAC’s assistant director of research Melissa Clinedinst is now taking questions about the Net Price Calculator on NACAC's MemberToMember community. Got a question? Are you ready for the change? Ask away!
