Colleges still have about two years to post net-price calculators on their Web sites to comply with a new federal requirement, but two colleges that already have calculators up and running urged others to get a jump on it at a session here at the annual meeting of the National Association of Student Financial Aid Administrators.
Financial-aid officials from Purdue University and Williams College said the calculators had helped demystify the aid process for families applying to their colleges. And they said that, contrary to what many aid administrators fear, families seem to understand that the calculators provide an estimate, not a guarantee.
Purdue began making early financial aid estimates on paper 15 years ago, and developed its Web application last summer, said Marvin Smith, the university’s senior associate director of financial aid. Williams has had its calculator for six years, said Paul Boyer, director of financial aid there.
Mr. Smith said he thought colleges should start building their own calculators rather than wait for a template that the U.S. Department of Education is expected to provide later this summer. Building a custom calculator allows a college to better reflect the complexities of its own pricing and aid packaging. Purdue built its calculator with the help of the university’s IT office, and it took about two months, Mr. Smith said. Williams worked with a company called Think Ahead.
Aid administrators have worried that families may take the net-cost estimate as a guarantee—no matter how many disclaimers the college includes—and be angry if their actual aid package looks different from the estimated one. But both Mr. Smith and Mr. Boyer said such complaints were rare and almost always stemmed from inaccurate estimates caused by families making mistakes when they entered their financial data.
“There’s a fear, but I think it’s an unfounded fear,” Mr. Smith said. “Families have not complained, and I think they appreciate the effort and it’s worth doing.”
At Williams, “a few disgruntled families each year feel they’ve been deceived because they get a different number,” Mr. Boyer said. “I can’t stress enough the need for disclaimers.”
Before developing its calculator, Williams had included in its viewbook a few examples of financial-aid packages for families of different incomes and sizes. That approach led to many more complaints from families who insisted that they were just like the family in the example but who wound up with a different package, Mr. Boyer said.
Not only does the calculator allow families to estimate what college will cost for one of their children, it educates them about how their expected contribution and aid award are determined, Mr. Smith said.
In fact, said Mr. Boyer, his office has received many fewer calls from families asking how various income streams and assets are treated in the financial-aid process since posting the calculator. Mr. Smith said Purdue had had the same experience. And neither college gets many calls asking how to use the calculator.
More than 125,000 people used Purdue’s calculator between September and March, Mr. Smith said. “Within two years, this will just be an expectation” of families planning for college, he said.
Some Shortcoming
The two colleges’ calculators do have limitations. Purdue cannot estimate the net price more than one year out, and because its tuition is set so late the in the year, it must use the current year’s cost of attendance to predict for an incoming student. However, four-year cost estimates for all colleges will be included on the College Navigator Web site that the Education Department has created for consumers. Purdue also can’t take outside scholarships into consideration, and the staff is debating whether or not it should try to.
Users of Williams’s calculator initially ran into trouble if they used an old Web browser or a Mac, but those problems have been resolved, Mr. Boyer said. The college does not yet have a way to consider the situations of international applicants, though.
And net-price calculators cannot account for the special family situations that a financial-aid office might take into consideration.
Whether the calculator is built in-house or outsourced, it does require a fair bit of financial-aid staff time to create, the presenters said. At Purdue, financial-aid officials had a designated programmer from the IT staff building the calculator, but they had to explain to him in detail how the university packages aid.
At both colleges, the financial-aid staff wrote text to appear in help screens guiding families through the calculator. Williams adjusted its format to remind users to include information that they frequently forgot, such as pre-tax contributions to retirement accounts and home equity, which the college takes into account. The financial-aid staff at Purdue can use a back-end interface to update tuition costs and the amounts of various awards as they change. And no matter how the calculator is developed, the presenters said, it is crucial that the aid office tests it repeatedly with examples of families in various situations.
