Calculating Costs

Last fall Congress passed the Higher Education Opportunity Act (HEOA) which included, among other things, a requirement that colleges and universities supply an online calculator of expected net costs. These calculators would enable prospective students and their parents to get a prediction of their actual costs, after subtracting a family's probable financial aid package from the institution's gross tuition and fees. The US Department of Education is developing a template, set to be released later this summer, that colleges could adopt with only minor adjustments. The HEOA requires the calculators to be live three year's after the law's passage (a little over two years from now). From this morning's Chronicle ($), we find that two colleges have already adopted their own versions and made them available to prospective students, and it wasn't all that hard to do:

Purdue built its calculator with the help of the university's IT office, and it took about two months, [the university's senior associate director of financial aid] said.

A common complaint of university officials is that families will not understand that these calculators return only expected numbers and are not binding guarantees. Both Purdue and Smith College, the other early adopting institution, have found that not to be the case. Smith, for example, used to publish in its viewbook sample financial aid packages awarded to hypothetical families of different incomes. Real families often complained that their situation was similar to these hypothetical examples; the new calculator has reduced complaints and Smith now gets far fewer calls from families asking for explanations on how different assets are treated. At Purdue, more than 125,000 people used the calculater between September and March.

The true costs of higher education have been increasingly obscured by complex pricing models under which institutions list high tuition and fee costs but then distribute large financial aid packages. Other than national trends, families have been left in the dark about how much aid they should expect. The new calculators are one way of removing the guesswork.

Update: A commenter asked whether these calculators will be available to the public or only for applying students. The answer is they must be made available to the general public, but, in thinking about how to respond to the question, I thought it would be nice to be able to link to the fine work done by Purdue and Smith.

It turns out I can't. Purdue has a Web site up saying its calculator is not currently available, and I cannot find any evidence of Smith's site (it could exist, but I get paid to do things like this. If I can't find it, how likely are prospective students and parents to find it? I digress). There are, however, similar calculators available for Princeton, MIT, Yale, Williams, and Amherst. The College Board runs its own version to calculate Expected Family Contribution, but that is a far cry from a predicted cost at a specific institution.