The Vast Array of Net Price Calculators

Net price calculators are designed to give students and their families a clear idea of how much college will cost them each year after taking available financial aid into account. All colleges have to post a net price calculator under the Higher Education Opportunity Act of 2008, but these calculators take a range of different form. The Department of Education has proposed a standardized “shopping sheet” which has been adopted by some colleges, but there is still a wide amount of variation in net price calculators across institutions. This is shown in a 2012 report by The Institute for College Access and Success, using 50 randomly selected colleges across the country.

In this blog post, I examine net price calculators from six University of Wisconsin System institutions for the 2013-14 academic year. Although these colleges might be expected to have similar net price calculators and cost assumptions, this is far from the case as shown in the below screenshots.  In all cases, I used the same student conditions—an in-state, dependent, zero-EFC student.

Two of the six colleges selected (the University of Wisconsin Colleges and UW-La Crosse) require students to enter several screens of financial and personal information in order to get an estimate of their financial aid package. While that can be useful for some students, there should be an option to directly enter the EFC for students who have filed the FAFSA or are automatically eligible for a zero EFC. For the purposes of this post, I stopped there with those campuses—as some students may decide to do.

(UW Colleges and UW-La Crosse, respectively)

UW Colleges Net Price Calculator

La Crosse Net Price Calculator

UW-Milwaukee deserves special commendation for clearly listing the net price before mentioning loans and work-study. Additionally, they do not list out each grant a student could expect to receive, simplifying the information display (although this does have its tradeoffs).

Milwaukee Net Price Calculator

The other three schools examined (Eau Claire, Madison, and Oshkosh) list out each type of financial aid and present an unmet need figure (which can be zero) before reporting the estimated net price of attendance. Students may read these calculators and think that no borrowing is necessary in order to attend college, while this is not the case. The net price should be listed first, since this tool is a net price calculator.

(UW-Eau Claire, UW-Madison, and UW-Oshkosh, respectively)

Eau Claire Net Price Calculator

Madison Net Price CalculatorOshkosh Net Price Calculator

The net price calculators also differ in their terminologies for different types of financial aid. For example, UW-Eau Claire calls the Wisconsin Higher Education Grant the “Wisconsin State Grant,” which appears nowhere else in the information students receive. The miscellaneous and travel budgets vary by more than $1000 across the four campuses with net price calculators, highlighting the subjective nature of these categories. However, they are very important to students because they cannot receive more in financial aid than their total cost of attendance. If colleges want to report a low net price, they have incentives to report low living allowances.

I was surprised to see the amount of variation in net price calculators across UW System institutions. I hope that financial aid officers and data managers from these campuses can continue to work together to refine best practices and present a more unified net price calculator.

Net Price and Pell Enrollment: The Good and the Bad

I am thrilled to see more researchers and policymakers taking advantage of the net price data (the cost of attendance less all grant aid) available through the federal IPEDS dataset. This data can be used to show colleges which do a good job keeping the out-of-pocket cost low either to all students who receive federal financial aid, or just students from the lowest-income families.

Stephen Burd of the New America Foundation released a fascinating report today showing the net prices for the lowest-income students (with household incomes below $30,000 per year) in conjunction with the percentage of students receiving Pell Grants. The report lists colleges which are successful in keeping the net price low for the neediest students while enrolling a substantial proportion of Pell recipients along with colleges that charge relatively high net prices to a small number of low-income students.

The report advocates for more of a focus on financially needy students and a shift to more aid based on financial need instead of academic qualifications. Indeed, the phrase “merit aid” has fallen out of favor in a good portion of the higher education community. An example of this came at last week’s Education Writers Association conference, where many journalists stressed the importance of using the phrase “non-need based aid” instead of “merit aid” to change the public’s perspective on the term. But regardless of the preferred name, giving aid based on academic characteristics is used to attract students with more financial resources and to stay toward the top of prestige-based rankings such as U.S. News and World Report.

While a great addition to the policy debate, the report deserves a substantial caveat. The measure of net price for low-income students only does include students with a household income below $30,000. This does not perfectly line up with Pell recipients, who often have household incomes around $40,000 per year. Additionally, focusing on just the lowest income bracket can result in a small number of students being used in the analysis. In the case of small liberal arts colleges, the net price may be based on fewer than 100 students. It can also result in ways to game the system by charging much higher prices to families making just over $30,000 per year—a potentially undesirable outcome.

As an aside, I’m defending my dissertation tomorrow, so wish me luck! I hope to get back to blogging somewhat more frequently in the next few weeks.

Recent Trends in Student Net Price

In the midst of the current economic climate and the rising sticker price of attending college, more people are paying attention to the net price of attendance. The federal government collects a measure of the net price of attendance in its IPEDS database, which is calculated as the total cost of attendance (tuition, fees, room and board, and other expenses) less any grant aid received. Since the 2008-2009 academic year, they have collected the average net price by family income among students who receive federal financial aid. In this post, I examine the trends in net price data by type of institution (public, private nonprofit, and for-profit) among four-year colleges and universities (n=1753).

The first figure shows the average net price that families faced in the 2010-11 academic year (the most recent year available) by family income bracket. This nicely shows the prevalence of tuition discounting models, in which institutions charge a fairly high sticker price and then discount that price with grant aid. (Part of the discount in the lowest two brackets is also state and federal need-based grant aid.)


The next figure shows the net price trends over the period from 2008-09 through 2010-11 for the lowest (less than $30,000 per year) family income bracket.


It is worth noting that the public and for-profit sectors largely held the net price for students from the lowest-income families constant over the three-year period (0.6% and -3.2%, respectively), while nonprofit colleges increased the net price by 5.6% during this time. This might show an institutional commitment to keeping the net price relatively low for the neediest students, but also keep in mind that the maximum Pell Grant increased from $4,041 to $5,273 during this period. Colleges may not have changed their effort, but instead relied on additional federal student aid. The uptick in the net price at private nonprofit universities may have been a function of pressures on endowments that restricted institutional financial aid budgets.

The final figure shows the net price trends for the highest family income bracket (more than $110,000 per year)—among students who received federal financial aid.


Three observations jump out here. First of all, the net prices for nonprofit and for-profit universities are nearly identical for the highest-income students. This shows the financial model for nonprofit education, in which “full-pay” students are heavily recruited in order to pay the bills and to help fund other students. Second, the average net price at public universities increased by 9.4% during this period for the highest income students, compared to only 4.6% at nonprofit and 0.4% at for-profit institutions. As per-student state appropriations declined during this period, public institutions relied more on tuition increases and recruiting out-of-state and foreign students if at all possible. Finally, the flat net price profile of for-profit colleges across the income distribution is worth emphasizing. It seems like these colleges have reached a point at which additional increases in the price of attendance will result in net revenue decreases.

I would love to hear your feedback on these figures, as well as suggestions for future analyses using the net price data. I am eagerly awaiting the 2011-12 net price data, but that may not be available until this fall.

Improving Net Price Data Reporting

As the sticker price of attending colleges and universities has steadily increased over the past decade, researchers and policymakers have begun to focus on the actual price that students and their families face. The federal government collects a measure of the net price of attendance in its IPEDS database, which is calculated as the total cost of attendance (tuition, fees, room and board, and other expenses) less any grant aid received. (More information can be found on the IPEDS website.) I have used the net price measure in my prior work, including the Washington Monthly rankings and my previous post on the Net Price Madness tournament. However, the data do have substantial limitations—some of which could be easily addressed in the data collection process.

There are two different net price measures currently available in the IPEDS dataset—one for all students receiving grant aid (federal, state, and/or institutional) and one for students receiving any federal financial aid (grants, loans, or work-study).  The average net price is available for the first measure, while the second measure breaks down the net price by family income (but does not report an average net price.) For public institutions, both of these measures only include first-time, full-time, degree-seeking students paying in-state tuition, which can substantially limit the generalizability of the results.

Here, I use my current institution (the University of Wisconsin-Madison) as an example. The starting sample for IPEDS is the 3,487 first-time, full-time, degree-seeking freshmen who are in-state students. Of those students, net price by family income is calculated for the 1,983 students receiving Title IV aid. (This suggests that just over half of in-state Madison freshmen file the FAFSA.) Here are the net price and number of students by income group:

0-30k: $6,363 (n=212)
30-48k: $10,098 (n=232)
48-75k: $15,286 (n=406)
75-110k: $19,482 (n=542)
110+k: $20,442 (n=591)

The average net price is calculated for a slightly different group of students—those who received grant aid for any source (n=1,858). The average net price is $14,940, which is lower than the average net price faced by students who file the FAFSA ($16,409) as some students who do not receive institutional grants are included in the latter measure. However, the latter number is not reported in the main IPEDS dataset and can only be calculated by digging into the institutional reports.

I would encourage IPEDS to add the average net price for all FAFSA filers into the dataset, as that better reflects what students from financially modest backgrounds will pay. Additionally, to counter the relatively small number of students who may have a family income of less than $30,000 and to tie into policy discussions, I would like to see the average net price for all Pell Grant recipients. These changes can easily be made given current data collection procedures and would provide more useful data to stakeholders.

The 2013 Net Price Madness Tournament

Millions and millions of Americans will be sitting on the couch over the next several weeks watching the NCAA college basketball tournaments—and I’ll be keeping an eye on my Wisconsin Badgers as the men’s team makes its way through the tournament. Those of us in the higher education community have made a variety of brackets highlighting different aspects of the participating institutions (see Inside Higher Ed’s looks at the men’s and women’s tournaments, using the academic performance rate for student-athletes, and one from The Awl based on tuition, with higher tuition resulting in advancement).

I take a different look at advancing colleges through the tournament—based on having the lowest net price of attendance. Net price is calculated as the total cost of attendance (tuition and fees, room and board, books, and a living allowance) less any grant aid received—among students receiving any grant aid. I use IPEDS data from 2010-11 for this analysis, and also show results if the analysis is limited to students with family income below $30,000 per year (most of whom will have an expected family contribution of zero). Data for the 2013 Net Price Madness Tournament is below:





Overall Net Price

Round of 16

Midwest: North Carolina A&T ($6,147) vs. New Mexico State ($8,492), Middle Tennessee State ($9,148) vs. Albany ($12,697)

West: Wichita State ($8,079) vs. Ole Miss ($12,516), New Mexico ($10,272) vs. Iowa State ($13,554)

South: North Carolina ($11,028) vs. South Dakota State ($12,815), Northwestern State ($7,939) vs. San Diego State ($8,527)

East: North Carolina State ($9,847) vs. UNLV ($9,943), Davidson ($23,623) vs. Illinois ($15,610)

Final Four

North Carolina A&T ($6,147) vs. Wichita State ($8,079)

Northwestern State ($7,939) vs. North Carolina State ($9,847)

WINNER: North Carolina A&T (59% Pell, 41% grad rate)

Net Price (household income below $30k)

Round of 16

Midwest: North Carolina A&T ($4,774) vs. New Mexico State ($5,966), Michigan State ($5,569) vs. Duke ($8,049)

West: Southern University ($8,752) vs. Wisconsin ($6,363), Harvard ($1,297) vs. Iowa State ($8,636)

South: North Carolina ($4,101) vs. Michigan ($4,778), Florida ($3,778) vs. San Diego State ($3,454)

East: Indiana ($3,919) vs. UNLV ($6,412), Davidson ($7,165) vs. Illinois ($7,432)

Final Four

North Carolina A&T ($4,774) vs. Harvard ($1,297)

San Diego State ($3,454) vs. Indiana ($3,919)

WINNER: Harvard (11% Pell, 97% graduation rate)

Depending on which version of net price is used, the results do change substantially. Some colleges dramatically lower their net price of attendance for the neediest students, while others keep theirs more constant in spite of Pell Grant funds being available. Harvard’s victory on the lowest-income measure does ring somewhat hollow, as its percentage of students receiving Pell Grants (11%) tied with Villanova for the lowest in the tournament.

Thanks for reading this post, and feel free to use these picks if you choose to fill out a bracket for the real tournament. Do keep in mind that low net prices and basketball prowess may not exactly be correlated!