College Calculator v. FAFSA

Parents who try to determine how much college will cost often are confused by the guidance they find.  They find college cost calculators on each college web site.  They fill out the FAFSA and get a report.  Those that dig further find cost estimates on the College Scorecard, the College Navigator, and a plethora of private sites.  What are the differences between the college calculators and FAFSA?  What can you rely on?

In an earlier post, I explained how federal laws govern affect information about college financial aid.  The laws tell us that there are certain responsibilities that the government, and  that  colleges have to create "transparency" in understanding how much college will cost.  Let's look at those responsibilities.

Section 1015a (h)(3) says that any institution "that receives Federal funds ... shall make publicly available on the institution's website a net price calculator to help current and prospective students, families, and other consumers estimate a student's individual net price at such institution of higher education."  This calculator may be the calculator that the government developed, or it could be one developed by anyone as long as it uses the same data elements as the government-developed calculator.  This calculator is required to be individually tailored to the student's circumstances, so it should take into account information such as the actual family income and assets.  You would be reasonable to believe that you can rely on the number calculated, right?

Not exactly.  Because the very next section requires institutions to clearly state:
1. The number is NOT an actual award of financial assistance;
2. The number is NOT BINDING on the institution and NOT BINDING on any governmental official or body;
3. The number could change.
Now is a nice time to pull your hair out.  Is this or is this not a number that you can rely on?

In general, the number from net price calculators can be used to plan.  The exact figures may differ, but everyone is generally trying to give you an idea of what you need to budget.  Like all budgets, the actual amounts may change when you apply it to real life..

The net price calculators are designed to help you plan.  But they are not actual financial aid awards.  Securing a financial aid award requires three steps:
1. Being admitted to the school of your choice.
2. Completing the FAFSA online, including designating the colleges that will be receiving your information from the FAFSA.
3. Receiving your financial aid offer in writing from the college, which you can tweak through discussion with the financial aid office, and that you sign (it is a real, binding contract).

In a future posting, I will discuss how the financial aid calculation is computed.