Research shows that six in ten families rule out some colleges because of sticker price, yet many do not know that the “net price” is typically far lower. Last year, Stanford’s sticker price for tuition, living expenses, and books was $55,918, while Cal State Long Beach’s was $20,675. But in 2009-10, for some low-income students, after grants and scholarships the price was actually $4,496 at Stanford and $3,593 at Long Beach.
To help parents and students make informed choices, the federal government now requires “net price calculators” on college websites. That is a start, but it is critical to teach parents proactively to think in terms of net price--especially those with lower incomes.
An AEI survey found that when asked to think of the cost for a low-income student, a majority of parents do recognize a distinction between sticker price and “net price after aid.” Yet, low-income parents often tend to overestimate the net price of college attendance.
Three corrective measures are needed:
- (1) the federal government should provide students with net prices for the schools they list on their financial aid forms;
- (2) guidance counselors, who advise students on college choices, should be provided with the relevant data; and
- (3) web developers should be encouraged to create online tools that help to compare net prices across institutions.
Andrew Kelly is a research fellow in education policy studies at AEI and is available for interviews. He can be reached at email@example.com or through firstname.lastname@example.org.
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