Colleges publish their total cost of attendance to help prospective students make a budget, but you might pay less if you’re eligible for grants and scholarships. A college’s net price is the amount you actually wind up paying. When making your college decision, this is the cost you should focus on.

What is net price?

A college’s net price is an estimate of how much you and your family will pay out of pocket for education expenses for one school year. The net price is calculated by taking the total cost of attendance — including tuition, room and board and books — and subtracting any grants and scholarships you’re eligible for. You might decide to pay for what’s left through student loans, savings, summer jobs or some other method.

Sticker price vs. net price

A college’s “sticker price” is the amount that’s advertised as the cost of attendance in a given year before any aid is factored in. The cost of attendance includes the cost of tuition and fees, room and board, books, supplies, transportation and personal expenses. Colleges determine this number each year and publish it on their websites.

The net price is typically lower than the sticker price because it is an estimate of how much a student might pay for a year of school after accounting for grants and scholarships.

How to calculate net price

The net price is based on the school’s cost of attendance, the financial aid it provides and the student’s personal circumstances. To calculate your net price at a particular school, head to the school’s financial aid website or use the U.S. Department of Education’s search tool to find the school’s net price calculator. These calculators can help you get a personalized estimate so you can easily compare costs at multiple colleges.

Gathering your documents and entering the information takes about 20 minutes. Here’s what you can expect:

  1. Gather your documents. You’ll get through the process quicker — and get more accurate results — if you have everything on hand before you start. The school should list what you need, such as your parents’ most recent tax return, W-2 form and bank statement.
  2. Enter the information. The school will need your personal information, such as name, address and birthdate, along with details about your intended major and start date. The school may also ask about your academic record from high school, such as GPA, class rank, ACT scores and SAT scores if available.
  3. Read the report. Based on the details you provide, the school estimates scholarships, grants and federal student loans you might be eligible for. It’ll subtract that amount from the school’s cost of attendance to arrive at your net price.
  4. Save the information. Download the report and save it for your records, and use the information to compare prices and financial aid across multiple schools. If the schools you’re comparing use the College Board’s Net Price Calculator, you can create an account and save your information there.

Limitations of net price calculators

Although colleges are required to provide a net price calculator for prospective students, they may not provide a completely accurate price tag. Be aware of these limitations:

  • Typically geared toward first-year undergraduates: These calculators usually estimate what a first-year undergraduate student might pay for their first year. Continuing, graduate, transfer, international and part-time students may need to contact the school’s financial aid office for a customized estimate.
  • Ignores talent-based aid. The net price calculator may not account for certain financial aid, such as an athletic or arts-based scholarship.
  • Not all standardized. Every school uses different information and formulas to calculate net price, and some use an out-of-date cost of attendance.
  • Aid isn’t guaranteed. The calculator estimates your aid but doesn’t guarantee it. You’ll still need to apply to the school, fill out the FAFSA form and receive your award letter to find out exact amounts.

How much should you expect to pay for college?

Your expected tuition and fees will depend on your school — whether it’s in state or out of state, public or private, two-year or four-year. The average price of tuition and fees for full-time undergraduates, as reported by College Board, are:

Average sticker price for tuition and fees Average net price for tuition and fees
Private nonprofit four-year college $37,650 $15,990
Public four-year college (out-of-state residents) $27,020 Not available
Public four-year college (in-state residents) $10,560 $3,230

Of course, tuition and fees aren’t the only expenses you’ll need to think about. Room and board, books and supplies, transportation and other expenses will increase your cost of attendance. Factor in these costs when researching schools. Your financial aid letter should spell out whether you’ll get a break on certain costs.

The bottom line

Higher education can be expensive, depending on the school you attend and whether you’re an in-state resident. But thanks to financial aid, many students pay less than their college’s sticker price. When you’re comparing the cost of schools, use the published price only as a starting point. You can use a net price calculator to estimate your potential net price and then check your financial aid award letter for final details.

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