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Pam’s Link Alert: Net Price Calculator

May 6, 2011

Every postsecondary institution in the United States that participates in the Title IV student aid programs must post a net price calculator on its Web site by October 29, 2011.

-The calculator is intended to help current and prospective students, families, and other consumers estimate the individual net price of an institution of higher education.

-Institutional data must be used to provide an estimated net price for each student’s individual circumstances.

-The Department has designed and developed a  net price calculator which is available to all Title IV postsecondary institutions.

-An institution may choose to develop their own net price calculator as well.

-The Department’s is available at

Pam King, Partner Solutions Strategy and Missouri

2 Comments leave one →
  1. May 9, 2011 10:04 am

    To be clear, the government not developed a net price calculator, but has developed a template for one, which requires considerable work on the part of a college to ‘normalize’ data to approach the accuracy of net price calculators offered by third-parties or those built by colleges.

    The Association for Institutional Research calls the federal NPC template a “one size fits all” look-up table design that asks no merit aid questions and ignores several key components that the Federal Methodology (FM) uses to determine Expected Family Contribution (EFC).

    The federal NPC template is most accurate when three conditions are met simultaneouly:

    a student is from a low-income household,

    the institution awards need-based aid strictly according to FM needs analysis, and

    the institution does not discount tuition and offers little or no merit aid.

    Testing of the federal template’s EFC methodology using 145,490 actual dependent and independent students’ financial profiles found 70 percent fell outside their correct FM EFC range. Even when the federal NPC template assigns a student to the correct EFC range, aid estimate results can be inaccurate because need-based criteria are used to determine merit aid estimtes.

    Regardless of whether an institution offers little or no merit aid, AIR recommends a careful analysis and “normalization” of need-based aid data by removing outliers.

    As Lefter Daku, who served on the committee that established the federal NPC template, has said “The federal template is imperfect in how it estimates EFC to determine aid. If you normalize aid data distribution, you’ll be approximately right, but if you don’t you’ll be precisely wrong.”

    See NACAC’s Journal of College Admission spring cover story for more details on NPC options and choices colleges are making to provide prospective students accurate aid, net price, and out-of-pocket cost estimates.

  2. May 9, 2011 7:18 pm

    Thank you for taking the time to leave a comment.

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