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Net Price Calculator, Six Months In

How NPCs are being used and what it means for institutions
University Business, March 2012

Six months into the net price calculator (NPC) requirement, the experiences of many colleges and universities can be best described as “a mixed bag.” Questions or concerns that numerous schools expressed as they put together their plans for the NPC launch have not necessarily been answered: Will the phones start ringing off the hook? How accurate will comparisons be? What is the best location on our website: Should we highlight the NPC or bury it in a hard-to-find spot?

For the time being, it seems the answer to the first question about whether financial aid office phones or email accounts will begin to buzz with inquiries from prospective students and parents who have used, or need help using, the tool is “no.”

“We have had very little feedback on our NPC. We were just remarking earlier that it has been pretty quiet,” says Jane Brown, vice president for enrollment management at Northeastern University (Mass.). Director of Financial Aid Brian Lindeman from Macalester College (Minn.), reports a similar situation, adding, “We don’t—yet—know what that means.” 

State institutions are relating similarly little engagement with the aid or admissions office about the NPC. Clara Capron, director of financial aid at Western Washington University, says that neither she nor her associate director have received any questions regarding their NPC, nor has WWU’s front line financial aid staff received any questions. University of Connecticut’s financial aid director Jean Main notes, too, that her office is just “not hearing much.” UConn chose the federal template NPC for use at its Storrs campus and then customized it separately for its regional campuses.

Lynn University (Fla.) appears to be an exception. “Our admissions office is promoting the site and families seem to be using it. However, they still have questions and it has created more traffic volume for our new student counselor,” says Evelyn Nelson, executive director of student administrative services.

What’s on Their Minds

Even for institutions not receiving many questions, the types of questions they are getting provide a glimpse into how NPCs are being used, and in some cases, highlighting the confusion about comparability of results between institutions.

One example: Within a week of the NPC launch for Nazareth College (N.Y.), Samantha Veeder, director of financial aid, received a call from the mother of a high school senior who was interested in the college’s physical therapy program. The mom had “run the numbers” on Nazareth’s NPC and then compared the results to the NPC results of another private school in the state and was dismayed to find that Nazareth’s net costs were higher, especially considering that the sticker price of the comparison university was much higher.

Third-party vendors may have built 2012-13 parameters into their calculators, while the federal NPC template displays information for 2009-10.

Veeder quickly pointed out to the parent that the comparison school she used did not have a physical therapy program, the academic major that the student definitely intends to pursue. She encouraged the parent to make NPC comparisons with schools the student was truly considering.

A few days later, the mother called back to report that the NPC results for a State University of New York public institution that has a 3+3 PT program with Upstate Medical looked much more favorable from a net price standpoint than did Nazareth’s cost. Again, Veeder went into counseling and education mode, helping the mom to further investigate and uncover that even though the first year’s cost at the SUNY school was quite reasonable compared to the NPC results at Nazareth, when taking into account the tuition costs for the final three years at Upstate Medical, for which no scholarship or grant aid would be available, Nazareth’s overall program costs for the six-year period were, in fact, less expensive.

Veeder’s concern, expressed by many about the NPC, is this: “What if that mom had not called and I had not had the opportunity to help her fully investigate the costs?”

Now consider this confusing scenario: A private, nonprofit college in New York uses the federal net price calculator template displaying cost and median financial aid award information for the 2009-10 academic year. In 2011-12, its tuition and fees are $2,500 higher than in 2009 and overall total cost of attendance is $3,500 higher. Most of this school’s private college competitors are using third-party vendor calculators and have essentially built in their packaging parameters for the 2012-13 awarding cycle.

In this case, a prospective student/parent would be comparing net costs that are three years apart. That is hardly a valid comparison, surely not apples to apples, and likely not what the federal government intended when the regulation was instituted.

What’s a School to Do?

Financial aid administrators and enrollment professionals who meet with and help provide financial aid training for high school counselors can ensure that the school counselors understand how different the NPCs can be from one higher ed institution to the next. Encourage them to continue to urge their students to apply for admissions and aid at their schools of choice, because, for the time being, the NPCs may not be enough to go on in terms of whittling down the list of schools that are really affordable.

On high school financial aid nights, encourage families to do the same. Provide an example or two of how different results might be. Melissa Ibanez, director of financial aid, and Alex Nazemetz, director of admissions, at University of Pittsburgh at Bradford, a regional campus within the U of Pittsburgh system, share the NPC concerns for a regional campus such as theirs.

First, the calculator doesn’t take into account regional campuses, since most use an institution-wide average that can vary by several hundred dollars. In addition, merit aid is not well-reflected in the university’s calculator, so there’s concern that NPCs may prove to further cloud what they refer to as “the already muddy waters of college financial aid.”

The lack of comparability can lead to confusion rather than clarity for prospective students and parents.

Lindeman of Macalester College is quick to point out the advantage of NPCs, at least for families considering his institution. “So far, the biggest difference has been that we can offer a much more satisfying answer to some of the questions that families have as they are exploring options. I believe it is helpful that we can point them to our NPC instead of saying, ‘Apply for admission, apply for aid, wait two months, and then we’ll answer your question.’ We feel we are now more helpful and, I hope, the family feels that they have more information about how the process will end,” he says. “I feel like we will know much more about this tool in six months.”

The jury is still out.

Confusion, Not Clarity

What’s ironic is that the idea behind the NPC was to introduce transparency into the college net pricing arena, yet the lack of comparability can lead to confusion rather than clarity for the prospective student and his/her parents. It is incumbent on admissions and financial aid offices to understand how their NPC results stack up against their competitors’ results and be prepared to answer those concerns.

A Scannell & Kurz colleague, Jennifer Wick, wrote a blog post in October about how administrators at colleges and universities should do their own homework to prepare for questions. For institutions that have not yet received many questions, remember that most schools launched NPCs in late 2011, after many high school seniors had already developed their list of schools for which to apply for fall 2012.

The next recruitment cycle is likely to bring more questions and challenges, similar to that which Veeder from Nazareth College dealt with in week two after Nazareth’s NPC launch. A parent sent a spreadsheet of NPC results, again for the college’s physical therapy program, with comparisons to two competitors. The spreadsheet was accompanied by an eight-page letter of appeal that indicated if Nazareth would match the price of the least-expensive competitor, the student would apply early decision. Let the games begin.

Mary Piccioli is an enrollment management consultant at Scannell & Kurz.

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