Running the Real Numbers

In the Wall Street Journal  "Weekend Investor" of July 28-29, 2012, there was an article entitled, "You Paid for College How?" by Anna Maria Andriotis.  The author states that while, according to the U.S. Census, average household income fell 6% between 2006 and 2010, the annual cost at 4 year private non-profit colleges increased 14% from five years earlier.  In-state four year public college costs rose 20% in that same period!  The college cost statistics are from the College Board and all percentages were adjusted for inflation.  The figures are daunting and the article discusses ways in which families may cover college costs and the pros and cons of each strategy.  Some strategies include:  Tuition Installment Plans; Home Equity Loans; Credit Cards; Life Insurance and Loans.  The article is definitely worth a read.

What makes the task of covering college costs even more difficult is trying to find out what that cost will actually be.  Since 2011 colleges were mandated by Congress to provide a Net Price Calculator (NPC) on their online sites.  However, according to Rachel Louise Ensign in the Wall Street Journal of April 28-29, 2012, some colleges "lowball costs" by asking few questions.  "Others are splashy but potentially confusing."  In some cases, projected costs are an average of 14% less than what the student will actually wind up paying.  That's according to a study by FinAid.org which also provides an online calculator.

Some of the things to look for when judging the accuracy of a college's NPC are:
1)  Who developed the college's calculator?  those developed by the college or outside company tend to be more accurate than those using the standard template provided by the U.S. Department of Education.
2)  Does it ask more than 10 questions?
3)  Does it include questions that may help determine aid based on merit such as academic performance?
A helpful site to visit for more links and information as to how to understand and use NPC's is http://netpricecalculator.info.  NPC's that aren't  accurate and useful are mere gadgetry!

This blog will resume with a new post on January 9, 2013. 
 Blessed Thanksgiving and a very happy holiday season to all!