- Hard Truth #1: Parents generally can’t really know what college will cost until the bitter end of the process (with a few exceptions).
- Hard Truth #2: Students Are Neither Child Nor Adult, They Cannot Borrow the Cost of School Alone and Parents Are Limited In Their Ability to Intervene Once Kids Are 18
- Hard Truth #3: Aiming For Alternative Paths To A College Degree To Save Money Have Implicit Costs That Often Aren’t Acknowledged
- Hard Truth #4: Going Early Decision will dramatically improve your odds of getting into a specific desired school, but many schools interpret a reach for Early Decision as a reason to charge full freight tuition
- Hard Truth #5: If You Find Extra Scholarship Money on the Outside, Be Prepared for the University to Take Away That Amount In Their Own Aid Offer
- Hard Truth #6: Merit Aid Is Real Money, but Rarely Covers The Bill In Full.
- Hard Truth #7: Finding A Path Takes Time And Effort, Starting Early Gives Your Whole Family A Leg Up
- So What’s The Answer? Figure Out What’s Right For Each Of Your Kids And Model It Out….Here are two tools you should know about to get started
There are two tools you may want to acquaint yourself with as you are moving toward that date of August 15th of the senior year of high school when the bill arrives: Net Price Calculator (NPC) and the Student Aid Index (SAI)
The Net Price Calculator (NPC) is an online tool provided on each prospective college’s website that processes each family’s financial information and estimates the amount of grants, scholarships and work-study aid each kid will likely receive. Note that this is an estimate and not a promise. So you can get through this, apply and think you know what you’re dealing with, and then be off by tens of thousands of dollars in the end. Unless you are paying full cost. Then the number you are providing for fall semester, about on August 15th is exactly half of the Cost Of Attendance (COA) published on the website, plus a few negotiable extras like health insurance which you may be able to provide, or bundled book purchases, which you may decide to opt out of. The next half is due very quickly thereafter, by early January usually.
The Student Aid Index or (SAI) primarily determines the student’s eligibility for federal student aid like grants, loans and work-study. It spits out a single number that in their estimation represents the amount your family is expected to pay per year toward each student’s college education.
So how does SAI differ from NPC? Here's an analogy:
SAI: Is like determining your credit score. It would be easy to look at the number that comes out as a dollar figure you should expect to pay, but it is more accurate to say it’s a general indicator of your financial standing and eligibility for certain types of financial assistance. It’s possible to receive an index number that is negative, in families with very low income levels, and ones that also are in the six figures and exceed the cost of attendance, for families that .
Net Price Calculator: Is like getting a personalized quote for car insurance. It considers your specific circumstances (age, driving history, car model) to give you an estimate of your costs. Again, in the end it’s not really the price you can expect to pay, but a “more or less this” number to expect when the bill comes in July.
Key Differences:
Scope: SAI focuses on federal aid eligibility, while Net Price Calculators focus on the overall cost of attending a specific college.
Specificity: SAI provides a general estimate, while Net Price Calculators provide a more personalized estimate for a particular institution.
In summary:
Use SAI: To understand your overall eligibility for federal student aid.
Use Net Price Calculators: To compare the affordability of different colleges and make informed decisions about where to apply.
Pro Tip: when you are trying to figure out the family burden for college costs, try not to get hung up on sharpening your pencil and getting to the last dollar. These are dynamic numbers that can change over time, even year to year, and among different kids. Modeling various scenarios will help you get to a final path- not a specific number- you can live with.