*POCSmom’s DIY College Prep Insight: Net Price Calculator-From Day Dream to Nightmare

Cliché: Count down.    
POCS Reality: Before attending college, it is important to accurately calculate your out-of-pocket costs.

 

How did the dream of comparing college costs turn into a nightmare of confusion?

The Day Dream

Prospective students and their parents could learn their college costs before attending, so they wouldn’t get in over their heads in debt..

The Reality

A new federal law (Higher Education Opportunity Act of 2009 (see HEOA Sec. 111 which amended HEA Title I, Part C: added HEA Sec. 132(a), Sec. 132(h) (20 U.S.C. 1015a(a), 20 U.S.C. 1015a(h))) requires colleges to include a Net Price Calculator (NPC) on their website by October 29, 2011.

The basic Net Price Calculation is:

Price of attendance – estimated financial aid = out-of-pocket college costs.

The Nightmare

Although October 29th has not yet arrived, many schools have already added an NPC. The problem is both the calculator and the calculations are so flawed that college cost comparisons are difficult at best.

  1. No uniform calculator exists and colleges using some general guidelines are free to design their own NPC or contract with a business to develop one for them. That means students and parents will be college cost comparing apples to oranges.
  2. Price of Attendance is underestimated and always will be until a college’s cost of attendance formula (COA) includes a family’s huge hidden extra expenses. I call this formula the POCS COA.
  3. Financial aid estimates are inaccurate for two reasons. First, because the real calculation will be based on a complicated formula applied to the 100+ questions students and parents must answer on the federal financial aid form FAFSA. Some schools may also require additional forms regarding awards from institutional funds. Second, because not all financial aid reduces the college bill but are ways to pay the college bill. Only free money grants and scholarships lower college expenses. Federal education loans have borrowing costs that raise the college costs they are being used to help pay, but this fact is not mentioned. Don’t get me started on the Federal Work Study (FWS) Program. Here, students, not the college, receive a paycheck as they work in their FWS job. I think of this award (often $1000-$2,000 for the year) more like pizza and latte money.

 The POCSmom’s DIY College Prep Insight and Stress-busting tip

I love the idea of families calculating their college costs and having a plan for how to pay them. College is supposed to help not hinder a family’s finances, so think about colleges you can afford either from cash on hand (savings, checking, stocks, bonds, mutual funds, education savings plans) and/or what you can afford to borrow (based on repayment and projected future income).

Use my POCS COA formula to calculate college costs and a chart to determine how to pay those college costs.

For more college-bound information and myth-busting tips, consider POCSmom’s advice for the college-bound:

http://wendydavidgaines.collegeexpertpanel.com/pocsmom%e2%80%99s-diy-insight-advice-for-the-college-bound/

Don’t let sky rocketing college costs and shrinking financial aid plunge your family into a deep hole of educational loan debt. Escape the Net Price Calculator nightmare and start living your college dreams. 

*POCS: Parent Of a College Student

*POCSmom’s DIY College Prep Insight: College Admission Applications

Cliché: When the going gets tough, the tough get going.    
POCS Reality: Colleges students can select an admission program to increase their chances for admission and financial aid.

 

If you thought forming a college list was a challenge, wait until you apply for admission. Colleges can offer several admission programs and which one students choose can affect both the chances for admission and the ability to maximize your financial aid.

Colleges select which admission programs to offer and the due date for each program’s application submission. Failure to meet deadlines can result in an automatic rejection even if the applicant was otherwise qualified for admission.

Here are the admission programs:

1.  Regular Decision is the most common admission program. Although deadlines vary, most colleges select a due by date in January-early February and notify students of admission/rejection by April 1st. Admitted students often have a month to decide where to attend and usually must notify the college by May 1st. Failure to meet notification deadlines can result in a withdrawal of the offer of admission.

 2.  Early Admission programs include Early Decision (ED), Early Action (EA), and ED-EA hybrids. They enable students to apply early, usually in November, and receive the admission decision earlier, usually by January. Applying early is a strategy because it can impact both the likelihood of admission and the ability to maximize financial aid. Early applicants may lose their ability to inform the school of their further senior year accomplishments to enhance their application. They may also lose their negotiating power to ask for more financial aid. For example, under ED, students can’t compare financial aid offers because upon acceptance other applications must be withdrawn and applicants are bound to attend as long as minimum financial needs are met. Since the school knows it is the first choice college, there is no incentive to offer more. (Read more about early admission programs)

 3.  Rolling Admission programs allow students to submit applications almost year-round (from fall through summer at some schools) and be notified of the college’s decision within a few weeks of applying. To improve admission, financial aid, and housing chances, students are encouraged to apply early.

 POCSmom’s DIY College Prep Insight: Students should choose an admission program as carefully as they chose their college list to maximize their chances for admission and financial aid. Create a master calendar to include deadlines for each application. Apply sooner rather than later and before deadlines for all college admission applications.

*POCS: Parent Of a College Student

*POCSmom’s DIY College Prep Insight: College Students Love Affair With Social Media

Cliché: Stay in touch.    
POCS Reality: College students stay connected via the Internet.

 

What is the main focus of a college student’s attention?

  1. College classes
  2. Frat parties
  3. College football

 Actually none of the above-this was a trick question because a recent study found the Internet is the love of college students’ lives. The Cisco Connected World Technology Report dated September 11, 2011 conducted an online survey of over 1400 college students ages 18–24 and over 1,400 employees ages 21–29 between May 13 and June 8, 2011 in 14 countries including the U.S. What they found was-of college students and young professionals:

Roughly half of Students (49%) and End Users (47%) consider the Internet to be ‘close’ in importance to water, food, air, and shelter in their lives; and one-third of respondents in each subgroup consider the Internet to be as important as these critical needs.

AND

About two-thirds (64%) of Students would prefer to have access to the Internet versus a car—driven by significantly large proportions of Students in China, Japan, India, and Germany.

Hear Tom Gillis, vice president at Cisco, talk about the next generation of workers and technology.

A cynic may think virtual reality is replacing reality but why not have the best of both worlds?

POCSmom’s DIY College Prep Insight: The internet is the way more and more people around the world are communicating, networking, and socializing. Soon, more folks than not will have lived their entire lives connected virtually to others, mixing business with pleasure. Consider it the next frontier and explore. Just maintain some balance and get up to smell the roses, do some exercise to stay fit, and stay engaged with those in closer proximity. Bonus: balance can help avoid the Freshmen 15.

College students and the rest of us can benefit by using social media responsibly.

*POCS: Parent Of a College Student