How you can lower your "net" cost for college

With Major League Baseball playoffs underway, so is the season for college financial aid. Let’s see if you’re in the game to receive assistance.

You can find plenty of financial aid “ballpark” estimators out there, though they vary widely in accuracy. And now that the Federal Application for Student Aid (FAFSA) filing period opened on Oct. 1, you can use these tools to gauge your chances of getting aid.

Every college must provide aid calculators on their websites. While they’re helpful, they aren’t the final word on whether your family will receive help. So don’t be discouraged if the numbers don’t initially break in your favor.

According to a paper published last year by Abigail Seldin of the ECMC Group and University of Pittsburgh researchers Aaron Anthony and Lindsay Page, college aid calculators can generally provide a reasonably accurate picture of how much aid most families can obtain, but they aren’t always spot on.

Here’s the first bit of wisdom you need in tackling the aid question: There’s often little relationship between a college’s advertised or “sticker” price and its “net” price, which is what your family actually pays after all grants, tuition discounts, scholarships and work-study programs are awarded.

In fact, the disparity between the sticker and net price is often huge, especially for lower-income families, the study found.

For four-year state schools, tuition, fees, room and board averaged about $20,000 for the most recent academic year, according to the College Board. But the net price was about $6,000 a year lower, or $24,000 over four years.

At private, four-year colleges, the sticker price was about $44,000 annually, with net costs around $17,000 less, or $70,000 over four years.

But you have to realize that every college is different. Some private schools may offer a free ride, while mammoth state schools won’t offer much assistance beyond loans, which don’t count as aid.

As I experienced in searching colleges for my daughter, a $60,000-per-year private college might be a better deal than a major state university. It all depends on the student, the family’s financial condition and a school’s ability -- and willingness -- to provide aid.

The most heartening truth upfront is that some schools simply have a bigger pool of money to hand out, while state schools might be severely pinched by a lack of fiscal support from their statehouses (California and Illinois are good examples).

That means you have to dig further, ignore the initial price tags and work through the calculators to arrive at the best net prices.

First, catch your breath when you see initial numbers in the six figures, and keep in mind one thing: You have myriad ways to save on college, and it’s part of a multilevel process that takes time. You can still find a debt-free degree if you know where to look.

Examine your student’s academic record. If she’s an above-average student with high grade-point average and test scores, she may qualify for merit awards, which aren’t based on financial need.

Then run the numbers. Here’s where the rubber meets the road. A net price calculator depends on many variables: How many siblings are in college? Are there single parents? How much do the parents earn, and what is their adjusted gross income? The more detailed the information -- this is all entered into the FAFSA -- the better the opportunity for aid.

Who’s likely to garner the most aid? Again, it depends on the institution and the family’s financial situation. That’s why the net price calculator, although not completely accurate in all cases, is an essential tool.

Given how wide the variation is in net prices, it argues for casting a wide net among elite, private colleges and big state schools.

Let’s compare two schools: The University of Michigan-Ann Arbor and Amherst College in Massachusetts. The former is a Big-10 college with nearly 30,000 undergraduates. Amherst is a well-regarded private school with about 1,800 students.

At Michigan, the average annual cost is around $16,000 for in-state students, according to College Scorecard. Only 34 percent of Michigan graduates have federal loans upon graduation.

Drill down, and you get a better picture of how much students pay based on family income at Michigan. Those earning between $48,000 and $75,000 annually pay about $11,000 a year. Those making under $30,000, pay half of that.

At Amherst, only 16 percent have federal loans, and the average net price for families making from $30,000 to $48,000 is under $5,000 a year. In contrast, its sticker price is $65,330 a year, or $261,000 for a four-year degree.

I know I’m comparing apples and oranges here, and these are superficial financial profiles. Both are great colleges in their own right, but you have to go the extra yard to see which one is the best fit and value. 

To get a fuller picture, you would need to enter a lot more family financial information. On College Scorecard, that means clicking on “calculate your personal net price.” You can also do this on any college calculator.

The best takeaway is that research pays off. Do the math and some homework to get the best net price. It’s well worth your time to make the effort.