Who still believes college sticker prices matter?
(MoneyWatch) Although college price tags are meaningless, slightly more than half of U.S. families are ruling out colleges and universities based on published prices, according to a new College Board survey.
Some 58 percent of students from lower-income families and 62 percent of those from middle-income backgrounds are likely to eliminate schools from contention based simply on price. In comparison, 48 percent of affluent households crossed colleges off their list because of price.
Despite the stubborn belief that price-tags matter, two-thirds of students who attend private and public colleges in this country receive some type of tuition break. At private institutions, 85 percent of students receive an institutional scholarship or grant.
Finding a college's real price
What's discouraging about Americans' misconceptions about college costs is that there is now a valuable tool available to help families look beyond those irrelevant sticker prices. Nearly a year ago, all colleges and universities that participate in the federal financial aid program (and that's nearly all of them) were required to provide so-called net price calculators on their websites.
These calculators have the potential to be revolutionary because they are making college pricing transparent for the first time. They can empower families to make smart decisions about which schools will be affordable and which would be financial disasters.
As I mentioned in a post about net price calculators this summer, this online tool allows parents to obtain a personalized estimate of what a particular college or university will cost long before a student ever applies. I urge parents not to allow their teenagers to finalize a college list until they have used the cost calculator for each school.
According to the College Board study, however, only 35 percent of students reported using any online financial aid calculator. With more than 50 percent of students ruling out schools based on price, colleges need to do a much better job of letting prospective students know about the availability of these calculators.
