Are you looking for a college to take admission for your higher studies? Are you worried about the costs associated with the admission? Are you stuck in understanding what “net costs” and the “sticker price” are in pursuing higher education? Then, this article can help you navigate the admission procedure by clarifying why the net costs of higher education are different from sticker prices.
Knowing the Sticker Price
The sticker price is the complete cost that colleges take for one academic year. Sticker price includes tuition and academic fees, room allotting and food expenses (if you choose to live on a college campus), and other additional expenses like books, transportation, supplies, and others.
It is the maximum cost that not many pay as they have the privilege of financial aid, grants, and scholarships. Many students drop the thought of attending their dream college by looking solely at the sticker price. In reality, many colleges have great financial aid packages to smoothen your admission procedure and help you achieve your dreams.
What is the Net Cost?
Net cost is the amount one pays after deducting scholarships, grants, and any other financial aid from the sticker price. It is the actual amount you are paying out of your pocket while taking admission. This can further be clarified with an example- if the average sticker price at a private college is around $70,000 per year, then the average net price could be lower by about $30,000.
How Are Net Costs and Sticker Price Different?
Net costs and sticker prices are different mainly on three grounds. Let us identify the differences between the two-
1) Financial Aid
Financial aid is the biggest difference between sticker price and net price. Colleges provide various financial aid packages for students depending on their financial needs as well as academic merits. Financial aids come in different forms but can broadly be categorized into two: need-based and merit-based.
Need-based aid is determined depending on the financial background of a student. The Free Application for Federal Student Aid enables students to get access to financial aid by meeting the required eligibility criteria. Merit-based aid, on the other hand, depends on your academic performance. Students performing best in their academics are granted scholarships to pursue higher education.
2) Institutional Aid
Under institutional aid, many colleges take different prices for admission from different students, considering their financial condition. This opens the door for many students of lower-income families to study at their desired college. Also, through this price discrimination, colleges are allowed to take higher fees from students belonging to affluent families.
3) State Aid
Students having the privilege of state and federal aid can be admitted to their dream college with a significantly lowered net cost. Grants like Pell Grants and State Scholarships are enforced especially for low-income students to provide access to higher education.
Net Price Calculator
Now, by determining why the net costs of higher education and sticker prices are different, the next question that can come to your mind is- “How can I calculate the net price of my college?”
The answer to your question is – Net Price Calculator.
Most of the colleges in the US have Net Price Calculators on their websites to help you estimate what you will have to pay during admission. The calculator needs you to provide the details of your family income, academic performance, and household size to give you a personalized net cost estimation. This will help you determine the affordability of colleges.
It is crucial for students aspiring to pursue higher education to focus more on the net price than the sticker price. Net price gives you relaxation of financial aid, which sticker price doesn’t offer. So, to break the myth that lower-income students can’t study in expensive colleges, students must consider calculating the net price instead of considering the sticker at the time of admission. Now that you are aware of the difference between the net price and sticker price in higher education, you can make a wise decision regarding your admission.