The Difference Between a School’s Sticker Price and Net Price – And How to Estimate It

When you’re looking at the price of attending a year of college, the costs can be a bit staggering. In many cases, it can scare students off from applying to that particular school. But that number you’re seeing is likely the sticker price, and the amount you actually pay could be significantly less!

Understanding the difference between sticker price and net price for college is essential to choosing the best school for your goals as well as your budget. But why are net costs of higher education different from sticker prices in the first place? And, more importantly, how can you get real insight into what you will be likely to pay if you attend a specific college? We answer these two questions and more below.

Why Are Net Costs of Higher Education Different From Sticker Prices?

Net costs are different from sticker prices because they’re actually two different things.

What is a “Sticker Price” for Higher Education?

The sticker price of a college is the advertised price of attending a full year. It can also be called the “Cost of Attendance” or COA. This number includes tuition, of course, but it also includes:

  • room and board
  • transportation costs
  • fees
  • books
  • other expected expenses

Sticker prices can vary drastically from school to school and location to location. Some of the high prices can result in some serious cases of sticker shock. However, sticker prices do not take scholarships, financial aid packages, and grants into account and most students will not pay the full price!

What is a “Net Price” for Higher Education?

Graphic shows that a college's net price is calculated by subtracting gift aid - scholarships and grants - from the total stick price. College costs add up.The big difference between sticker price and net price for college is that “net price” refers to what the student will actually pay to attend a given school for a semester. Students can arrive at this number by taking the sticker price and subtracting any aid that is expected which can include merit-based scholarships, need-based grants, or other financial aid programs from schools, state government, federal government, and organizations.

In some cases, students may actually receive enough financial aid that it covers their entire cost of attendance so they arrive at a net price of $0!

What Factors Influence Sticker Price vs Net Price for Colleges?

It is important to note that some students will absolutely be required to pay sticker price if they want to attend a particular school. This is because there are different factors at play.

First, net price vs sticker price for higher education can depend on how much the college or university has in the way of endowments. This refers to how much money in financial aid colleges can offer students to lower the sticker price and make it more affordable to attend the school. Many of these programs are need-based and depend on the student’s Free Application for Federal Student Aid (FAFSA) submission and their Student Aid Index (SAI).

Schools with the most endowment available, therefore, have more to offer their students in the way of financial aid. This can result in higher endowment averages per student meaning lower net prices or even free rides. Colleges with smaller programs may not be able to afford to hand out hefty financial aid packages to many of their students, though, and this can mean net prices that are closer to the advertised sticker price.

However, even the schools with the most endowment available in the country can and will run out of money to give students. This can result in students receiving financial aid letters that have higher net prices than they expected.

Other factors that can influence a significant (or lack of) difference in net price vs sticker price for higher education include:

  • The student and/or family’s income and SAI.
  • Merit-based scholarships and grants.
  • Other scholarships and financial aid programs.
  • Work study eligibility.
  • The type of school the student is attending. For example, some states offer free community college to eligible students with demonstrated need.
  • The state or location.
  • State residency.

How Can You Estimate A Net Price?

When you’re just starting your search for potential colleges you’d like to attend, it can be difficult to really nail down the difference between the sticker price and your net price. Most students at this stage haven’t received any financial aid offers, scholarship awards, or financial aid letters just yet. While endowment averages can give you some insight, it’s not enough to really go on for your own personal finances.

However, while you can’t nail down an exact net price vs sticker price number, you can get an estimated net price by using the right tools and techniques.

It can be difficult to really nail down how much you’re going to pay for a year of college without having all the financial tools in front of you. After all, you’re not sure how much you’re going to get from a school until they send the financial aid offer or if you won that scholarship or not. Every college or university also offers different financial aid packages. So a package available at one school may be much larger than the next.

College’s Net Price Calculator

Colleges will usually send financial aid offer letters with your acceptance letter in the spring. But students don’t necessarily have to wait that long to see what they could be offered if they decide to attend. Many schools have net price calculators right on their websites to help you better understand the sticker prices vs net price for the college. For schools that don’t have a calculator, the federal government has one that can help you determine federal student aid. However, this will not account for any merit-based scholarships or need-based aid that you may receive from the college or university.

To determine your personal difference between the advertised sticker price and the net price, you will have to supply some information which can include:

  • Basic information and contact details
  • Dependency status
  • Household information
  • Household income, assets, and finances
  • GPA
  • Academic rigor
  • ACT/SAT scores
  • Extracurricular activities and volunteer work
  • Other college specific questions

Keep in mind that this is an estimate. Even if a school’s calculator supplies you with an estimated net price, it is not a guarantee that you will pay that exact amount. Your cost of attendance could be higher – or even less.

Financial Advisor

If your family has a financial advisor, this can also be a great place to start. And, they may be able to offer you information on financial aid programs you could be eligible for. Since these are professionals who already know your family’s finances, they may be able to provide valuable insight into net price vs sticker price for higher education.

College Raptor’s College Match

Did you know that we offer insight into net price vs sticker price on every college’s profile? When you use College Match or sign up for an account with College Raptor, you can supply information about your finances, location, and academic achievements. College Raptor then uses these details to help you determine your estimated net price for attending each individual school.

College Match gives you valuable insight into what you’ll be expected to pay if you decide to attend a particular college. It also provides information on your estimated debt at graduation, debt burden, and estimated monthly payments. All of these details can help you find the best college for your education goals, career goals, and your wallet.

Don’t Let High Sticker Prices Scare You Off

A high sticker price for higher education can be enough to cause many students and their parents to say, “No way!” to some colleges. That said, students shouldn’t let high sticker prices or even high estimated net costs scare them off from applying. Most students won’t pay that full cost of attendance. When it comes to net price, even with calculators, students never know how much financial aid they’re going to receive until they receive those financial aid offer letters or the results of their scholarships come in.

And, students don’t have to attend a particular college simply because they received an acceptance letter. If the net price to attend is too high or higher than the student expected, they can always choose to attend a different school. Of course, you don’t want to only apply to colleges and universities that are out of your reach financially. But it won’t hurt you to apply to that expensive dream school you have in mind just to see what you’re offered. You might be pleasantly surprised!

Understanding the difference between sticker price and net price for higher education is an essential part of the college search process. By being informed on what you could be eligible for when it comes to financial aid, you can work on getting a true estimate of what you could expect to pay if you decide to attend a particular college. And you never know. You might just receive a generous financial aid package that allows you to attend that very expensive college you’ve been dreaming of!

By utilizing College Raptor’s College Match you can get insight into sticker prices vs net prices for the schools you’re most interested in. Sign up today for free to get started!

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