Association for Institutional Research
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AIR FYI
FYI 2009-01: Proposed Net Price Calculator Template and Multiyear Tuition Calculator
Prepared: March 2009
Type: Informational
Summary
The Higher Education Opportunity Act of 2008 (HEOA) requires institutions to post on their websites, by August 2011, a net price calculator. The National Center for Education Statistics (NCES) is required to provide, by August 2009, a template for this calculator that institutions may use. According to the HEOA, an institution may use either the net price calculator developed by the NCES or one the institution develops, as long as its calculator includes “at a minimum the same data elements” found in the NCES calculator.
The HEOA also requires the NCES to display a multiyear tuition calculator on the College Navigator website by August 14, 2009. The calculator will provide an estimate of “typical” tuition and fees for each year of the normal duration of the program of study at an institution and an estimate of the total tuition and fees.
RTI International, the contractor for IPEDS, has posted suggestions from the IPEDS Technical Review Panel (TRP) for the multiyear tuition calculator and for the NCES template for the net price calculator (see https://edsurveys.rti.org/IPEDS_TRP/documents/ReportandSuggestions_IPEDS_TRP26_09-02-27.doc).
This FYI describes implications for institutions, summarizes the suggestions being considered, and identifies additional resources for information.
Implications for Institutions
Although institutions will have two years after the NCES calculator template is posted in 2009 to develop their own calculator, they may wish to begin discussions now among financial aid, admissions, finance, institutional research, and IT departments about how they wish to estimate net price—use the NCES calculator or develop their own. For example, some institutions may feel they can provide more accurate estimates of future net price by developing their own calculator that incorporates a more detailed table of historical data, and/or uses an approach that more closely approximates an institution’s financial aid award process. They may also want to start talking about which input variables would be most useful for estimating net price at their institution.
IR officers may wish to forward this AIR FYI to relevant individuals on their campuses. They should also watch for an AIR announcement that the NCES calculator has been made public.
Net Price Calculator Template
In August 2009 the NCES must provide a template for a net price calculator, and starting in August 2011, each postsecondary institution must post a net price calculator on the institution’s web site. The proposed NCES net price calculator template relies on a table of institutional data to generate estimated price of attendance, grants, and net price information customized to the characteristics of individual students.
The TRP suggested the following eight questions be asked of the student using the calculator:
- Age
- Marital status (collect only if <24 years old)
- Number of children (collect only if <24 years old)
- Income (parents’ income if “dependent”; household income if “independent”)
- Number in family
- Number in college
- Living status (on campus vs. off-campus with family vs. off-campus not with family)
- Residency for tuition (in-district, in-state, out-of-state)
The NCES calculator would use items 7-8 to determine price of attendance, based on a table with the institution’s price of attendance reported by living status (on campus, off campus with family, off campus not with family) and residency (in-district, in-state, out-of-state).
The calculator would use items 1-6 to establish the student’s dependency status and create a proxy for Expected Family Contribution, and then “look up” the student’s estimated grants from a second table containing grant data from a prior year provided by the institution. The columns of that table would consist of different prices of attendance (by living status and residency) and the rows would consist of Expected Family Contributions, grouped as follows:
$0
$1-$2500
$2501-$5000
$5001-$10,000
$10,001-$15,000
$15,001-$20,000
$20,001+
Each cell would contain the average grant amount (need-based and merit-based combined) awarded by the institution to students with the combination of price of attendance and Expected Family Contribution represented by the table’s columns and rows, based on data for the most recent year available.
The NCES calculator would provide the following to the student:
- estimated total price of attendance and its four components: estimated tuition and fees, estimated room and board, estimated cost of books and supplies, and estimated other expenses (including personal expenses and transportation) from the first table
- estimated total grant aid (need-based and merit-based) from the second table
- estimated total net price (derived by subtracting the estimated total grant aid from the estimated total price of attendance)
Both estimated grant aid and estimated total net price would be reported as a range. NCES will provide guidance on the appropriate size of the range.
An institution that chooses to use the NCES template will need to populate the “look up” tables behind the calculator with data drawn from its own financial aid records/database.
If an institution chooses to develop an alternative calculator, it must include, at a minimum, the data elements included in the NCES template, although it can add additional input and output items. Each institution can also develop its own method of estimating net price, either using its own table or using a different approach that more accurately estimates its net price for a future year (e.g., one that approximates the institution’s financial aid award process and takes into account anticipated policy changes at the institutional, state and/or federal level, an institution’s guaranteed tuition, and/or the institution’s financial aid policies).
Multiyear Tuition Calculator
Starting in August 2009, the College Navigator website must display a multiyear tuition calculator that projects tuition and fees for the expected length of the academic program for each postsecondary institution. These estimates will be based on the tuition and fees reported on the IC survey for the most recent academic year (for first-time full-time students, by in-district, in-state, and out-of-state residency where appropriate, and for the largest program for those institutions that report by program), and the average annual percentage change in the institution’s tuition and fees for the prior three years.
Comments Requested
Comments regarding the proposed multiyear tuition calculator or the net price calculator should be sent to Janice Kelly-Reid, IPEDS Project Director at RTI International, at ipedsTRPcomment@rti.org by March 31, 2009.
Timelines
August 14, 2008 – H.R. 4137, The Higher Education Opportunity Act, signed into law (P.L. 110-315).
August 14, 2009 – Deadline for NCES to post multiyear tuition calculator on College Navigator
August 2009 – Deadline for NCES to post net price calculator template.
August 2011 – Deadline for each institution to post net price calculator on the institution’s website.
Additional Resources
Multiyear Tuition and Net Price Calculators
Information about the proposed multiyear tuition calculator and the template for the net price calculator is available at:
https://edsurveys.rti.org/IPEDS_TRP/documents/ReportandSuggestions_IPEDS_TRP26_09-02-27.doc
IPEDS
Complete information on IPEDS, including the College Navigator website, is available at http://nces.ed.gov/ipeds.
Information about the IPEDS TRP is available at https://edsurveys.rti.org/IPEDS_TRP/index.aspx.
Legislation
A summary of the HEOA is available at http://ifap.ed.gov/dpcletters/GEN0812FP0810.html.
For statutory language for the topics covered in this AIR FYI see pp. 22-30 of the HEOA at http://frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?dbname=110_cong_public_laws&docid=f:publ315.110.pdf
Related AIR Alerts
AIR Alert # 36. New Disclosure and IPEDS Reporting Requirements in the Higher Education Opportunity Act, August 2008 (http://www.airweb.org/page.asp?page=1601)
Coordinated by the Higher Education Data Policy Committee. All opinions expressed herein do not necessarily reflect the official position of the Association for Institutional Research