Net Price: The Real Story
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What will a college really cost you? Knowing your net price is the key to making an affordable college choice.
Even with a financial aid offer in hand, it can be difficult to figure out just what your actual college cost will be. Here's how to arrive at the truth.
What They Say You Should Pay for College
The government determines what you and your family can afford to contribute to college for the upcoming year. This amount is called your Expected Family Contribution (EFC). It is based on the information you provide in your Free Application for Federal Student Aid (FAFSA).
The college uses the EFC to determine your "financial need." To arrive at this figure, a college subtracts your EFC from its official cost of attendance (COA).
Your Financial Need = COA minus EFC
What You Actually Pay for College
A college may not fully meet your financial need. The sad truth is that most colleges don't have the financial resources to fully meet the financial need of every student.
Not all aid reduces college cost. Most financial aid awards are a combination of "gift aid" (scholarships and grants) and "self-help aid" (loans and work-study). Only gift aid reduces college cost. You must pay back the self-help aid, either by repaying your loans or by working at a work-study job.
Your true out-of-pocket cost, or "net price," comes from three sources: your EFC, self-help aid, and unmet financial need. In other words, you pay for all college costs not covered by gift aid.
Net Price = EFC + Self-Help Aid + Unmet Financial Need
Using Net Price to Compare Awards from Similarly Priced Colleges
See which college has a lower net price. Let's say the COA for an academic year at two different public colleges is $15,000. Your EFC has been calculated as $2,000, so your financial need is $13,000. College A offers you a total award of $8,000. College B offers only $7,000. It seems like College A offers the better deal, but look at how the aid package breaks down:
| Which college is the better deal? | ||||||
| COA | EFC | Self-Help Aid |
Gift Aid | Unmet Need |
Net Price | |
| College A | $15,000 | $2,000 | $4,000 | $4,000 | $5,000 | $11,000 |
| College B | $15,000 | $2,000 | $2,000 | $5,000 | $6,000 | $10,000 |
College A gives you only $4,000 in gift aid. College B gives you $5,000 in gift aid. That means your net price at College B would be $1,000 lower than at College A.
Using Net Price to Compare Awards from Differently Priced Colleges
See how close two net prices are. Now let's say your EFC is $2,000. The COA at a public College C is $15,000. The COA at a private College D, is $30,000. College C offers you a total award of $9,000. College D offers you a total award of $24,000. Yet both colleges could have the same net price.
| Which college is the better deal? | ||||||
| COA | EFC | Self-Help Aid |
Gift Aid | Unmet Need |
Net Price | |
| College C | $15,000 | $2,000 | $4,000 | $5,000 | $4,000 | $10,000 |
| College D | $30,000 | $2,000 | $4,000 | $20,000 | $4,000 | $10,000 |
If the gift aid from private College D was above $20,000, its net price would be lower than public College C's. Believe it or not, this scenario is not uncommon.
Most colleges provide net price calculators to help students and families estimate their net price. You can find the net price calculators for different colleges on the U.S. Department of Education’s website as well as on most college websites.
As you research different schools and consider where to apply, always consider the college’s net price. It provides the most accurate picture of what you might actually pay for college.
