The Requirement

The Higher Education Opportunity Act of 2008 articulates the net price calculator’s purpose as “…to help current and prospective students, families, and other consumers estimate the individual net price of an institution of higher education for a student. The (net price) calculator shall be developed in a manner that enables current and prospective students, families, and consumers to determine an estimate of a current or prospective student’s individual net price at a particular institution.” (HEOA 2008)

The regulation defines estimated net price as the difference between an institution’s average COA (the sum of direct and indirect costs, including tuition and fees, room and board, books and supplies, and other expenses, such as personal expenses and transportation, for a first-time, full-time undergraduate student) and need- and merit-based grant aid awards (HEOA 2008). The regulation does not allow inclusion of private grants and scholarships in the calculation. The federal template’s guide refers to “price of attendance.” However, because “cost of attendance” is most commonly used by postsecondary institutions, most institutions use COA.

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Elise Miller, program director for the U.S. Department of Education’s Integrated Postsecondary Education Data Systems (IPEDS), explained the idea behind the requirement:

“We just want to break down the myth of ‘sticker price’ and get beyond it. This is to give students some indication that they will not be paying that full price.” Elise Miller

(University Business: Preparing for the Net Price Calculator: Avoid Potential Pitfalls by Taking These Steps Today by Haley Chitty, October 2009.)