Part 1 (of 3)
Education beyond high school is a given for the millennial generation. Yet, the cost of that education can be staggering. For the average family, the cost of sending children to college has over shot the cost of buying a home. College has become the number one investment most families will make.
The question is: “How do you know what colleges are affordable? What is this determination based on?”
Drum roll please! Entering front stage is the Net Price Estimates in GuidedPath. It is part of an overall process GuidedPath uses to help families maximize the potential for scholarships, grants and other money to help pay for college, and to minimize the amount of student debt needed to finish that college education.
GuidedPath’s Net Price Estimates includes new Ratings to use to evaluate a college’s potential college affordability. This is measured by:
- Net Price Ratings
- Need Based Award Potential
- Anticipated Financial Aid Package (need based)
- Merit Scholarships (Average awards)
- International Scholarships
Net Price Ratings
Net Price ratings are calculated by looking at two factors:
1. Average % of need met by a college
2. Percent of students with need fully met.
The combination of these two factors creates a NET PRICE RATING between 1-5 stars. The star ratings are weighted and calculated.
- Schools with poor records of meeting need = 0-2 stars
- Schools with adequate records of meeting need = 3 stars
- Schools with stellar records of meeting need = 4-5 stars
Use Net Price Ratings to see the quality of awards offered by a college. The higher the number of stars a college has, the higher the potential for substantial need based aid (besides student loans). The schools with less stars will tend to be less affordable. This is where the need based award potential is key.
Note: Net Price Rating scale is based on NEED BASED Awards only. It does not include merit based awards.
Need Based Award Potential
Using a student’s calculated EFC (Estimated Family Contribution), pulled from the College Affordabililty Shaper survey, an estimate of the student’s potential need based award potential is calculated. This is a critical number to know because:
- All colleges calculate “need”, but not all colleges meet the full need of a student.
- In GuidedPath, 121 colleges meet 49% or less of a student’s need.
- There are 33 colleges that meet 24% or less of a students need.
The more unmet need, the less affordable a college is, especially for high need students. This factor drives down a college’s net price ratings.
- There are several colleges with 0=1 stars, because their financial aid packages are so dismal.
- Many colleges with 2-3 stars, with adequate financial aid packages
- Less frequent are colleges with 4-5 star ratings, offering substantial financial aid packages
Use the Net Price Ratings to gauge a college’s affordability ratings. Look for 4-5 stars for the best, most affordable schools.
Note: Need Based Award Potential is calculated from the EFC generated by the College Affordability Shaper. If there is no need at a college, the Need Based Award Potential line will be blank. If there is no EFC calculated, the line will be blank.
Anticipated Financial Aid Package (need based)
Parents want to see how much they might receive in aid from a college. This is the Anticipated Financial Aid Package. It is hard to create a college budget without knowing this number!
Merit Scholarships (Average Awards)
Merit scholarships are important to families, and to colleges as well. Knowing the average amount of merit scholarships offered by a college puts a student in a position of negotiation for more money, if needed. If a student has no need, merit scholarships are the source of additional funding for college. This is true for many students from a middle income family. Merit scholarships especially help these middle class students afford college.
International students do not qualify for any need based aid. Paying for college is up to their families. Students from families of modest means, from across the world, want to attend college in the United States. These students need money for college too. Their best resource are merit International scholarships offered by colleges. This is included in the new Net Price Estimates.
Next Blog: Part 2: Below the Surface: Uncovering True College Costs