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Published: Oct 28, 2020 16 min read
Rangely Garcia / Money

Michael Scarlett knew more about college costs than most parents.

A professor of education at Augustana College in Illinois, he understood that the sticker prices colleges advertise are typically reduced dramatically with scholarships and grants, particularly at private institutions.

But when it came time for his son Brendan to apply to college last year, he was still as confused as any other parent. It was a mystery how the final costs and components — loans, grants, work-study — would add up until he received financial aid letters in the spring of his son’s senior year.

“I felt really in the dark,” he says. “It all seemed very hypothetical until we got that piece of paper that had the breakdown.”

As many of the country's 3.7 million high school seniors are working on their college applications this fall, families are facing a perennial question: What will this actually cost me? And just like with Scarlett, the answer will be: You’ll have to wait until you’re admitted to really see.

That riddle has prompted the creation of a handful of private consumer tools that aim to help families get a better answer, including start-ups like TuitionFit and Edmit, and the non-profit MyinTuition. They use a variety of approaches and data sources to estimate a family's true, individual cost of college before the financial aid letters arrive in the mail, or to tell families what families similar to theirs paid at a school.

In doing so, the tools aim to provide some clarity into an opaque college pricing system that makes comparison shopping for a degree more difficult than it is for other major goods and services. And while none of the tools are brand new, they'll be especially relevant in the coming years. It will take a long time for families to recover financially from the pandemic-damaged economy, says Phillip Levine, founder of MyinTuition.

“It’s not like it wasn’t a problem before the recession,” he says. “But now it’s even more important. It’s going to be crucial for schools to be able to help families understand what it actually costs.”

Researchers have found that families routinely overestimate college costs, and nearly half of prospective students in one survey said they were looking primarily at sticker prices. Yet at private colleges, more than 8 out of 10 students pay less than the sticker price. How much less you’ll ultimately be on the hook for depends on a college's financial aid policies, your family’s financial situation, and the student’s qualifications. And you won't know until after acceptance letters come.

That reality — where families are trying to pick colleges without a final price tag — creates problems. It may inhibit some students, particularly lower-income ones who don’t have access to college planning resources, from applying to colleges that would actually be affordable for them. It also makes it difficult to consider a personalized return on investment before you apply.

“We can’t possibly make better choices about payoff without clear pricing,” says Mark Salisbury, founder of TuitionFit, which launched in 2019 to help families compare financial aid letters and get more transparent information about college costs.

The way the system is set up now, families can use the net price calculators on each college's web site to get an idea of what a college might cost them before they apply. (Sometimes they're buried, so the easiest way to find them is to Google the school's name and "net price calculator.") But it's hard to compare multiple colleges at once. To get an individualized estimate, you have to go to each college’s website and answer questions about your family’s income, investments, and the student’s academic background.

The Problem With Net Price Calculators

That process turns people off, says Levine, who's also an economist and professor at Wellesley College. He realized how difficult it was to find out how much he’d owe when his kids started nearing college age about a decade ago.

“I have a Ph.D in economics, and if it’s hard for me to figure out how much college is going to cost for my kids, it’s likely to be a problem for a lot of other people,” he remembers thinking at the time.

The reason the financial aid system is complicated, Levine says, is because of the 10% or 20% of households that have complex finances, like parents who are self-employed or people multiple investments outside of retirement accounts. Those are the exceptions, but that's why there are dozens of questions for all applicants to go through. He wanted to provide a tool for the rest — the regular finances crowd.

He launched MyinTuition, a simplified net price estimator, back in 2013, with the support of Wellesley College. He now runs it separately as non-profit organization. Instead of bogging users down in several intimidating, tax-heavy questions, MyinTuition asks just a handful of questions, in plain language. It takes less than 3 minutes to get a result.

Unlike the other tools, MyinTuition can only provide price estimates for its relatively small but growing list of partner colleges. There are currently 68 on the platform, mostly selective, private colleges.

The creators of Edmit, launched three years ago, also found the existing net price calculators weren’t doing enough to give families clear information. For one, they can be hard to find on a college’s website, says Sabrina Manville, co-founder of Edmit. Once families do find them, many are onerous to use or difficult to understand.

“While there’s a requirement that colleges have (a calculator), there’s no oversight about whether it’s being kept up to date or how easy it is to find and use,” she says. In fact, a report last year found that half of the calculators reviewed used pricing data that was two years — or more — out of date.

Edmit uses data from publicly available sources, as well as financial aid letters from previous applicants, to create what they call “edstimates” for different colleges. Users can search for the colleges that are most affordable based on Edmit's individualized price predictions. In that sense, it's similar to College Raptor, a website created in 2014 that allows users to do side-by-side comparisons of personal estimated financial aid packages and admissions chances.

At a minimum, Edmit needs to know a user’s household income to give an estimate, but the best projections are made if they have an official estimated family contribution or EFC, a term for how much the federal government calculates your family can afford to pay. The income or EFC informs a student’s financial need. Grades, test scores, and data about the high school they attend inform Edmit's merit aid projections. Right now, the company is in the process of updating those projections to account for the large number of colleges that are not requiring applicants this year to submit test scores. Normally, test scores would be necessary to predict merit scholarships.

For Neeta Vallab, confusion — and frustration — over deciphering college scholarships when her daughter was applying two years ago led to a new hobby. She says her new website, MeritMore, can help families build a list of potential college fits, based on their likelihood of receiving merit scholarships.

The website's financial aid projections are more limited than the others, focusing on merit scholarships rather than combining need-based and merit-based aid. Users are a “strong match” for merit aid if their standardized test scores and GPA fall in the top 25% of a college’s student body. (This year, if you don’t have test scores, you can search with grades only.)

“Colleges put out the message, ‘don’t worry, you won’t pay sticker price,’” she says. “But then they make it really difficult to figure out how much you will pay.”

A Kelly Blue Book for Tuition

Scarlett, the professor from Augustana, ended up using TuitionFit to help him and his son make sense of their financial aid offers. He uploaded the letters to TuitionFit's platform, and the website linked him with 188 comparable situations, or letters from similar students based on characteristics including GPA, standardized test scores, and family finances.

He took that knowledge when he went back and asked for additional financial aid from two of his son’s three finalists: Pepperdine University and the University of Minnesota. The family succeeded in getting an additional $10,000 grant from Minnesota, where his son chose to enroll.

Before you have an aid letter in hand, TuitionFit can also show you a list of colleges in your specified price range, derived from the offers shared by similar students. More than 5,000 users created an account during last year’s admissions cycle, but TuitionFit is on track to blow past that figure this year. The company has collected roughly 10,000 actual financial aid letters from students. By continuing to grow that number, Salisbury, the founder of TuitionFit, wants to build a dataset that future students can use inform their decisions — a Kelly Blue Book for college prices, as he likes to say. (When Edmit launched, they likened themselves to a Zillow for college shopping.)

That sort of database would flip the power structure, giving families information they’re desperate for. Regardless of income-level, he says, all families want to know the same thing when starting the college search process.

“They want to know it’s not just a silly fishing expedition,” Salisbury says. “They want to know if they apply to a college that it’s a plausible option financially.”

Neal Morris, who learned about TuitionFit when it was featured in a New York Times article in April, used the service in the spring when his daughter was deciding where to attend. At that point, he already knew the price paid varied from individual to individual. But he was surprised at the extent that colleges reduce their prices, often even after they've given an initial award letter.

“Nobody is paying the rack rate,” Morris, who lives in New Orleans, says. His daughter ended up deferring for a year but plans to attend DePaul University in Chicago. Using the service and talking with Salisbury helped give his daughter some reassurance during a stressful time, he says.

How Reliable Are These Tools?

All of these tools are available for a low — or no — cost. College Raptor, MeritMore and MyinTuition are both completely free for users. TuitionFit and Edmit typically cost $49 and $99, respectively, but both are available for free under certain circumstances. (TuitionFit has a free version to search for colleges in your price range, or you can access the full suite of information for free once you upload your financial aid letter. Edmit is free for students at high schools it partners with, and individuals can access it for free right now, thanks to funding from Edmit’s partner, private student lender SoFi.)

But how dependable are the results these tools spit out?

Mindy Popp, who's worked in college admissions for 20 years and founded Popp & Associates, a private college counseling company, says families should keep in mind that these tools can still only give estimates. (She's familiar with some of the tools, but doesn't use any of them.) The best thing families can do is educate themselves about the cost and financial aid offered at colleges they're applying to, and if these tools do that, then they can be quite helpful.

"Just take them with a little bit of a grain of salt," she says. "You're not going to get your exact answer until you have a financial aid letter in front of you."

Levine is pretty upfront about the ability of his tool, MyinTuition: it’s only a ballpark figure. His goal isn’t to tell students precisely what they’ll pay, he says. It’s to help them understand early on in the college search process that places with high sticker prices can still be affordable. He doesn’t aim to nail down whether you’ll owe exactly $25,000 or $30,000 out of pocket, but instead to quickly show that you won’t pay $75,000.

Kellee Webb, the director of college counseling at The Gunston School, a private school in Centreville, Maryland, thought Edmit was the best tool she'd seen in 13 years of working in college admissions. After learning about it in August, she featured it with parents during the school's college affordability night in September, and she's also showed it to students in a course she teaches.

She likes that Edmit gives users a clear four-year cost projection and breaks down how much they'd owe in monthly debt payments at different colleges. Even if those are only estimates, they still help her students more realistically plan, she says. A recent internal analysis by Edmit found that its prices typically fall within $5,000 of final aid offers.

Scarlett says there is one thing he wishes he could change about his experience with TuitionFit: Using it earlier in the college application process. If they had used the tool during the spring of his son's junior year or the fall of senior year, they could have narrowed down a more realistic set of colleges to focus on.

“We would have spent less time looking at some schools," he says. "Because we would have known they were completely unaffordable."

This story has been updated to clarify Popp's knowledge of the tools included in the article.

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