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What Is College Net Price and How to Calculate It

College Net Price: The Real Costs of a Degree
Rebecca Safier
Rebecca SafierUpdated June 9, 2023
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When you’re exploring college costs, it’s easy to get sticker shock when you first catch sight of a school’s full cost of attendance. Fortunately, most students don’t pay this full sticker price. Instead, you’ll pay a net price, which is the cost of tuition and fees minus any grants or scholarships you receive. Once you have your net price, you can figure out how to pay for it, whether through savings, work-study, student loans, or other financing options. When you’re deciding among colleges, focus on your net price rather than the sticker price, so you can make an apples-to-apples comparison. 

What Does Net Price Mean for College Costs?

So, what is net price for college? Net price represents the amount you’ll actually pay for college. It’s the college’s published sticker cost minus any grants or scholarships you receive. Let’s say the college’s tuition and fees for one year add up to $35,000. If you receive $10,000 in grants and scholarships, your net price will be $25,000. Students who are eligible for need- or merit-based grants and scholarships may have a significantly lower net price than the school’s initial sticker price suggests. Even if a college looks too expensive at first glance, your final costs could be within reach after you factor in gift aid. Note that net price doesn’t include work-study, student loans, or other money you’ll have to work for or pay back. While those options may be listed in your financial aid award letter, they don’t factor into your college’s net price. 

How Do You Calculate Net Price?

You can use the College Board’s net price calculator to estimate costs at participating schools. Colleges also share net prices calculators online, generally through College Board or on the financial aid section of their website. You can head right to your school’s website or use the U.S. Department of Education’s search tool to track it down. It may take 20 minutes or so to use a net price calculator, since it asks for several pieces of information to estimate your college costs. You can speed up the process if you gather your documents before you start. Different calculators will have different requirements, but you may need your parents’ tax returns, W-2s, or bank statements on hand. To use a net price calculator, you’ll enter personal information, such as your: 
  • Name
  • Address
  • Date of birth 
  • College start date
  • Intended major 
  • High school grade point average (GPA)
  • Class rank
  • SAT or ACT scores 
  • Income and assets 
Based on the information you input, the school’s calculator will estimate how much financial aid you might be eligible for. Then, it will subtract your anticipated grants and scholarships from its sticker price to give you a net price. 

Are College Net Price Costs Calculators Accurate?

College net price calculators are helpful for estimating your cost of attendance, but they’re just estimates. You won’t know exactly how much you’ll receive in grants and scholarships until you receive your financial aid award letters. What’s more, these calculators don’t take into account any outside scholarships you might earn from private organizations. Pursuing private scholarships can lower your net price and make college more affordable. There is a caveat to this rule, however. Some schools practice scholarship displacement, meaning they’ll reduce your grants if you earn outside scholarship awards. If your school takes part in this practice, your outside scholarship awards may not lower your net price after all. It’s also worth noting that some net price calculators may have outdated facts and figures. Tuition costs often increase every year, and it’s possible that some schools don’t update the figures as often as they should. Finally, keep in mind that your net price can change from year to year. If a school’s tuition increases or your financial aid award decreases, for instance, the net price for your sophomore year could be higher than it was for your freshman year. 

College Net Price vs. Sticker Price

A college’s sticker price will almost always be higher than your net price, unless you don’t qualify for any financial assistance. The sticker price is the college’s cost of tuition and fees before any financial aid is applied. According to the College Board, here’s the average annual sticker price for tuition and fees by school type:
  • Private non-profit four-year college: $39,400 
  • Public four-year college for out of state residents: $28,240
  • Public four-year college for in-state residents: $10,940
When you first see a school’s sticker price, you might wonder if college is still worth it in 2023. Fortunately, the  average annual net price for students is significantly lower:
  • Private non-profit four-year college: $14,630
  • Public four-year college for out of state residents: Not available 
  • Public four-year college for in-state residents: $2,250
Federal, state, and institutional grants and scholarships can lower the sticker price for students and bring a seemingly unaffordable institution within reach. 

Does Net Price Include Loans and Interest?

A college’s net price does not include student loans. It only includes grants and scholarships you don’t need to pay back. To cover the remaining amount, you might consider borrowing student loans. Make sure to submit the Free Application for Federal Student Aid (FAFSA) to put yourself in the running for federal grants, work-study, and student loans. As an undergraduate, you may be eligible for Direct unsubsidized and subsidized student loans. In the 2023-24 academic year, both loan types come with fixed interest rates of 5.50% and an origination fee of 1.057%.However, they also come with borrowing limits, which may be lower than what you need. If you’ve maxed out your eligibility for federal loans and need additional funding, you could consider a private student loan. Shop around with banks, credit unions, and online lenders to find your best offer. Private student loan rates and terms will vary depending on the lender, your credit score, and other factors. If your credit improves after graduation, you might also consider refinancing your student loans for better rates. Learn more about how student loan refinancing works here. 

The Takeaway

It’s easy to get overwhelmed when comparing the sticker prices of colleges, especially with today’s ever-increasing costs of tuition (we analyzed the cost of college over time here). Fortunately, the actual price you pay will probably be lower, thanks to financial aid. Instead of focusing on the sticker price, use a net price calculator to estimate your costs after grants and scholarships. Looking at net price can also help you compare colleges and decide which one would be the best fit for your finances. 

3 Student Loan Tips

  1. The main goal of refinancing is to lower the interest rate on your student loans — federal and/or private — by taking out one loan with a new rate to replace your existing loans. Refinancing makes sense if you qualify for a lower rate and you don’t plan to use federal repayment programs or protections.
  2. When refinancing a student loan, you may shorten or extend the loan term. Shortening your loan term may result in higher monthly payments but significantly less total interest paid. A longer loan term typically results in lower monthly payments but more total interest paid.
  3. If you have student loans with variable rates, you may want to consider refinancing to lock in a fixed rate before rates rise. But if you're willing to take a risk to potentially save on interest — and will be able to pay off your student loans quickly — you might consider a variable rate.

Frequently Asked Questions

How do you calculate net price for college?
What is the difference between sticker price and net price for college?
Are college net price calculators accurate?
Does college net price include loans and interest?
What is the average net price of college?
Photo credit: iStock/izusek

About the Author

Rebecca Safier

Rebecca Safier

Rebecca Safier has nearly a decade of experience writing about personal finance. Formerly a senior writer with LendingTree and Student Loan Hero, she specializes in student loans, financial aid, and personal loans. She is certified as a student loan counselor with the National Association of Certified Credit Counselors (NACCC).
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