A study released today by the University of Pennsylvania Graduate School of Education found that some four-year higher-ed institutions are failing to meet federal requirements around how they disclose cost information online.
Since 2008, colleges and universities that receive federal financial aid are required to have net price calculators, or NPCs, on their website. These tools allow students to project how much their cost of attendance will be by factoring in variables such as tuition, financial aid, books and housing, and gauge if a particular institution works with their financing options.
The study examined the websites for 80 public and private institutions. Researchers could find a NPC by navigating directly from the website homepage for just 69 of the colleges. And two institutions did not have a NPC available.
When the tools were available, the study found that the data that these tools used can be confusing or misleading. Nearly 31 percent of colleges offered price calculations based on tuition data that was three years old, and seven institutions used data from the 2014-15 academic year, according to the report. Six did not state what year the tuition data was from.
Some institutions did not differentiate the difference between grants and loans in the cost calculator. And two used a definition of “net price” that doesn’t match how the federal government defines the term, which considers net price as cost of attendance minus grants and scholarships.
“There is a basic compliance issue here,” says Laura Perna, lead researcher on the report. “Institutions have the responsibility to provide complete usable information for students.”
Colleges also vary in terms of what factors they include in cost of attendance. Some present costs as tuition, fees and room and board, while others factor in books, transportation or other expenditures. “If they don’t include [all of] that, it’s misleading to students and limits their ability to compare across institutions,” says Perna, who is also the executive director of the Alliance for Higher Education and Democracy at UPenn.
This isn’t the first time researchers have raised issues with colleges’ NPCs. A 2012 study by the Institute for College Access and Success found that the net price calculators for some institutions were hard to find, or in the case of three colleges, not available at all.
Part of the problem is a lack of accountability. “There aren’t any consequences built in the system for institutions” that fail to meet the requirements, says Perna.
Institutions can choose to build or buy their own NPC, or use a template provided by the U.S. Department of Education. Colleges that used third-party vendors were less likely to disaggregate data around grants from the state, federal or institution level, according to Perna, making it harder for students to determine the source of potential aid.
However, third-party NPCs were more likely to include information the researchers deemed useful that the federal framework leaves out, such as contact information for where to follow up with questions, she added.
What could account for such problems with the NPCs? Some, like updating the data around tuition amount each year, could simply be a matter of neglect, says Perna. But she also warns that “many institutions are facing enrollment challenges and are eager to attract students to the institutions, and if [keeping costs vague] is the motivation, that is a real problem.”
The report includes a list of recommendations for policy makers hoping to improve the cost calculation process. Suggestions include updating the U.S. Department of Education’s NPC template so that institutions disaggregate grant awards by source and costs by major, and specify if the NPC estimates or financial aid options do not apply to any particular groups, such as non-U.S. citizens.
Lawmakers are already paying attention to the issue. On Wednesday Sens. Chuck Grassley (R-IA) and Tina Smith (D-MN) introduced the Net Price Calculator Improvement Act, which would require colleges to make “net price” the most prominent figure on a schools NPC result screen. (Similar bills have been introduced in the past and didn’t move on.)
Among suggestions for institutions themselves, the report advises that colleges make the NPC available and easy to find, and present only a single calculation of the net price, based on the federal definition of net price and using data from the current or previous year.
“If I could pick one thing for institutions to do, it would be to use the federal definition of net price and make that the most prominent figure that's shown,” said Perna. “The fact that it is not being done makes it really hard to compare estimates across institutions.”
