The College Sticker Price vs. the Reduced Net Price

Posted By Terri Williams on May 11, 2017 at 7:22 am
The College Sticker Price vs. the Reduced Net Price

The words sticker shock come up often to describe the emotions one feels when learning the cost of pursuing a college degree. That’s in part because people don’t realize that a college’s sticker price – its published tuition and fees – can vary greatly from the actual price.

According to the CollegeBoard’s Trends in College Pricing report, these are the average sticker prices and net prices for the 2016-2017 school year:

Published Tuition & Fees Net Tuition & Fees
Public 2-Year in District $3,520 ($440)
Public 4-Year In-State $9,650 $3,770
Private Nonprofit 4-Year $33,480 $14,220


Notice that the net tuition and fees at a public two-year in-district college is actually a negative amount. How is that possible? It requires an understanding of the difference between the sticker price/published amount and the net amount.

Sticker price vs. net price

Jennifer Ma, a senior policy research scientist at the College Board who leads the trends research every year, tells GoodCall®, “The sticker price is the price institutions charge for tuition and fees as well as room and board, in the case of students residing on campus.”

Adding in room and board, transportation and other costs gives the researchers another cost for college that they abbreviate as TFRB. That makes the amounts as follows:

Published TFRB Net TFRB
Public 2-Year in District $11,580 $7,620
Public 4-Year In-State $20,090 $14,210
Private Nonprofit 4-Year $45,360 $26,100


So while the sticker prices are shocking, they’re not the amount that most students will pay. Joe DePaulo, CEO and co-founder of College Ave Student Loans, tells GoodCall®, “The sticker price isn’t specific to an individual, and it doesn’t factor in any financial aid.”

Financial aid, of course, can greatly reduce a student’s cost. “The net price is what the student and/or family must cover after grant aid and savings from tax credits and deductions are subtracted,” Ma explains.

So what accounts for net amounts in negative numbers? For example, in the first table above, average net tuition and fees were – $440 at public two-year, in-district schools. Ma explains that students from families with less than $30,000 in yearly income typically receive enough in subsidies to cover all of their expenses. However, this doesn’t mean that students from higher-income families don’t receive financial aid to offset their total costs. Ma’s research reveals that at private, nonprofit, four-year schools, more than half of the total grant aid that went to students with family income at or above $155,000 exceeded their financial need.

A report  by the American Academy of Arts and Sciences reveals that two-thirds of college students pay the net reduced price. However, one-third pay the sticker price. Ma explains, “The majority of grant aid is awarded based on students’ financial need, and the remaining is awarded based on merit.” As a result, she says, “Students who pay the full sticker price do not receive any grant aid or tax benefits.”

Unlike financial aid, which is based solely on need, merit aid is based on other factors. DePaulo explains, “Merit aid is typically determined by a person’s unique talents or academic performance.”

Shifting aid amounts

Whether based on financial need or merit, students need to understand that both aid and costs can change. Sometimes, schools offer a lower amount for the sophomore, junior or senior year. And even if the aid amount remains the same, if there’s an increase in tuition and fees, and no increase in aid, the student may end up struggling to pay for college.

Sean Moore, a certified financial planner, chartered financial consultant and the founder of SMART College Funding, tells GoodCall®, “It’s not uncommon for students to see their aid packages shrink as the years go on.” He recommends proper planning in addition to researching the consistency of aid packages among preferred schools.  “A good place to start is the U.S. Department of Education’s College and Affordability Transparency Center,” Moore says.

He also recommends looking at the Department of Education’s College Navigator tool. “This site allows families to look at a college’s aid history for freshman as well as all undergraduates, and if there is a decline in the number of aid recipients, the value of the awards, or the percent of need met, families should prepare for less aid as the years go on.”

Ronald Ramsdell, founder and president of College Aid Consulting Services, has spent a quarter of a century counseling students and their families on financial aid. He tells GoodCall® that some colleges play a game called bait and switch or “front loading,” in which students are offered a higher amount to lure them to the school, and then the amount is purposely decreased for the rest of the years.

If the decrease in aid was not a result of financial reasons, Ramsdell offers the following tips:

  • After receiving your financial aid offer for the first year and before you commit to the college, ask them what you can expect from them in the following years.
  • Keep your grades up. If the student retains a high GPA, it will be less likely the school will play money games with you.
  • Get involved with school activities and be an asset to the college.
  • If the college is still playing the game, the student may want to consider one of the college’s rival schools. Many colleges don’t want to lose students to their competitors.
  • The family may want to consider retaining a trained and proven financial aid expert who can negotiate with the college to better their award.



Terri Williams
Terri Williams graduated with a B.A. in English from the University of Alabama at Birmingham. Her education, career, and business articles have been featured on Yahoo! Education, U.S. News & World Report, The Houston Chronicle, and in the print edition of USA Today Special Edition. Terri is also a contributing author to "A Practical Guide to Digital Journalism Ethics," a book published by the Center for Digital Ethics and Policy at Loyola University Chicago.

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