The Higher Education Opportunity Act requires all 7,000 universities that provide federal financial aid to install a new device called a Net Price Calculator on their website by Oct. 29 of this year.

The calculator is an online tool that tells students how much attending a university will actually cost by inputting information about their financial status and lifestyle. The calculator then displays the actual estimated price a university will cost, including aid eligibility.

The calculator would allow a student to compare prices of different universities before applying, said Mary Fallon, spokeswoman for Student Financial Aid Services. Currently a student doesn’t know how much a university will really cost them until they are accepted, she said.

Fallon said that many times people with low incomes who are eligible for financial aid do not apply.
She said with the new calculator, students would be able compare the affordability of colleges, and then would hopefully be more motivated to fill out financial aid forms.

Fallon said a study by researchers from Harvard University, Stanford Universtiy, University of Toronto and H&R Block in 2008 followed students who simultaneously received professional FAFSA preparation and personalized eligibility information.  The researchers found those students were more likely to submit the aid application, enroll in college the following fall and receive more financial aid than those who did not have help.

Clara Capron, director of financial aid at Western, said institutions could choose to use the U.S. Department of Education’s template for the calculator or develop their own.

Fallon said because of differences in the type of calculator, some might be more accurate than others.
One of the concerns of the calculator is that it dilutes aid to students at institutions that provide limited grant assistance to middle-income students, Capron said. It also does not take into account different pricing based on programs, and the estimates only apply to full-time, first-time undergraduate students, she said.

The University of Arkansas has had the most advanced type of calculator, made by Student Aid Services, installed on their website since fall of 2009. This specific calculator is being used by almost 100 colleges, Fallon said.
Kattie Wing, director of financial aid at the University of Arkansas, said so far students using the calculator have had a good experience.

“It benefits prospective students,” Wing said. “It has been a good thing to help people, and it is available to them 24/7. It just gives them a good idea of what they need.”

Wing said although she cannot prove a correlation between the calculator and applications, there has been an increase in student financial aid applications at the university since last year when the calculator was installed.
When using the calculator, students must input information varying from tax history and family income, to whether or not they live on a farm.

The calculator computes net price by taking the full cost of the university, subtracting the potential student aid — not including private scholarships, work study or loans — and dividing it by number of students seeking aid, Capron said.

Western junior Ivy Donelson is currently not on financial aid but applied for it initially.

“The (financial aid) process was time consuming and confusing,” she said. “I didn’t get much out of it.”
Donelson said she thought the new program sounded really helpful and more students might be able to get financial aid because of it.

Western junior Jordan Ejde said he agreed.

“This sounds like it would be more logical,” he said. “I hope it works.”

Fallon said one of the promising things about the calculator is that it will make conversations about higher education and finances happen sooner in families.