By Peter Sacks
Sophisticated consumers of higher education always understood that unless they were very wealthy they would rarely have to pay the full sticker price of college. By contrast, information-poor students, often from lower income families, were often unaware that a college's stated price was not really the price. Believing that high-priced schools were clearly unaffordable, many high-achieving students from lower-income families would rule out even applying to such colleges, unaware of the relationship -- peculiar to American colleges and universities -- between sticker price and net price.
An amendment to the Higher Education Act that went into effect on Oct. 29, 2011 was supposed to alleviate these uncertainties. It required every institution participating in federal financial aid programs to install and display "net price calculators" that would allow families to estimate the net price unique to their circumstances. Congress intended this requirement to increase transparency, and hoped the calculator would be easy to find and relatively simple for students and parents to use. Many experts thought the calculator would be a game-changer.
Recent evidence casts doubt on their rosy predictions. In one study, researchers surveyed 2,000 college-bound juniors and seniors about their experiences finding information on college websites. They found that fewer students used the calculators after the mandate went into effect because students had difficulty locating them. Another 2012 report from the Institute of College Access and Success identified the same problem, finding that colleges buried their net price calculators in "obscure" places on their websites. My random inspection of college websites confirmed this analysis.
The College Board Gets Involved
Creating a calculator should be simple. According to U.S. Department of Education guidelines, the prominently displayed calculators should simply "approximate But instead of the simple approach -- adopting a freely available federal template meeting all federal requirements -- many institutions are choosing far more complex solutions purchased from private vendors. Indeed, the new law launched a fledgling industry.
Among the entrants into the net price calculator industry is the College Board, which has contracts with dozens of institutions across the country. Because the College Board also provides SAT testing and scholarship services to undergraduates, the addition of the net price calculator allows the College Board to obtain a great deal of private information about students and families. This not only puts the College Board in a position to "cross-sell" its products to students but also enhances the company's ability to sell that information to institutions as lead generators for recruitment and enrollment.
According to federal rules, colleges must allow students to access their net price information without making them register for an account. While colleges can request personal information, they can't prevent access to their net price calculators to students who wish to remain anonymous. In the College Board's case, however, it's not clear that students can keep their information private.
The case of Smith College, a College Board client, illustrates the problem. It took several steps to find the net price calculator on Smith's website. Students and parents who might not be aware of the "net price calculator" terminology would be hard-pressed to find it at all. From the homepage, I found several tabs that might have led me to the calculator. I clicked on a tab called "For Parents and Families." That got me to the second page in my hunt, which contained information about posted tuition and fees, how to make payments, and so on. I hit a "Prospective Students" link, the third webpage in my search, which had links to information about applying for aid, determining financial need, and, finally, a net price calculator. When I clicked on the link for the net price calculator, I was directed to the College Board.
The College Board directed me to either sign in or enter as a guest. In order to keep my information confidential, I chose to sign in as a guest. I worked through the calculator, providing information about wage income, income from assets and investments, home price, and so on. After filling out five pages of detailed information, I got to a sixth page that asked whether I wanted to save my data to get my estimated net price or whether I wished instead go straight to the result, without saving my data.
Although I wanted to keep my information private, I decided to save my data. Wrong move. After hitting the "save my data" option I was directed to a College Board page for signing in or signing up for College Board services. In the end, the College Board got me anyway, despite my intention to remain private. Without registering for a College Board account at that juncture, I would have had to start over from the beginning, because the site did not permit me to go back to the previous page.
The College Board has a material interest in invading students' privacy. Mary A. C. Fallon points out that the College Board uses registration for its net price calculator to create a captive audience for "solicitations for other services from the organization and its partners." Of course, these schemes are antithetical to the amendment's designers. The net price calculator should serve primarily to provide students and families with the information they need to truly make informed decisions about college costs. Taxpayers should send a clear message to the College Board and other such institutions: Market your brand on your own dime, not ours.