University Business - October 2009 - (Page 26)

financial aid be too complicated. “We just want to break down the myth of sticker price and get beyond it,” Miller explains. “This is to give students some indication that they will not [necessarily] be paying that full price.” The Education Department took the same simple approach for the data that higher ed institutions must provide to populate the calculator. IHEs will be required to provide at least the data in the template, but they can add data to provide a more accurate estimate of their net price. At a minimum, each institution must provide the following data: • Estimated total price of attendance • Estimated tuition and fees • Estimated room and board • Estimated books and supplies • Estimated other expenses (including personal expenses and transportation) • Total estimated merit- and need-based grant aid • Estimated net price (price of attendance minus grant aid) Administrators will need to use data from their own systems to calculate the numbers to be entered into these tables. Miller encourages institutions to customize their calculators. “We approached this thinking that we’ll lay out the basics and it is in your institution’s best interest to customize this as much as you can afford and have time to,” she says. Start PreParing today Mary Sapp, assistant vice president for planning and institutional research at the University of Miami, predicts that institutions will likely encounter challenges when implementing the net price calculator and offers steps institutions can take now to ensure they are prepared. The first step is to get the word out. After the Education Department releases the template, institutions will have only two years to develop policies and procedures to test, implement, and update their calculators. Financial aid adminis26 | October 2009 trators need to make sure the appropriate departments are aware of the requirements and the deadline so they can collaborate to successfully implement their school’s calculator. Second, these departments will also need to reach some preliminary decisions, including what calculator will be used. Institutions have three options: use the template issued by the Education Department, customize the template, or use a calculator developed by an outside organization (several organizations are currently developing calculators that will comply with the law). students and families. A fundamental challenge institutions face is providing a net cost estimate for future years. If you use data from the past year, it may provide inaccurate net cost estimates because of cost and/or aid changes from year to year. Institutions need to develop policies and procedures to accommodate annual increases in tuition and aid, as well as any changes to financial aid and tuition policies. CUStoM CalCUlator iSSUeS Those considering a custom calculator should consider several issues to ensure that their calculator fits the school’s goals and policies. Schools must balance simplicity with accuracy to find a happy medium. A calculator that is too complex could discourage students and increase the administrative cost of maintaining it. A calculator that is too simple may not provide an accurate net cost estimate. “There is a tradeoff between accuracy and complexity,” says Robert Collins, vice president of student financial aid at the University of Phoenix. “You need to balance the way that you present this to students.” Institutions may also need to omit some groups, such as athletes and employees, that will distort the net cost estimates, says Sapp. She adds that institutions will save themselves many headaches by providing an accurate assessment of a student’s likely net cost. She recognizes that students won’t receive exactly what the calculator estimates but notes that student complaints have not been an issue for institutions that already have calculators. Sapp’s comments illustrate the importance of a clearly worded disclaimer that is prominently displayed with the calculator. The law requires a minimum disclaimer, but institutions should consider customizing this to ensure students understand the limits of the calculator. universitybusiness.com Schools must balance simplicity with accuracy to find a happy medium. Sapp says each option has its benefits and drawbacks. For example, using the template will likely be the easiest and cheapest way to comply, but it is unlikely to capture the unique factors that dictate an institution’s net price because it is designed to accommodate a broad range of institutions. Third, Sapp and others involved with developing the template encourage institutions to test their data in the calculator template so they are not surprised by the results. Albert Hermsen, director of financial aid at Wayne State University (Mich.), recommends using recent institutional data, putting it in the template, and looking at the highs and lows and the distribution of students. This will help administrators discern if their calculator fits the institution’s COA and financial aid policies and what factors—possibly athletic aid or outside scholarships—throw off the calculator. Testing can also help administrators decide what data their institution should use to provide an accurate net cost for http://www.universitybusiness.com

Table of Contents for the Digital Edition of University Business - October 2009

University Business - October 2009
Contents
Editor's Note
College Index
Company Index
Advisory Board
Behind the News
Viewpoint
Financial Aid
Lessons in Video
Dining Halls of Distinction
Lost in Space
Independent Outlook
Internet Tech
End Note

University Business - October 2009