Glossary · Financial Aid
Net Price
The actual out-of-pocket cost a family pays for one year of college after subtracting all grants and scholarships from the Cost of Attendance. Loans and work-study are not subtracted because they represent debt or earned income, not free aid.
What it means
Net price is the only number that matters when comparing schools. Not the sticker price, not the scholarship amount, not the total aid package. Net price. It is calculated as COA minus grants minus scholarships. Period. Loans are not subtracted because you repay them. Work-study is not subtracted because it is a job.
The federal government requires every school to publish a Net Price Calculator on its website. These calculators ask for family income, assets, household size, and student academics, then estimate the net price. They are directionally useful but not precise. The real net price comes in the award letter after admission.
When families compare schools by scholarship amount instead of net price, they make expensive mistakes. A $25,000 scholarship at a school with a $75,000 COA produces a $50,000 net price. A $15,000 scholarship at a school with a $40,000 COA produces a $25,000 net price. The smaller scholarship at the cheaper school is the better financial deal by $25,000 per year.
Worked example
A family compares net prices across three schools. Fordham: $82,000 COA minus $28,000 Presidential Scholarship = $54,000 net price. TCU: $74,000 COA minus $24,000 Chancellor’s Scholarship = $50,000 net price. Alabama: $32,000 COA (in-state) minus $6,000 Crimson Legend = $26,000 net price. Alabama’s scholarship is the smallest in dollars but produces the lowest net price by far. That $26,000 difference per year between Alabama and Fordham is $104,000 over four years.
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