Here are two ways to think about the price of college tuition:
1. Sticker price is the full price colleges list in their brochures and on their websites.
2. Net price is the price students actually pay. Net price accounts for the fact that many students receive grants or scholarships. So it can be considerably lower than sticker price.
Quick example. Say you go to a school where the sticker price is $25,000 a year. You get a $10,000-a-year grant. The net price for you — the part you have to pay for through loans, work and family contributions — is $15,000 a year.
Here's the average sticker price and average net price for tuition and fees at public and private colleges in the U.S. over the past 15 years:
The sticker price has gone way up (no surprise). But, because the value of grants and scholarships has also grown, average net price has grown much more slowly. In fact, in the past five years, average net price at private colleges has actually fallen.
Of course, these are just averages, and there's huge variation. To figure out what the net price would be for you at a given college, you can use a tool called the "net price calculator."
As we noted recently, all colleges are now required to post a net price calculator on their website.
The calculator asks a series of questions about the student and the family's financial situation. At the end, you get a page that shows the school's sticker price, the scholarships and grants you'd be likely to qualify for, and the net price you'd be likely to pay.
The calculator provides only a rough estimate. But it can be a helpful way to focus less on sticker price and more on a price that's closer to what you'd actually pay.
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Note: The graphic is based on data in a College Board report called Trends in College Pricing (PDF), an excellent source for big-picture data on college prices.