Myth Buster #1: Sticker Price is What You Actually Pay for College

College comes with a lot of myths attached. Will your professors drown you in homework? Probably not. Does attendance even matter? Definitely. Is there any point in visiting a college that isn’t well-known? If a school suits your interests, it’s always worth checking out.

Not all myths are so harmless. One of the most misleading myths about college is the idea that a school’s sticker price is what you actually pay. In reality, sticker price doesn’t factor in every single fee. To add more confusion, it also doesn’t include financial aid factors like student grants and scholarships.

So, what do you actually pay for college? And why is the average net price calculator not always helpful? Let’s dive into sticker price and net price in higher education.

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Your Future, Your Finances

In 2008, the federal government mandated that colleges provide a net price calculator for prospective students. A net price calculator (NPC) breaks down the exact cost of a higher education program. This includes tuition, room and board, supplies, transportation, and more.

Sounds like a good idea, right? In reality, most NPCs are clunky and prone to over or under-estimating college attendance costs… sometimes up to two or three times the actual amount.

Let’s dive into a quick example. Imagine you’re a local high schooler who dreams of attending San Diego State University. According to the SDSU website, in-state students living on-campus owe $32,110 per year. This total includes college tuition costs and fees, books and supplies, food and housing, transportation, and miscellaneous and personal expenses.

For many, the sticker price of $32,110 is too high. And because this is a basic estimate, it doesn’t factor in need or merit-based financial aid. If it did, that annual cost would drop to $22,000—a much more affordable price point for most families. Inaccurate estimates like this can have a profound impact on your future.

Unfortunately, cost of attendance estimates from the average NPC aren’t comprehensive. A non-specialized NPC spits out averages for first-time and first-year students. Sometimes, the data they rely on is out of date. Other times, they don’t factor in details like merit aid or military benefits.

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Inside the Dream NPC

An NPC should create a reliable cost estimate based on a college’s direct and indirect expenses, and a student’s financial aid circumstances like grants and scholarships.

Here at Meadow, we take that mission seriously. Our NPC doesn’t just cover direct and indirect expenses. It also factors in the exact financial circumstances that are unique to each student and the college they’re interested in. Whether a former foster care youth, an active member of the military, or just another high school grad, a comprehensive NPC helps you understand what options you have when college hunting.

And what about financial aid? After all, 92% of college students rely on financial aid to fund their higher education. Whether federal or private, college scholarships and grants are forms of free money that will lower the overall cost of attendance. And considering they come in all shapes and sizes, it’s important that you understand how they affect your favorite school’s final net price.

Ready to see what you really owe—beyond sticker price?

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This Is What You Actually Pay for College

Direct Expenses (covered under sticker price)

Direct expenses are costs you are billed for directly by the school.

• Tuition and fees: College tuition and fees aren’t nearly as standard as they seem. Tuition and fees shift based on whether you’re an undergraduate, graduate, full-time, part-time, or online learner.
• On-campus housing and meal plans: Most colleges offer different rates for on-campus and off-campus students, as well as lowered costs for those who live with family. Meal plans also shift according to meal type and quantity.

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Indirect Expenses (covered under sticker price)

Indirect expenses are costs that come with attending a school, but that you are not billed for by the school. Many families assume that indirect costs will be minimal, but they can add up quickly—and even be greater than direct costs.

• Books and supplies: This covers textbooks and supplies required for coursework. These change for each major. For example, art majors might need to fork out monthly subscriptions for Photoshop or supplies like canvases. Keep in mind that some schools offer book lending and reused book sales, which lower overall supply costs.
• Transportation: This covers all costs related to transportation. Schools in large cities usually offer monthly transportation stipends for public buses and subway lines. In areas where driving is common, many schools charge for parking passes.
• Personal expenses: This covers any type of miscellaneous expense, whether a monthly cell phone bill or using on-campus washing and drying machines. Given how subjective personal expenses can be, price estimates from schools portray a very basic average.

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Scholarships & Grants (free money that is not covered under sticker price)

Many students rely on college scholarships and grants to pay for school. These are offered based on financial need and academic or athletic merit.  Meadow’s net price calculator always factors in scholarships and grants before generating a price estimate.

• Merit-based aid: Aid offered to students based on academic, athletic, or other achievements. This might include test scores, athletic talent, or another skill like debate.
• Need-based aid: Aid offered to students based on financial need. Federal student aid offers grants and work-study programs to eligible students. The Pell Grant is the most common type of grant from the federal government. State grants, issued by state governments rather than the federal government, are available for state residents enrolled in undergraduate programs. Institutional grants are awarded by a school (based on their own criteria) to help students cover the cost of attendance.

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