Shopping around: Terms you need to know

@Money

Some colleges are copying the way hotels and airlines are adding hidden fees to their advertised prices. To avoid unpleasant surprises when looking at different colleges and their costs, you need to make sure you're comparing apples to apples.

Here are the different terms colleges use to quote their prices, along with some advice on which ones to ask the financial aid office about.

Tuition and fees: Tuition is the basic cost of instruction. Fees are mandatory extra charges added to those basic costs.

Some schools list tuition separately from fees, in much the same way hotels and airlines try to make their prices look smaller. But just like with hotels, this practice often leads to unpleasant surprises when it comes time to pay the bill.

In addition, some schools charge different tuition and fees for different courses -- often more for science, music or art courses, for example. And some schools, such as Penn State, charge higher tuition and fees for the more advanced courses generally taken in the last two years of college.

For those planning to live at home during college, the combined tuition and fees cost is the best way to compare different schools' prices. Make sure you add tuition and fees together for every school, and compare the tuition and fees for comparable courses.

Direct costs: Colleges with dorms and cafeterias sometimes list a "direct cost" which includes tuition, fees, room and board. These expenses are considered "direct" because they make up the bills students pay directly to the college.

Remember that students will have other indirect costs, such as textbooks, laundry, and travel. The College Board estimates that the average student spends about $4,000 a year on indirect costs (see Table 1).

Cost of attendance, cost of education or sticker price: The total cost of a year of study including tuition, fees, room, board, books, travel and standard incidental expenses, such as laundry. Federal law requires each college to "make readily available" to current and prospective students its total "cost of attendance."

Some colleges have tried to hide this, and provide simply tuition or "direct costs" to look more affordable. They obey the letter of the law by providing a true cost of attendance only if students ask for it. (Did your college hide its cost of attendance? Let us know.)

See how much that college will really cost

The cost of attendance is sometimes called the "sticker price" because it is the published price before a student's grants or scholarships are subtracted. Think of it like the price on the sticker of a new car at a dealership -- there's plenty of opportunities to lower the price. About 80% of students at private colleges, and 50% of students at public colleges, receive at least one grant or scholarship that allows them to pay less than the sticker price.

If you are sure the student will not receive any grants or scholarships from any school, and doesn't plan to live at home during the school year, then the total cost of attendance is the price you should expect to pay at each school.

Net price: The cost of attendance after grants and scholarships are subtracted out.

Only about half of all college students pay their college's published cost of attendance, sometimes called the "sticker price." The rest receive grants or scholarships that allow them to pay a lower "net price."

Typically, grants or scholarships are awarded to students with "need," such as low income, or "merit," such as good grades or special talents in sports, music, arts or other fields. So the best and neediest students usually pay lower net prices.

A new federal law requires all colleges to post a "net price calculator" on their websites to allow applicants to figure out ahead of time what their net price is likely to be. If you think you will receive any financial aid, the net price is the best and fairest way to compare different colleges' costs.

Out-of-pocket price: Some colleges are posting or sending to students an "out-of-pocket" price, which consists of the cost of attendance minus grants and loans, as well as other financial aid.

While these out-of-pocket prices can help families budget how much cash the student will have to come up with immediately, remember that loans must be repaid with interest eventually, and work-study money must be earned.

NEXT: Find out what you'll really pay To top of page

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