Yale launches new financial aid calculator

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Photo by YDN.

Yale launched a more sophisticated online financial aid calculator on its admissions website last Tuesday in response to a federal law passed three years ago.

The new calculator aims to simplify the financial aid process for both prospective freshmen and current students. While Yale has offered a financial aid calculator since 2008, other colleges and universities are adding this tool to their websites to comply with a federal law that requires higher education institutions that participate in Title IV federal student aid programs to provide an online tool for calculating the “net price” of tuition and other fees by an Oct. 29 deadline.

To comply with the federal law, known as the Higher Education Opportunity Act of 2008, colleges and universities may either launch a template provided by the United States Department of Education or develop their own customized calculator — so long as it has the same elements as the Department’s model. The calculator must account for tuition rates, median amounts of grant and scholarship aid accepted by students and data specific to individual families.

The University’s newly updated calculator, which was created by the Office of Financial Aid, estimates financial aid packages based on an applicant’s financial information and Yale’s policies, Director of Financial Aid Caesar Storlazzi said in a Monday email. The calculator asks 22 questions about a student’s dependency status, residence and finances to generate the result.

Dean of Undergraduate Admissions Jeffrey Brenzel said in a Monday email that he hopes the University will receive feedback from students and families as they test the new model.

“The Admissions Office relies on the calculator to show the affordability of Yale to our prospective students,” Storlazzi said.

Yale released its initial calculator in 2008 with help from Maine-based company ThinkAhead, Storlazzi said, and adjusted the calculator in May 2010 to include updated costs and data, and to improve the its format and interface. Storlazzi said those adjustments took time because Yale had to revise its contract after ThinkAhead was purchased by Student Aid Services, a company that provides net price calculators to more than 575 colleges nationwide.

The federal law that has prompted many schools to add net price calculators to their websites is meant to help families gauge their true costs by increasing transparency in college financial aid policies, Ronald Ehrenberg, a professor at Cornell University and a leading expert on higher education, said in a Monday email. These types of calculators will be most effective at schools with need-based financial aid, he added, as opposed to the merit-based scholarships.

“The purpose of the law was to give people a much better sense of what the true cost of college is,” Ehrenberg said. “At the Ivies and other schools that base aid solely on financial need, it will be easy for people to learn what their awards will likely be. Hopefully this will provide useful information to people and alter some application decisions.”

Harvard, Princeton, Dartmouth, Columbia and Cornell are among the other schools that have posted their versions of a net price calculator for the 2012-’13 academic year.

While basic elements of the calculators are consistent with the federal template, specifics vary among schools. Dartmouth provides a separate calculator for families with incomes over $200,000 to increase the accuracy of estimates for that bracket, while both Yale and Amherst College recommend that students calculate their parents’ finances separately if they are divorced or separated.

Brenzel said he expects schools to range in the sophistication of financial aid calculators they offer. He added that some colleges and universities may be redesigning existing calculators, and others may be just putting up their first editions.

Fifty-seven percent of Yale undergraduates received need-based aid directly from Yale in the 2010-’11 academic year.

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