By Kirk Carapezza and Mallory Noe-Payne
It’s a stressful time of year for students who are preparing to send out their college applications. But the next step – figuring out how much it’s all going to cost – can be even more stressful. Now there’s a new effort to make that complicated process a little simpler.
Planning and paying for college is so complicated that the federal government requires schools provide these online calculators to help families figure it out.
Students and families are expected to answer questions like: How much did your parents receive in interest and dividend income? How much were your parents total income adjustments? How much did your parents contribute to non-taxable retirement plans and receive in untaxed income and benefits?
The process is so daunting that many people don’t even finish. Instead, they focus on $60,000 sticker prices, and they assume college will cost much more than it actually does.
“If you’ve introduced a tool that’s trying to increase transparency except nobody can do it, that’s a problem,” says Phillip Levine, who teaches economics at Wellesley College.
According to Levine, 70 percent of people who begin entering information give up because the calculators require nearly as much information as doing your taxes.
“That’s a turn off to people because you go to look at the form and it’s asking you tremendous amounts of detailed information,” Levine says. “I mean who knows what were their ‘adjustments to income’ on last year’s tax form? That’s something that I think very few people would know off the top of their head.”
That’s why Levine has developed a much simpler calculator — one that asks fewer and easier questions. Questions like: What’s your family’s total income before taxes? Do you own a home? Do you have any cash held in a regular savings or checking account?
Levine’s calculator allows families to get a quick, ballpark estimate of what college is actually going to cost them, without too much paperwork. And at this stage in the admissions game, Levine says, that is more important than precision.
“If someone is going to end up paying $25,000 or $20,000, perhaps they don’t necessarily care about the exact amount but what they really need to know is that it’s not $60,000,” says Levine.
Right now, Levine’s college-cost calculator is only available to prospective Wellesley students, but he hopes other colleges and universities will adopt a similar model — to make the idea of paying for college — a bit less daunting.
As seen: http://blogs.wgbh.org/on-campus/2014/12/10/college-cost-calculators-get-makeover/