Federal Mandate for Net Price Calculator (NPC) Falls Short on Goals
to Improve Transparency & Empower Consumers.
On August 14, 2008, the federal government enacted the Higher Education Opportunity Act of 2008 (HEOA) stating that by October 29, 2011, each postsecondary institution in the United States serving first-time, full-time degree or certificate-seeking students and participating in Title IV federal student aid programs had to post a net price calculator on its website. Congress laid down this legislative mandate with a clear intent: "to help current and prospective students, families, and other consumers estimate the individual net price of an institution of higher education for a student" with the hope that such information would lead to better decision making on the part of aspiring students.
The NPC legislation, in theory, was designed with two primary goals in mind:
To provide transparency around the issue of college costs (distinguishing the difference between sticker price and net price) in a way that improved consumer decision-making; and
To provide market pressure on the postsecondary system to help rein in costs, costs escalating at rates of inflation even higher than health care.
The NPC mandate, as currently constructed, is failing to do either and should be amended if these two goals are to be met for the benefit of aspiring students.
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