The Net Price Calculator – A Helpful College Planning Tool

In our work as Certified Financial Planner™ professionals we assist clients with college planning for their children and grandchildren. While there are many variables that go into a college plan, having a good estimate of what the total annual cost (tuition, books, room & board etc.) of a prospective college is one of the most important. While this information we call the “sticker price” is not all that hard to obtain, the problem is that not everyone pays retail. There are many students that earn scholarships (academic or needs based) or are eligible for various grants and loans. These scholarships, grants and loans should be subtracted from the sticker price to come up with a more accurate “net price”. The net price will vary depending on a family’s financial circumstances, how many children in a household are currently attending college and various other factors – and each college will use this information to come up with its own formula for granting assistance packages.

Trying to estimate the net price for any given college is callenging, so we were pleased when theHigher Education Opportunity Act included a provision that required each postsecondary institution that participates in the Title IV federal student aid program to post a net price calculator on their website by October 29, 2011.  We have used net price calculators on a number of college websites and found that they are generally helpful but that not all net price calculators provide the same level of detail. The Higher Education Opportunity Act included minimum requirements that must be met and the Department of Education provided a generic calculator template that many colleges adopted. Other institutions, primarily private, have developed customized calculators which are more robust and do a better job reflecting an individual’s unique circumstance. It makes sense for private colleges who risk losing candidates based on initial “sticker shock” to provide a clear picture of their net price, which in many cases is less than the candidate expected. While not perfect in every case, the net price calculator is a much welcomed step toward making college costs more transparent.

Below are links to net price calculators on some California public and private college websites. Take a look and let us know what you think, also feel free to give us a call if you have any questions regarding college planning.

Cal Poly (and other Cal State schools), USC, Stanford, UCLA, UC Santa Barbara, UC Berkeley, Westmont, Claremont Mckenna

The past year reminded investors that they should hope for the best, prepare for the worst, and be thankful when reality does not match their fears. Investors entered 2011 with hopes that the world economy would   continue recovering from a long and painful deleveraging process. Equity markets had posted two straight years of positive performance, central banks remained committed to pro-growth monetary policy, and major developed nations were focused on reducing debt.

By mid-year, however, optimism faded as troubling events around the world dominated headlines. The devastating earthquake and tsunami in Japan, political unrest in the Middle East, rising oil prices, a US credit downgrade, the threat of another global recession, and an escalating debt crisis in Europe weighed heavily on markets. As stock market volatility returned to global financial crisis levels, investors faced a major test to their discipline and staying power.

Although US stocks experienced some of the highest volatility in years, the broad US market delivered flat performance in 2011. Developed markets logged negative returns, and emerging markets had mixed performance, with most countries also underperforming the US. The bright spots were in the fixed income arena, where a flight to quality triggered by the euro debt crisis and US credit downgrade boosted returns on US government securities, inflation-protected securities, and municipal bonds.

The above headliner graph features some of the year’s most highly publicized events in the context of the Russell 3000 Index, a broad indicator of US stock market performance. These events are not offered as an explanation of market performance, but as an illustration that a volatile news environment can challenge even the most disciplined long-term investors. read more…

By Weston Wellington

Vice President -Dimensional

He is no longer with us, and the world is poorer for it.

A restless college dropout, he founded a wildly successful company whose innovative products touched millions of lives. He was a brilliant, dictatorial, and cantankerous leader, relentlessly pushing his staff to solve one impossible problem after another. He had no use for conventional market research, and trusted his own vision to create products with little detectable demand that flew off the shelves upon introduction. He zealously guarded his personal privacy but reveled in his role as a master magician on stage when introducing his firm’s latest innovations to eager crowds of industry followers. Stockholders wore big smiles as the shares vaulted to one new high after another. In many ways, he was the antithesis of the conventional corporate chieftain, and despite his demanding persona, he was revered by employees, customers, and even competitors to a greater extent than almost any other chief executive in recent memory. read more…

In our current volatile financial market it can be tempting for an investor to loose site of their financial plan and let emotional decisions replace their disciplined investment approach.  This behavior can be detrimental to financial goals as it often leads to scenarios where investors end up buying when the market is high and selling when the market is low (the opposite of what they are shooting for).  The financial media can exasperate this situation with their attention grabbing headlines and stable of talking heads who’s opinions should be kept in perspective – after all they are in the entertainment business and are driven by TV ratings or internet clicks. read more…

Since the onset of the financial crisis in late 2007, the Federal Reserve has used interest-rate cuts and other policy tools in an effort to fuel economic growth. Economists can debate the effectiveness of these policies, but everyone can agree that today’s low interest rates are a two-sided coin.
 

Consumers, businesses, and government all benefit from low borrowing costs. But on the other side, savers and investors earn almost nothing on their cash balances. This has been the case in most months since 2008, when the Fed cut short-term interest rates to near zero. Worse yet, investors are actually losing wealth in real terms. The inflation-adjusted yields on short-term Treasury securities have been negative in most months since October 2010. (Nominal yields reflect the stated interest rate, while real yields are adjusted for inflation.)
  read more…

Welcome to our blog! This is where we will post our insights into the world of financial planning, asset management and corporate retirement plans. We will also provide links to articles and resources that can benefit our readers. We hope you enjoy our posts and will provide us with your feedback.

The Peak Wealth Team