How Financial Aid Calculators Work

College is getting more expensive all the time. Financial aid calculators can help you create the right savings plan.
College is getting more expensive all the time. Financial aid calculators can help you create the right savings plan.
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Online financial aid calculators can be wonderfully useful tools. However, as you put them to work, keep a few things in mind. First and foremost, consider the source. Calculators hosted on university sites are generally trustworthy, but those you find on other sites may not adhere to the same standards. And although the calculators you find on a school site might be accurate, keep in mind that their primary purpose might be to keep you browsing the site. School marketing departments love to use engrossing tools like these to convert casual visitors into potential tuition-paying students.

Also realize that not all universities provide calculators solely out of goodwill. They do it because they have to. The Higher Education Opportunity Act requires all schools to post a net price calculator to their Web sites by 2011. Although each school will have a financial aid calculator, they can tweak the government's template to their liking. Most will stick to fairly simple calculations, requiring minimal data input from the user, to avoid discouraging potential students.

That's an important fact to remember. Whether you're using a net price calculator, cost estimator or budgeting calculator, the tools are only as good as the numbers you provide. In fact, every school must post a disclaimer indicating that the accuracy of these calculators requires best-quality user input. If you take wild guesses or provide overly optimistic numbers, the calculator's results might make you hopeful, but those hopes might be crushed when you see the real, cold, hard numbers.

So to minimize disappointment and maximize your planning effectiveness, take some time to prepare and use aid calculators properly. To use these calculators, you'll almost always need your most recent tax return, and if you're a dependent, keep your parents' return handy, too. You'll need to know items like taxable and non-taxable income. And you'll need to provide information about your family's size, estimated family contributions and other pertinent details.

Once you've found a few aid calculators relevant to your financial situation, you can put them to use. You'll see how they can help you budget, find aid and grants from private, state and federal programs. And you'll understand how these tools can clarify fuzzy, complicated math into more useful terms.