NASFAA has received informal guidance from the Department of Education that requirements in the Higher Education Opportunity Act of 2008 (HEOA) that schools develop a net price calculator (NPC) are not applicable to graduate and professional schools.

The HEOA requires a calculator to be developed in a manner that enables current and prospective students, families, and consumers to determine an estimate of a student's individual net price at a particular institution. While the legislation makes no explicit exceptions for graduate or professional schools, the process for determining net price focuses solely on first-time, full-time (FTFT) students, which would not be applicable to graduate students and schools.

The HEOA specifically defines how a net price is determined. First, an institution must determine the cost of attendance (COA), defined as the average annual cost of tuition and fees, room and board, books, supplies, and transportation for FTFT students. Second, the institution must determine the total need- and merit-based federal, state, and institutional grant aid awarded to FTFT students. This number is divided by the number of FTFT students receiving such aid to determine the average aid award. Subtracting the average aid award from the COA results in the net price as defined by law.

The Department’s informal guidance clarifies that given the process for determining net price, graduate and professional schools would will not be required to provide a NPC. The Department of Education has released a Net Price Calculator template that all other institutions can use to comply with provisions in the HEOA. The law requires applicable institutions to provide a net price calculator on their web site by Oct. 29, 2011 -- two years after the template was posted by the Department.

Posted 11/04/09 to www.NASFAA.org. Redistribution to non-NASFAA institutions is prohibited. Please submit Web site questions or comments to Web@NASFAA.org.