If you’ve ever experienced a sudden, unexplained rise in your cable bill, you’ve probably experienced something like this: After calling the cable company and enduring twenty straight minutes of deafeningly loud advertisements for the latest sequel to Horrible Bosses, you finally get an operator on the phone. You express your displeasure and threaten to switch to another company. Without hesitation the representative immediately pitches you a new “limited time offer” that includes more channels for less money than you were originally paying. This offer wasn’t listed on the website or advertised anywhere, but must simply be reserved for irate customers with one foot out the door.

The lesson here is that cable companies are not exactly beacons of transparency—unfortunately, and this may surprise you—neither are colleges. Most college-bound students and their families eye the list price of a prospective school when deciding if it is a financially viable option. Yet, in the modern higher education marketplace, the list price and the net price, that is, what the average student actually pays, frequently have little to do with one another. Grasping the difference between the stated and actual tuition costs can revolutionize the way you shop for colleges and can greatly expand your economically sound post-secondary options.

Don’t believe the sticker price

If you shop for colleges the way you shop for other high-expense items, automobiles for example, you would be doing yourself a disservice and greatly limiting your options. While car dealers, like cable companies, are not exactly known for their straightforward pricing methods, we still enter a dealership with a general idea of what we can afford. If our budget allows us to target pre-owned Toyotas with a list price of 14k and nothing a penny higher, then we can be pretty darn sure that even if we are the best negotiator in the entire world, the 40k Lexus in the same showroom is not going to be realistic option for us. Evaluating college costs, however, could not be a more different ballgame.

Let’s look at the example of Beantown Barbara, a Massachusetts resident and accomplished high school student who would love to attend a small, private liberal arts school but is being told by her middle class parents that this is off the table unless she wants to take out massive loans. Barbara had been interested in high-caliber schools like Reed College in Portland, Oregon, Vassar in New York, or even Wellesley College the prestigious women’s college right in her own backyard. Her SATs and grades are likely good enough to gain acceptance at all three but she and her family are turned off by the Lexus-level pricing, as each school costs in excess of $40,000 per year in tuition alone. Wanting to avoid accumulating unnecessary undergraduate debt, Barbara decides that UMASS, at an in-state price of 14k, is probably her best bet.

Unbeknownst to Barbara and her family is the fact that Reed, Vassar, and Wellesley, through generous merit and need-based aid opportunities, actually have average net-prices only slightly higher than UMASS. Amazingly, all three private schools have an average net price (again, what students actually pay) of under $20,000, under half of their respective sticker prices. That doesn’t mean that Beantown Barbara would have been offered exactly that price. It could have been higher but it also could have been lower. Either way, it would have been worth applying and finding out.

Net price by income

Moving a few hours westward for a moment for our next example. As high school student in Ohio, Buckeye Bob finished in the top 10% of his class and kicked-butt on his last attempt at the ACT. His dream is to attend a selective liberal arts school somewhat close to home, preferably in the state of Ohio. Bob shares with his parents that he his top choices are Oberlin, Kenyon, and College of Wooster. Bob’s parents beam with pride until they see the sticker price of these schools—all over $40,000 for tuition.

Bob’s parents are solidly middle class, earning $67,000 a year. The assume they are caught in financial aid no-man’s land, earning too much income to qualify for government grants but not enough to cover the steep tuition costs at a private school. Discouraged, Bob looks at Ohio’s state school options. He knows that he’ll be fine attending a school like Ohio State, Cleveland State, or The University of Akron but he wishes there was some way he could have a shot at his true best-fit schools.

Fortunately for Bob, his guidance counselor understands the concept of net-price at private schools like Oberlin, Kenyon, and The College of Wooster. These institutions tend to be generous with aid and take income strongly into consideration. While Oberlin has a sticker price of over $46,000 per year, the net price declines as you go down the income ladder. The average family whose income exceeds $110,000 pays a bit less than that at 40k. Families making between 75-110k get a sizable discount, with the average falling just below $26,000. Those with an income level in the 48-75k range, like Buckeye Bob’s family pay under $18,000 in tuition. At The College of Wooster, families in that income range pay a little over $16,000. Kenyon College’s average net price for a student like Bob comes in even lower at roughly $11,000.

Most of the state schools in Ohio cost somewhere in the neighborhood of 10 grand per year. Most likely, a university like Ohio State will still cost Bob less than his dream schools, but the revelation about net price may still have moved a school like Oberlin from a complete fantasy to a potential reality.

Don’t forget to select a quality financial safety school

Discovering the concept of net-price should lead you to radically alter the way you go about selecting target colleges—you should feel freed up to aim high and dream big. However, it is crucial to also come up with back-up plan that is a sure thing from a financial end. Most college-bound students are aware of the importance of having a “safety school,” an institution where obtaining admission is pretty darn close to a statistical guarantee. However, for anyone without unlimited funds, selecting a “financial safety school” may be of equal importance.

No one likes to consider doomsday scenarios, but if you thoughtfully selected a quality financial safety school, you can now breathe a little easier as you await financial and merit aid notifications from you top-choice schools. In our examples above, UMASS and Ohio State would have made perfectly good financial safety schools (assuming that they were also “safeties” from an academic standpoint) because they were affordable (even at 100% of the list price) and not schools that our sample students found undesirable. In picking a financial safety school, don’t just pick a random school that happens to be relatively inexpensive. Target a school that you would genuinely like to attend, considering for location, availability of majors of interest, extracurricular activities, etc.

Understanding that the list price and the net price are two very different concepts will help to broaden your college search and may just put your dream schools within financial reach. Don’t believe us? Call your cable company today and start enjoying the full gamut of premium channels for a fraction of the price.

College Transitions recently published net price data for every selective institution in the United States. Please click here to view the list.

Dave Bergman

Dave has over a decade of professional experience that includes work as a teacher, high school administrator, college professor, and independent education consultant. He is a co-author of the book The Enlightened College Applicant: A New Approach to the Search and Admissions Process (Rowman & Littlefield, 2016).