

There are several components and types of price, net price, and financial need analyzed in this study. The definitions are as follows: “total price of attendance” (or “student budget”) is equal to tuition plus estimated living expenses; “net tuition” is defined as tuition minus total grants received (up to the tuition amount)^{11}; “net price of attendance” is the total price of attendance minus all grants and loans received; “financial need” is equal to the total price of attendance minus the federal expected family contribution (EFC)—which is the federal estimate of the student’s and family’s ability to pay based on the formula (need analysis) prescribed by law; and “remaining financial need” (or “unmet need”) is the amount of financial need that remains after all financial aid, including loans, is subtracted from the total financial need. The two net price variables used in this study—net tuition and net price of attendance—measure the different levels of cost to students and families. The net tuition variable (tuition and fees minus grant aid) represents the amount of tuition paid after grants are received, while the net price of attendance (price of attendance minus all grant and loan aid) represents the amount paid for both tuition and living expenses after all aid is taken into account. Researchers who are interested in changes in tuition and grant aid can utilize the “net tuition” variables included in this report for further study. Because net tuition is equal to the amount of tuition that is paid after all grants have been received, and does not subtract loans, it represents the amount of tuition for which students and families are responsible. In some cases, however, grants will exceed the amount of tuition (and would therefore be used to offset the cost of living), resulting in a negative net tuition amount. In calculating the average net tuition, all negative net tuition values were set to zero. In 1999–2000, the percentage of fulltime, fullyear undergraduates with zero net tuition was 5 percent at private forprofit lessthan4year institutions, 12 percent at private notforprofit 4year institutions, 26 percent at public 4year institutions, and 34 percent at public 2year institutions. Analysis of changes in the net price of attendance can help determine whether total aid—which includes loans that must be repaid—has kept up with changes in total price over time. However, the net price of attendance does not equal the actual price that must be paid for a postsecondary education because loans were subtracted from the total price to achieve this estimate. While grants reduce the amount to be paid, loans only postpone the actual cost since loans must be repaid eventually and with interest. The net price of attendance represents only the immediate, outofpocket costs upon enrollment. The actual cost of a postsecondary education over the lifetime of the student (or parent) who has taken out a loan will be higher. Any increases or decreases in average net price should be viewed with caution. A reduction in net price over time may only signify that students and/or parents have taken out more loans rather than received more grant aid or paid less in tuition. Dependency and income are important considerations when financial aid is awarded. Most students under age 24 are dependent, and their income quartiles are based on their parents’ income. Most independent students are 24 or older, and their income quartiles are based on their own income (and that of their spouse, if married). In addition, independent students are disaggregated by their marital status and whether they had children, factors that are also considered in determining financial aid eligibility. In this report, comparisons of average amounts over time are made using constant (1999) dollars. In most cases, comparisons in constant (1999) dollars were made only between the two survey years at the beginning and end of the decade (1989–90 and 1999–2000), although estimates from the interim NPSAS years (1992–93 and 1995–96) are presented to provide the reader with complete information. Throughout the report, statistical conclusions are drawn at the p<0.05 significance level.

