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Hidden Tuition: An Insider's Guide to College Pricing and Financial Aid

Financial Experts Network | Webinar Summary | October 20, 2026

Presenters: Phillip Levine, Professor of Economics at Wellesley College and author of Hidden Tuition: An Insider's Guide to College Pricing and Financial Aid, and Jonathan Sparling, Private College 529 Plan.

College affordability is one of the most challenging financial planning issues facing families. Published tuition prices can exceed $90,000 annually at some institutions, yet the amount a family actually pays may be substantially lower because of need-based financial aid, merit scholarships, and institutional subsidies.

During this Financial Experts Network webinar, economist Phillip Levine explained why college pricing is so complicated, how institutions determine financial aid, and what financial advisors can do to help families make more informed education funding decisions. Jonathan Sparling also introduced the Private College 529 Plan, a prepaid tuition option designed to help families manage future private-college costs.

1. Understanding the Difference Between Sticker Price and Net Price

Levine emphasized that the published price of college is often not the amount families actually pay.

Colleges generally use two forms of financial assistance:

• Need-based aid: Grants and other assistance determined by a family's financial circumstances.

• Merit-based aid: Awards based on academic achievement or other institutional enrollment objectives, which may be available even to families without demonstrated financial need.

Highly endowed institutions can use investment earnings to subsidize students with significant financial need. Public universities receive government funding, while private institutions with smaller endowments frequently rely on tuition discounts to attract students.

Levine explained that even relatively affluent families may qualify for merit awards at certain institutions.

A $30,000 scholarship may sound impressive, but it does not necessarily make a college affordable if the remaining cost is still $60,000 annually.

Key takeaway: Financial advisors should encourage families to compare the final net price of attendance rather than published tuition or the size of a scholarship award.

2. Using Net Price Calculators to Compare Colleges

Levine recommended using each college's net price calculator before developing an application strategy.

These calculators estimate the amount a family might pay after accounting for institutional grants and scholarships.

He also discussed MyinTuition, a simplified college cost-estimation tool he helped develop, which is designed to make preliminary financial aid estimates easier to understand.

However, net price calculators have limitations. Families with unusual financial circumstances, particularly small-business owners, may receive estimates that differ substantially from their eventual financial aid awards.

Levine suggested contacting a college's financial aid office when the calculator does not adequately capture the family's situation.

Some institutions may also offer preliminary financial aid reviews before a student applies, providing greater confidence about potential costs.

Planning implication: Use net price estimates early, but treat them as preliminary projections rather than guaranteed financial aid offers.

3. FAFSA vs. CSS Profile: Why the Difference Matters

One of the webinar's most practical discussions concerned differences between the Free Application for Federal Student Aid (FAFSA) and the CSS Profile.

The FAFSA determines eligibility for federal student aid and is also used by colleges and states for certain other aid programs.

The CSS Profile is used by participating institutions to collect additional financial information for institutional aid decisions.

Levine highlighted two important situations.

Families with multiple children attending college: The federal FAFSA formula no longer provides a direct reduction in the Student Aid Index simply because multiple children are enrolled simultaneously. Some CSS Profile institutions may consider overlapping college attendance when determining institutional aid.

Divorced or separated parents: FAFSA and CSS Profile institutions can evaluate parental finances differently. The FAFSA generally focuses on the parent who provided more financial support during the relevant period, while CSS Profile institutions may request financial information from both parents.

The result is that the same family may receive very different aid offers depending on which institutions the children attend.

Key takeaway: Advisors should understand each college's financial aid methodology rather than assuming all schools evaluate family finances identically.

4. How Assets and Savings Decisions Affect Financial Aid

Levine explained that the ownership and classification of assets can influence financial aid eligibility.

Student-owned assets are generally assessed more heavily than parent-owned assets under the federal aid formula.

Retirement accounts also receive different treatment from nonretirement investment accounts.

Levine encouraged families with limited savings capacity to prioritize retirement funding rather than sacrifice long-term retirement security to build college savings.

He also discussed potential advantages of grandparent-owned 529 plans under current federal aid rules.

However, institutional aid calculations can differ, and decisions about account ownership must consider taxes, control, beneficiary rights, and applicable financial aid policies.

Planning implication: Advisors should coordinate retirement planning, education savings, and financial aid considerations rather than evaluating college funding in isolation.

5. Outside Scholarships and Student Borrowing

Levine cautioned that outside scholarships do not always reduce a family's college bill dollar for dollar.

Some colleges adjust institutional aid when students receive outside scholarships, potentially reducing the additional benefit. Families should ask each institution about its scholarship displacement policy.

He also challenged the assumption that all student borrowing is harmful.

While excessive debt can create significant financial problems, modest borrowing may be reasonable when it allows students to focus on their education rather than work excessive hours.

Levine encouraged families to evaluate borrowing in the context of expected earnings, academic progress, repayment obligations, and available federal repayment options.

Key takeaway: Families should evaluate the actual financial benefit of scholarships and make borrowing decisions based on affordability rather than avoiding all debt.

6. Evaluating a College's Financial Stability

Levine also addressed growing financial pressures facing smaller private colleges.

Institutions with declining enrollment and limited endowments may face difficulty maintaining operations and financial aid commitments.

He suggested examining two indicators:

• Enrollment trends: Persistent declines may indicate financial weakness.

• Endowment spending: Institutions consistently withdrawing unusually large percentages of their endowments may be under financial pressure.

Levine cited approximately 5% as a common sustainable endowment spending benchmark and expressed concern about institutions consistently spending 8%–12%.

These figures are general indicators, not definitive measures of institutional financial health.

Advisors helping families evaluate colleges should consider financial stability alongside academic quality, affordability, and student preferences.

7. Private College 529 Plans: Locking In Future Tuition

Jonathan Sparling introduced the Private College 529 Plan, a prepaid tuition program supported by approximately 300 participating private colleges and universities.

Unlike traditional 529 savings plans, which generally depend on investment performance, the Private College 529 Plan allows families to purchase a percentage of future tuition and mandatory fees at participating institutions using current tuition rates.

For example, if annual tuition is $40,000, a $20,000 contribution could purchase 50% of one year's tuition.

If tuition subsequently increases to $71,600, that certificate would still represent 50% of tuition, worth $35,800 toward the eligible charges.

The purchased percentage varies by institution, and families do not need to select a specific participating college when contributing.

Sparling also explained several flexibility features:

• Funds may be used at nonparticipating eligible institutions under the plan's withdrawal rules.

• Nonparticipating-school withdrawal values are generally based on contributions plus up to 2% annual compounded growth, depending on plan trust performance.

• Beneficiaries may be changed to qualifying family members.

• Eligible unused funds may be rolled into a Roth IRA, subject to federal requirements and plan provisions.

Planning implication: Prepaid tuition may help families manage private-college tuition inflation, but advisors should compare participation, refund values, liquidity, and flexibility against traditional 529 savings alternatives.

8. Five Practical Strategies for Financial Advisors

The webinar provided several opportunities to strengthen education planning conversations.

1. Compare net prices, not sticker prices. Evaluate actual costs after grants and scholarships, including housing, meals, and other expenses.

2. Begin financial aid planning early. Understand FAFSA, CSS Profile, institutional policies, and application deadlines before families finalize college choices.

3. Coordinate asset and savings strategies. Consider retirement accounts, 529 ownership, family contributions, and the impact of financial aid calculations.

4. Evaluate the complete financial commitment. Include potential borrowing, future tuition increases, graduation timelines, and institutional financial stability.

5. Explore alternative education funding arrangements. Compare traditional 529 savings plans, prepaid tuition programs, scholarships, and other funding resources based on each family's circumstances.

9. Common Questions from the Webinar

Q: Should families eliminate expensive private colleges from consideration?

A: Not necessarily. Significant need-based or merit aid may make some private colleges competitive with less expensive institutions. Families should compare estimated net prices.

Q: Are net price calculators accurate?

A: They provide useful estimates but are not guarantees. Families with unusual financial circumstances, particularly business ownership, may need individualized assistance from financial aid offices.

Q: Does having two children in college improve financial aid eligibility?

A: Not automatically under the federal FAFSA formula. However, some CSS Profile institutions consider simultaneous college attendance when awarding institutional aid.

Q: Can unused Private College 529 Plan funds be transferred to another beneficiary?

A: Yes, subject to qualifying beneficiary-change rules. Other options may include eligible withdrawals and Roth IRA rollovers under applicable requirements.

Q: Will artificial intelligence reduce the value of prestigious colleges?

A: Levine acknowledged the uncertainty. AI could change employment opportunities and the value of different educational experiences, but he cautioned against making definitive predictions.

Conclusion: College Affordability Requires Looking Beyond the Published Price

Levine's central message was that families should not confuse a college's advertised tuition with its actual affordability.

Financial aid policies, institutional resources, family circumstances, and enrollment strategies can create substantial differences in what students ultimately pay.

For financial advisors, education planning is an opportunity to help families navigate these complexities while protecting their broader financial goals.

By comparing net prices, understanding financial aid formulas, evaluating savings strategies, and considering long-term costs, advisors can help clients make more informed college decisions.

Fact-Checking and Additional Resources

The following independent sources support and clarify key points discussed in the webinar.

Topic	Verification and source
Sticker price vs. net price	The U.S. Department of Education confirms that net price subtracts grants and scholarships from attendance costs. collegecost.ed.gov
Comparing financial aid offers	Federal Student Aid recommends comparing net prices rather than advertised tuition. Federal Student Aid
FAFSA and multiple children	Federal Student Aid explains the current process for families with multiple students and separate Student Aid Index calculations. Federal Student Aid +1
CSS Profile and divorced parents	College Board confirms that some colleges request financial information from both parents and that requirements vary. College Board +1
CSS Profile institutional methodology	College Board documents institutional flexibility and adjustments for multiple children attending college. College Board +1
Parent reporting on FAFSA	The 2026–27 Federal Student Aid Handbook confirms that financial support, rather than simply where a child lives, determines the reporting parent in relevant divorced-parent situations. 2026-2027 Federal Student Aid Handbook

Official resources and URLs:

• Federal Student Aid: https://studentaid.gov/

• Net Price Calculator Center: https://collegecost.ed.gov/net-price

• CSS Profile: https://cssprofile.collegeboard.org/

• MyinTuition: https://myintuition.org/

• Private College 529 Plan: https://www.privatecollege529.com/

• IRS 529 Plan guidance: https://www.irs.gov/taxtopics/tc313

Important qualifications: The transcript's claims about specific colleges' merit-aid practices, endowment spending benchmarks, and Private College 529 Plan returns were presented by the speakers and have not all been independently verified. FAFSA treatment does not necessarily determine institutional aid treatment. The transcript also did not establish definitive rules for trusts benefiting children; those arrangements require individualized review. Private College 529 Plan terms, including its refund provisions, should be confirmed against current plan documents before making recommendations.

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