Some Colleges Offer Quotes of Competitors’ Prices. Be Wary.

Every year, a new crop of innocents arrive in the marketplace for an undergraduate degree. Very quickly, they get an education in some unwritten rules.

Families often don’t pay the listed rate. Schools offer website calculators that estimate what families may have to pay, but they make no guarantees. Aid seekers can’t get a real price quote until they’ve applied and been accepted.

And if a student is considering a school like Manhattanville College in Purchase, N.Y., something strange could happen when the student both seeks the estimated cost and gets the real one after being accepted: The college will quote the prices from five competitors, even though the student didn’t ask for them. Those quotes may all be higher than Manhattanville’s, too.

These estimates come with a big disclaimer: They may be wrong. As you can imagine, some of these other schools are not thrilled with this state of affairs. So why would an institution that offers instruction in mathematics and economics put out suspect figures?

That question — and its elusive answers — underlie a basic issue that comes up each admissions season: College applicants and their families are at a severe information disadvantage, and many of the people who could do something about it are in no big rush to make things less complicated.

Since 2011, the federal government has required all colleges to post something called a net price calculator on their websites. College shoppers enter a bunch of financial information, and out comes an estimate of what the college may ask an admitted student to pay.

Net price calculators are much better than nothing. At their best, they prove that a college’s list price is a kind of fiction for many, or even most, students.

The calculators, however, are often confusing. Detailed studies have called out their shortcomings.

The problems with the calculators are nobody’s fault but also everyone’s. The government doesn’t set strict enough guidelines, addled families enter incorrect numbers, and colleges use subpar calculators or don’t regularly update the tool’s formulas. Moreover, while the calculators predict financial need, based on your earnings and relevant assets, they may not try to estimate so-called merit aid, which is based more on what a high school student has done inside or outside the classroom.

When William E. Staib, a technology and financial services industry veteran with six children including a foster daughter, first surveyed this mess as a parent, he — like other parents I wrote about two weeks ago — figured he could build a better tool. Today, over 250 schools license his net price calculators, and his company, College Raptor, offers rankings and other information on a website for consumers.

And those competitor price comparisons? College Raptor generates those as well for client schools.

Here’s how that comparison works. If it’s comparing a client school with a competitor that also happens to be a client, it pulls estimated prices from that other school’s net price calculator — the one that College Raptor runs.

If the competing school is not a client, College Raptor uses federal data and other proprietary mechanisms. Then, according to its marketing materials, “advanced A.I.” takes over. Clients get a list of comparable schools, and they can choose which ones — the more expensive ones, it seems — to show prospective students. They can reveal those competitor prices on the results page of their net price calculator and on the so-called award letters that they send to admitted students.

Three of Manhattanville’s five comparison schools — Marist and Mercy Colleges in New York and Drew University in New Jersey — declined to comment or did not want to criticize a competitor’s tactics. The other two had some objections.

“These tactics make it more difficult for students and families to make accurately informed decisions,” Drew Aromando, vice president of enrollment management at Rider University in Lawrence Township, N.J., said in an email. “There are too many unique variables in the financial aid process for one college to estimate for a student/family what they can expect to receive in financial aid from another institution.”

Shannon Zottola, vice president for enrollment management at the University of Scranton in Pennsylvania, said she worried that posting competitors’ prices might discourage people from shopping further.

“It would be a shame if a family writes off a school that might be the right fit,” she said.

The “note” that College Raptor includes with comparisons that it provides for schools like Manhattanville offers a few caveats, and they’re not in a tiny font, either. “These figures are only net price estimates based on available information from College Raptor, are not verified by Manhattanville College, and may be inaccurate,” it reads. “We encourage you to consider results from each school’s Net Price Calculator and/or your actual financial aid offers and cost at schools you are considering before finalizing your college decision.”

Elsewhere on one of its websites, the company gets a bit more specific. “Generally, our models are able to provide costs that are accurate to within 10-20% of the costs provided by actual financial aid reports or as estimated by colleges’ net price calculators,” it says.

These disclosures are good ones and clear. But if competitors’ price quotes may be inaccurate, why encourage client schools to use them in the first place?

“I don’t lose any sleep over the fact that our answers are not perfect,” Mr. Staib said in an interview. “They are better than anything else that is out there.”

He also said any school that didn’t like the way a competitor was quoting its prices could contact College Raptor and offer data to improve those quotes. When I suggested that this could sound as if he was giving the school two bad choices — either give up data to assist a third party that helps competitors or College Raptor will continue using the inaccurate figures — he did not agree.

“It comes back to the question of what the purpose of a net price estimate is in the first place,” he said. “It’s a good-faith estimate of what a student will pay for a school, where we don’t end up with the problem where they’re turned off from applying for the best opportunity because they’re scared away by the sticker price.”

Indeed, it’s entirely possible that a family sees the comparison and learns that a competitive institution it’s considering is much cheaper than the family thought. It’s also possible that an estimated price that is higher than the one from the original school that a family set out to research will keep the family from asking further questions about that competitor.

College Raptor does not see this as a likely outcome, and I urge everyone reading this column to prove it right. But I worry about people who may not read it or are new to the process of trying to pay for higher education. Nearly half the students at Manhattanville are the first in their family to go to college, and I hope someone has warned them to read every disclaimer they encounter, everywhere in their lives.

Meanwhile, if higher prices from competitive schools appear on an actual award letter, a family might conclude that the school offering admission is a low-price leader. That family might be disinclined to appeal the aid offer and ask for a better price. This could cost the family five figures over four years — and save a school a fair bit more across an entire entering class.

So who benefits from the comparisons the most? “The school,” said Paula Bishop, an accountant and a financial aid adviser in Kirkland, Wash., who sent me the Manhattanville competitor quotes.

Manhattanville’s vice president for enrollment and marketing, Troy L. Cogburn, said he was only trying to help. “College Raptor is a trusted resource,” he said. “We’re trying to provide as much information to a prospective student as possible.”

He wasn’t fond of my use of the term “competitors” and said the other schools that Manhattanville listed were there because they were similar, not necessarily because they had a lot of overlap in their applicant pools.

Manhattanville’s tactics — and it is far from alone — should serve as a reminder that this can be a sharp-elbowed marketplace where the stakes are high. When you’re seeking an undergraduate education that may cost you five times what a car would, spend that much more time questioning the degree dealers selling their four-year experience.

College Raptor’s story does have a tidy ending. Last year, Citizens Financial Group, which has a big business in education lending, acquired the company for an undisclosed price. College Raptor would, the bank said, bolster “our commitment to financial empowerment.”