What Does "net Price" Mean?

net-price-mean Credit: Steve Debenport/E+/Getty Images

The term "net price" refers to the cost of something minus the price of anything that lowers the total dollar value a consumer actually pays, according to U.S. News & World Report. The term is most commonly used by colleges and universities.

When calculating the cost of something, such as the cost of tuition, money that is not provided directly by the consumer is not included in the net price calculation, according to U.S. News & World Report. In the case of college tuition, the sticker price is used as the starting point from which money from grants, scholarships, merit awards and work-study is subtracted to arrive at the net price. In business, the net price may also be called the net cost, as explained by AccountingTools.