Student Loan Over $1 Trillion: What to Know Before You Borrow
Learn what your loan payments will be after graduation up front.
By Kathryn Knight Randolph
April 13, 2012
With National Decision Day looming, students and their parents are taking a close look at top college choices and assessing academic offerings and campus body fit. But most importantly, families are taking a look at each school’s affordability.
On Wednesday, the Consumer Financial Protection Bureau launched its latest tool to help educate students and their families on the costs of borrowing to pay for school before they actually commit to borrowing. Known as the Cost Comparison Worksheet, this tool is part of the CFPB’s Know Before You Owe series, which educates individuals on credit cards, mortgages and student loans.
The press release states that “the CFPB kicked off the Know Before You Owe student loan project in October by working with the Department of Education on a draft Financial Aid Shopping Sheet that higher education institutions could use to present families with a uniform, easy-to-understand explanation of the total cost of post-secondary education and their options for financing it. The Financial Aid Comparison Shopper builds on that by helping students to compare the information across schools.”
The Cost Comparison Worksheet enables students and their families to compare up to three schools and see the following:
• Average grants and scholarships awarded per student
• Total necessary to borrow to make up cost difference after grants and scholarships
• Estimated debt after graduation along with the debt burden
Additionally, you can enter each financial aid package that you are receiving from your top choice schools, the contributions that you and your parents are making as well as private loans you may be taking out to finance your education.
With all of this information, the tool provides you with a comprehensive look at what it’s going to take to pay for school now and what it’s going to require of you after you graduation, i.e. the monthly payments you’ll have to make to pay off your student loan debt.
According to the press release from CFPB, the Financial Aid Comparison Shopper has more than 7,500 schools in its database, including vocational schools and community, state, and private colleges. So at this point in the decision process, you’ll most likely be able to access all of the necessary information for your top three choices to make an educated choice.
Inputting all of your data only takes 10 – 15 minutes. Talk to your parents and set some time aside one evening after work and school or during a weekend to go over the tool. With this resource, you’ll be able to make a final decision that works financially as well as academically and socially. Good luck!
What do you think of the Cost Comparison Worksheet? Will it influence your decision on where to attend?