An online tool designed to help families plan out the costs of a college education is the newest in addition to a string of initiatives alleviating the climbing student loan debt.
The Consumer Financial Protection Bureau launched a beta version of its Financial Aid Comparison Shopper earlier this month.
“Student loan debt has crossed the $1 trillion mark and tuition continues to climb,” CFPB Director Richard Cordray said in a press release. “Now more than ever, students and their families need to know before they owe. Our Financial Aid Comparison Shopper helps students make apples to apples comparisons of their offers and pick the one that works best for their financial future.”
The 7,500 school database allows students and families to compare things like estimated loan payment after graduation, grant and scholarship offers and school-specific metrics, such as graduation and retention rates.
The comparison shopper, available at Consumerfinance.gov, is relatively easy to use: Simply enter the names of up to three schools you’d like to compare, and the website does the rest. Students can get a more accurate prediction by entering in additional information, such as the amount of scholarships, loans or work study available. The tool then lays out all of these factors side-by-side in a minimalistic, color-coordinated data sheet.
However, data gleaned from the CFPB’s site is just that: a prediction.
“The challenge with financial aid is that it’s a very hard thing to generalize about because individual circumstances vary,” College of William and Mary Dean of Admission Henry Broaddus said.
Because of this difficulty, Broaddus said that potential students should take any information they receive with a grain of salt.
“There’s one perspective on this that says that it’s dangerous territory,” he said. “Some families may get information and act on it because it’s more specific than data available before.”
While services like the comparison shopper are based on broad indicators, the Free Application for Federal Student Aid — which actually determines a student’s financial aid — is based on much more granular factors. Because of this, the comparison shopper can only provide a rough picture of a student’s financial situation, and it may not match up perfectly with reality.
“It’s not a panacea,” Broaddus said. “The fact of the matter remains that in order for the Financial Aid Office to be good stewards for the funds that they administer, they have to take into account a lot more than would be available through these calculators.”
Current students say they believe the tool would be helpful, if only in specific circumstances.
“I think it really wouldn’t matter if you think you can only afford to go in state,” Tiffany Schoneboom ’12 said. “At least for me, I was only looking at Virginia schools, so William and Mary was an easy choice.”
Further, asking students for information on financial aid before they are accepted to a university is a lot like putting the cart before the horse.
“When I was applying to college, I had no idea how much aid I would get until around decision time. That was the factor that would have been the make or break point,” Schoneboom said. “I feel like this website doesn’t tell people anything they don’t know.”