The US Department of Education has released an interactive loan counseling tool to provide financial management data — such as information about current loan debt and estimates for post-graduation debt levels — to students. The new tool is called the Financial Awareness Counseling Tool and can be accessed here.
“Managing student loan debt can be a difficult and confusing process for many borrowers. That’s why the Obama Administration has been working to unravel the mystery of college financing and arm students and parents with the information they need to make smart educational choices,” said U.S. Secretary of Education Arne Duncan.
The new resource is part of the ongoing effort by the Obama Administration to increase the level of cost transparency for education consumers. The Department of Education recently published its annual college cost lists that detail which schools have the highest and lowest published sticker price, which schools have the highest net price once grants and scholarships are factored in, and which schools have the fastest-rising prices.
“Students need to know up front how much college will actually cost them instead of waiting to find out when the first student loan bill arrives. This new tool will help bring new transparency to the process of debt management on the front end and empower students to keep their school loan payments on track and on time after graduation.”
The Financial Awareness Counseling Tool has five interactive tutorials covering topics ranging from managing a budget to avoiding default. Students can access their individual loan history and receive personalized feedback to aid them in understanding their financial obligations. Financial aid professionals can also monitor a student’s progress in using the tool and provide assistance to help ensure they can utilize the information on the site.
The Administration is expected to release its model financial aid shopping sheet at some point in the coming weeks. This shopping sheet will tell prospective students how much aid they will receive in grants and scholarships and how much they’ll need to borrow in student loans to cover the remaining cost of tuition. The sheet will also provide information such as explaining the difference between federal student loans and private loans and data regarding the average post-graduation student loan payment. Adoption of the shopping sheet by higher education institutions will be voluntary, but strongly encouraged by the Obama Administration.