By Allie Ciaramella, Communications Manager
Choosing the right college can be a complicated decision for students and families. The complex and oftentimes confusing financial aid process can make it difficult for students to understand college costs, evaluate loan options, and figure out to how much debt to take on. To help make this process a bit easier, the Consumer Financial Protection Bureau (CFPB) offers a host of tools and resources for students and families as they navigate the financial aid and college decision making process.
In particular, students and families may find the CFPB’s Financial Aid Comparison Tool to be helpful during this time of year, when colleges are issuing financial aid packages. The bureau launched the popular tool in 2012, and says users (who can submit feedback on the website) appreciate its intuitiveness, clarity and side-by-side comparisons of college costs, aid offers and repayment prospects at up to three different institutions.
“The choice of where you go to school could be one of the biggest – if not the biggest – financial decisions that people make,” said Seth Frotman, Student Loan Ombudsman at the CFPB. “We really just wanted to help students, help families, help future borrowers better understand what they were getting into – and that’s everything from how much debt they’re taking on to whether their loans were federal or private and what the implications were.”
Here is an overview of the bureau’s online tools and how they can help students and families make an informed decision on where to go to college and how to pay for it.
Financial Aid Comparison Tool
The Financial Aid Comparison tool allows students to compare financial aid offers for up to three schools at a time. If a student doesn’t yet have a financial aid offer from a school, this tool can also help show where to find and compare relevant costs and provide a better idea of how college costs and financial aid might impact him down the road.
Frotman said confusion over aid award letters – on things as basic as whether they contain loans or grants, and what the difference is – is common among underrepresented students.
“For students – and especially the most vulnerable students, who are having these financial challenges where a few hundred dollars could make the difference between getting a degree and dropping out, [these offers] are really important,” Frotman said.
Student Financial Guides
These financial guides are designed to help students make informed decisions on choosing the right loan to help pay for college. These guides can also help consumers understand key differences between federal student and private loans.
The CFPB has noted concerns with borrowers not maximizing their federal loan eligibility before taking out private loans, which are typically more expensive and offer fewer consumer protections.
“We very much view our work in tandem, in conjunction with things like the Department of Education’s College Scorecard,” Frotman said, noting a recent push toward transparency for consumers. “The more information students have and future borrowers have, the better.”
Repay Student Debt
Paying off student debt can be confusing. The CFPB’s Repay Student Debt tool provides information and advice on how to pay off student loans based on some basic information about a borrower’s situation. The tool is intended to point borrowers in the right direction and help them learn about some of the options at their disposal.
The CFPB’s Office for Students and Young Consumers is dedicated to helping students as they prepare to make the important decision on where they will go to school and how they will finance their higher education. For consumers who have experienced problems dealing with their student loan servicer or any other type of financial product or service, the Bureau encourages them to submit a complaint either by phone to (855) 411-2372 or online at cfpb.gov.
“Our work is focused on people who have found themselves in pretty historic times, in terms of the debt load we require them to get for a postsecondary degree,” Frotman said, adding that low-income families are still trying to escape the crippling financial repercussions of the Great Recession. “We’ve seen a real shift in this country toward more and more reliance on student loans, and I think that that is just a trend that we continue to see.”
Make sure to stay up to date on the Bureau’s work to help students and young people access and finance their educations at cfpb.gov/students.