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By the Numbers: $26,000
03:20 PM EDT
Today’s college students who take out loans to pay for school graduate with an average of $26,000 in student loan debt. A quality higher education is a sound investment, and it’s never been more important. In fact, two out of every three new jobs requires some postsecondary education.
At the same time, college has never been more expensive. About two-thirds of today’s bachelor’s degree recipients borrow money to pay for their education. President Obama is committed to making college more affordable, and a key piece of his plan to make this goal a reality is by requiring improved information and transparency about college costs and value.
Better information gives students and their families the ability to make informed decisions about choosing a school that is best suited to their financial and educational goals. Too often, students and families face confusion when comparing financial aid packages, some of which do not clearly differentiate loans from grants, nor distinguish private vs. federal loans, making it difficult to compare aid offers side-by-side.
Today, Vice President Joe Biden, Secretary of Education Arne Duncan, Director of the Consumer Financial Protection Bureau Richard Cordray and Domestic Policy Council Director Cecilia Muñoz met with presidents and leaders from ten colleges and universities who are committing to providing key financial information to all of to all of their incoming students as part of their financial aid package beginning with the 2013-2014 school year.
Each of the schools will provide the following information:
- How much one year of college will cost
- Financial aid options to pay this cost, with a clear differentiation between grants and scholarships, which do not have to be repaid, and loans, which do
- Net costs after grants and scholarships are taken into account
- Estimated monthly payments for the federal student loans the student would likely owe after graduation
- Vital information about student results, including comparative information about the rates at which students enroll from one year to the next, graduate, and repay their loans without defaulting on their obligations.
To enable more institutions to fulfill this commitment to transparency in helping Americans understand financial aid costs, the U.S. Department of Education, in partnership with the CFPB, is working to develop a model financial aid award letter, or Financial Aid Shopping Sheet, which colleges and universities can adopt to provide prospective students with the type and amount of aid they qualify for and easily compare aid packages offered by different institutions.
For more information:
- President Obama's Blueprint for College Affordability
- Read more about the Financial Aid Shopping Sheet