Obama's New Student Financial Tool--Does It Matter?

Obama's New Student Financial Tool--Does It Matter?

NEW YORK (MainStreet) —The U.S. Department of Education (DoED) announced March 26 that it has two new financial tools available for college students – and presumably their parents - to make more informed choices about the financing of college educations and to better manage their student loan debt. They are called the Complete Counseling Web page (CCWP) and the Repayment Estimator (RE).

How effective these will be seems to be a matter of controversy. Some say that it seems to tell students everything but where to get the money to pay for their loan. Others say it is way past due.

Also see: Can the Student Debt Crisis Outshine the Housing Bubble?

The DoED states that these are part of President Barack Obama’s continuing effort to increase the transparency of college costs. The government wants to make students better debtors. This includes the whole process from choosing the institution of higher education to repayment of the debt.

“With college graduation around the corner, thousands of students will soon start to repay their loans, and we want to help them select the repayment plan that makes sense for them,” said DoeD secretary Arne Duncan, in the communiqué. “These tools give students the information they need to understand how to better manage their student loan obligations. Our goal is to make the entire challenge of college costs much less daunting, and these tools are additional steps in that direction.”

The announcement follows up DoED’s previous efforts to implement Obama’s June 7, 2012 order to improve information available to borrowers about their student loan repayment options. Last July, the DoED published the Financial Awareness Counseling Tool (FACT). This is an internet interactive loan counseling tool that talks about managing budget and avoiding defaults.

 

The CCWP combines a number of resources, including FACT, into one comprehensive site. DoED is already planning to release an upgraded version later this year. Meanwhile, the DoED wants to make it available for this years graduates. Federal student loan borrowers can access both of the new resources by logging onto their accounts at StudentLoans.gov.

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