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.

The CCWP received sparse praise during an April 5 meeting of the Society American Business Editors and Writers ( S.A.B.E.W.). The meeting included a panel about student debt. Pauline Abernathy, Vice President of The Institute for College Access and Success (TICAS), was one of the panel members. TICAS is an Oakland, Calif. nonprofit organization that endeavors to increase access to higher education for all Americans. Abernathy, formerly an advisor to Philadelphia Mayor Michael A. Nutter employee of the Pew Charitable Trusts, Abernathy mentioned the new program during her presentation. She said that the CCWP was “long overdue.” She added that it permits the borrower to choose a repayment plan and apply online.

Also see: Young Student Loan Borrowers Are Bagging the Home Mortgage and Auto Markets

But others do not feel the website is helpful.

Laura Perna, professor of education of the Graduate School of Education at the University of Pennsylvania, said she has been researching these issues for more than a decade. She is the co-author of a new book that will be released in June 2013 titled The State of College Access and Completion: Improving College Success for Students from Underrepresented Groups (Routledge, 2013).


“There is lot of confusion about how to pay for college,” Perna said. “The U.S. Department of Education’s new website on student loans reflects its recognition that better information is required.”

According to Perna, the current challenge is not simply to provide more information but to understand how to provide information that is understandable and useable, as well as, some that reflects a student’s individual circumstances. She said that ideally we would have a system of higher education where the costs of attendance would be affordable to students, their families and taxpayers. But as student appropriations from states have been declining, tuition and fees have been increasing, and available financial aid is insufficient to meet the financial needs of all students. Moreover, the current system of financial aid is quite complex, with many different sources and types of financial aid.


Regarding the Obama administration’s program, she feels that it could possibly be helpful but far from the solution needed.

“I have my doubts about it,” said Perna. “I do not think we need more websites. There are other websites available. Given the complexity of student financial aid, it is not sufficient to simply point them to a website. Students and their families have legitimate concerns about how to pay for college. Should they borrow? If so, how much? From what sources? Should students work while enrolled? These are just some of the many questions that students and their families have. This website is not going to solve this problem.”

Also see: Rural Areas Give Incentives to those with Student Loan Debt

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