New Student Debt Affordability Calculator Empowers Students to Achieve College and Career Goals
NEW YORK, June 9, 2022 /PRNewswire/ — The nonpartisan Peter G. Peterson Foundation today launched StudentDebtSmarter.org, a free resource to give high school students practical information and personalized insights into their higher education choices.
The digital hub includes a unique student debt affordability calculator that will help millions of people make more informed decisions about student loans. For the first time, this simple tool will help students, families and their guidance counselors understand and assess the financial implications of their decisions about how to pay for their college education.
The tool focuses on four key data points: the college they are considering; their desired field of study; the year they plan to enroll; and where they intend to live and work after graduation. The calculator allows people to compare options and outcomes to get a better perspective on which colleges, majors, career paths, and locations best suit their personal goals and financial situation, as well as the overall affordability of their student loans once they start working. The tool does not require personal information and will not sell user data to third parties.
StudentDebtSmarter.org also includes independent, expert resources to help students navigate the complex process of applying for financial aid, scholarships, and grants, as well as nonpartisan resources to understand the overall US student debt and economic landscape, as well as related policy options.
The non-profit Peterson Foundation, which promotes fiscal responsibility to ensure a stronger economic future for the next generation, has joined this initiative with a range of respected experts. Sheila Bayer, former president of the Federal Deposit Insurance Corporation, former college president, and a leading national spokesperson on student debt issues and college affordability, is a senior advisor to the initiative. Other collaborators include the Institute for College Access & Success; Moody’s Analytics; the Center for Bipartisan Politics; American Institute of Enterprise; and Center for American Progress.
“For most young people, borrowing to pay for college will be their first meaningful interaction with debt, and it’s a critical set of decisions they will have to live with for years to come,” said Michael A. Peterson, CEO of the Peterson Foundation. “However, navigating the complex student loan system can be confusing and frustrating, and the lack of clarity can lead to uninformed decision-making. Student Debt Smarter is designed to demystify the process, adding transparency and resources easy to understand to better inform young students about these important choices.”
“Regardless of the outcome of the current student loan forgiveness debate, new borrowers can use this one-stop resource to make smart decisions about their financial future,” Bair said. “As a former college president, I have seen too often how students lack clear, simple, and transparent information on how to borrow wisely to pay for their college education. The Student Debt Smarter tool will help families access the data they need to make sustainable decisions systemic challenges in higher education that need to be addressed, including cost, access, equity, and competency-based learning path to a future better.”
About 43 million Americans held a total of $1.6 trillion of outstanding loans at the end of 2020, with an average outstanding debt of $42,150. About one in five undergraduate borrowers default on their college loans over a three-year period.
The Affordability Calculator includes information on thousands of educational institutions, individual university programs, and geographic regions, revealing a wide range of options and outcomes. The tool allows each student to learn and design the financial and educational structure that best suits them.
“Whether taking out student loans makes financial sense or could spell financial disaster depends on a range of factors,” said Mark Zandi, chief economist at Moody’s Analytics. “Student Debt Smarter takes these factors into account and therefore helps students determine under what circumstances student loans will work for them.
People with college degrees generally earn higher incomes and experience lower unemployment rates, and have a better chance of moving up the economic ladder. However, students often take out loans without fully understanding the implications, which can put a young person on a financially precarious path that makes it more difficult to achieve their goals. Smarter decisions will help more students reap the many benefits that can come from higher education and improve economic opportunities for the next generation.
“Prospective students should have access to the information they need to make more informed decisions about how to fund their higher education,” said Kevin Miller, associate director of higher education at the Bipartisan Policy Center. “By promoting sustainable student loan choices, this tool will help individual young borrowers as policymakers continue to seek broader improvements to the system itself.”
About the Peter G. Peterson Foundation
The Peter G. Peterson Foundation is a nonprofit, nonpartisan organization dedicated to increasing public awareness of the nature and urgency of the major fiscal challenges threatening America’s future, and to accelerating action towards them. To successfully address these challenges, we strive to bring Americans together to find and implement sensible, long-term solutions that transcend age, party lines, and ideological divides to achieve real results. For more information, visit www.pgpf.org.
SOURCE Peter G. Peterson Foundation