My oldest daughter just returned from touring several colleges she's interested in attending next year.
My fingers are crossed that she likes one of my top favorites, North Carolina A&T in Greensboro. I'm also pulling for my alma mater, the University of Maryland, College Park, but she says it's too close to our home, about 17 miles away.
"You won't think it's too close if you have to walk," I said.
Olivia was not amused.
My husband and I have told our daughter that she can apply to any college she likes. But we have saved just enough to cover tuition plus room, board and books for four years based on estimated in-state school expenses. If she gets accepted at a school where the cost is more than the money we have set aside, she has to get scholarships or grants to make up the difference.
She cannot take out any student loans. Nor will we. So all of us need to weigh Olivia's college offers.
This process should be a lot easier, thanks to the Consumer Financial Protection Bureau. It has introduced one of the best college cost tools I've seen, a Financial Aid Comparison Shopper.
This month, about 1.5 million students will be receiving multiple admissions letters, the bureau says. But once they're accepted, their families have to figure out how to pay for school. With total education debt crossing the $1 trillion mark, it's the second-largest source of consumer debt after mortgages, according to CFPB Director Richard Cordray.
Students excited about getting into their top pick might not focus on the fact that most of the financial aid they're being offered is in the form of loans. Or the reverse could be true. An elite school might be more affordable when scholarships and grants are added. The problem is that the financial aid information that families receive is presented differently, and often is hard to figure out.
"We know that putting student loan debt into context is particularly important for students and parents," Cordray said.
As part of its "Know Before You Owe" student loan project, the bureau's shopping tool allows you to select three schools at once and compare tuition, fees and other expenses for first-year, full-time undergraduates. The database includes information from more than 7,500 community, state and private colleges, as well as vocational schools.
The prototype includes the following features:
*Estimated monthly student loan payment after graduation.
*Information about graduation, retention and federal student loan default rates.
*The ability to enter the types and amounts of aid being offered based on information from the financial award letters.
The ability to save your information so that you can review and update it without having to restart the process. You don't have to provide any identifying information.
The worksheet also has a debt burden scale indicating how tough it might be to pay the loan based on the average national salary of graduates with a bachelor's degree. It would be nice to include information on how much of the loans are higher-priced private loans verses loans backed by the federal government.
One of the things I like about the tool is that people can see how much they could be paying every month if they go the student loan route. To drive the point home, the debt is compared to the number of $50 textbooks the loan payment would equal each month.
It took me a few Scooby-Doo "Ruh-rohs" before I understood the comparison. It didn't make sense because students don't purchase $50 textbooks every month. A more eye-opening contrast would be to compare the borrowed amount to multiple car payments or bags of groceries or monthly housing costs. If students see that their estimated student loan payment would end up costing as much as their rent or a mortgage, they might reconsider their college choice if it means taking on a lot of debt.
The tool also has a military benefit calculator that can estimate education benefits for service members, veterans and their families.
Find the worksheet at www.consumerfinance.gov/payingforcollege.