Higher education can lead to a higher earning job after graduation — but student debt can often stand in the way of financial stability for new grads. Many students take out loans to pay for some or all of their postsecondary education. In fact, 43 million borrowers currently owe a total of $1.6 trillion in student debt. But many students lack understanding of the implications of taking on an unaffordable student debt.
Making informed decisions before starting college can help students make the most of their investment in their education. With smarter borrowing, students can earn their degrees, enter the workforce, and launch their careers while staying away from burdensome debt and unexpected repayment terms that are all too common for U.S. college grads.
“As a former financial regulator and college President, I have seen too often how students lack clear, simple, and transparent information on how to borrow wisely to pay for college,” said Sheila Bair, Student Debt Smarter’s Senior Advisor. “You deserve an education that is meaningful and interesting to you, but also one that will help prepare you for your post-college career and make you more, not less financially secure.”
National charity Be Strong has partnered with Student Debt Smarter to help students make informed financial decisions while avoiding mental and emotional stress along the way. Many young people don’t have mentors or guidance when making important life decisions, leading them to feel alone and overwhelmed. Others try to avoid adding financial stress to their parents or guardians, leading students to give up or compromise on their college plans.
“I’m very excited to partner with Student Debt Smarter – supporting our advocacy for innovative, thought provoking, and credible resources for students. America’s young people have a lot on their plate and it’s vital that we guide them on the importance of educating themselves fully and exploring all of their options before making any major decisions – including funding your higher education – that will impact your life for years to come,” said Ashleigh Cromer, Be Strong’s CEO.
Student Debt Smarter offers a free, easy-to-use online Affordability Calculator to help students make informed borrowing decisions as they begin their higher education journeys. Students can input their desired major, college, start year, and where they plan to live after college to get recommendations on how much they can afford to borrow. The calculator breaks down expenses and income estimates post-graduation, explaining how different borrowing choices can play out in the future.
“The affordability of student borrowers’ loans will be heavily influenced by their earlier choices of school, major, how long they take to graduate, and where they want to live after they do so,” Bair said. “Our calculator lets prospective students easily input any number of variations based on these choices before they commit to a particular school or major and level of borrowing. You can have fun seeing how changing the inputs affects how much income you are projected to earn and how much you will have leftover to comfortably repay your student loans after covering essential expenses. That information is designed to help inform your decisions before you commit to a particular college and financial loan package, including understanding the total amount of college debt that will be affordable to you.”
Visit StudentDebtSmarter.org to get started.