For users interested in learning more about how specific sections of this tool work, scroll down to the relevant section below. Some of this information may be a bit technical, but we want to be open and transparent.
Below is more information on how we developed this version of the tool, including the data we’ve used and assumptions we’ve made.
As part of our Know Before You Owe project, we worked with the Department of Education to create a . Now that hundreds of colleges are adopting this clear and comparable form, we have rebuilt this tool to complement that shopping sheet to help students make comparisons tailored to their individual circumstances.
If your school indicated to the Department of Education that it has adopted the Financial Aid Shopping sheet, the tool gives you the option to upload an XML version of the sheet (an option some schools choose to offer) by pasting in XML code. This step is optional. If your school did not indicate to the Department of Education that it was adopting the shopping sheet, you can still make a comparison by manually entering information from your offer letter.
Start using the tool by clicking on “Get started.” As you type your school’s name in the first field, the tool will autocomplete with the names of schools with similar spelling. The tool should also be able to find commonly used names for a particular school (e.g., type in UCLA and you should find the University of California Los Angeles). The tool uses the Department of Education’s IPEDS list of postsecondary institutions.
After choosing a school, set program length (1-5 years) and program type (Associates or certificate, Bachelors, Graduate). By selecting your program type, the tool adjusts your federal loan limits (see below) and calculates your estimated monthly payments based on the length of your program (see below).
Indicate whether or not you have a financial aid offer from each school. This will help us follow up with the right questions based on your situation.
Using your financial aid offer letter, enter in your first year tuition & fees, housing & meals, books & supplies and other expenses. If you have not yet received your offer letter, you can find the cost information by clicking where indicated. This will take you to the Department of Education’s College Navigator page for this school. Click on the “Tuition, Fees and Estimated Student Expenses” tab to locate cost information to add to your comparison.
After you fill out your Free Application for Federal Student Aid (FAFSA), each college that sends you an acceptance letter should also send you a financial aid offer letter. This should include the types and amounts of “financial aid” being offered to the student.
- are federal grants that do not have to be repaid and are awarded based on your financial need, up to $8,800 per year.
- Military tuition assistance: Tuition Assistance provides support (up to $4,500 per year) for some active-duty servicemembers (active & reserve) who are pursuing higher education. Military TA benefits do not need to be repaid.
- GI Bill benefits offer education benefits for servicemembers and veterans. This funding covers tuition and fees, a monthly living allowance, and an annual book stipend. GI Bill benefits do not need to be repaid (see below).
- are low-interest loans for students with financial need and do not accrue interest while students are enrolled in school. These loans are available up to $5,500 per year for undergraduates and $8,000 per year for graduate students.
- are federal loans for students who demonstrate financial need and do not accrue interest while students are enrolled in school. These loans, which must be repaid, are available for up to $3,500 per year for first year college students. Graduates students are not eligible for these loans.
- do not require students to demonstrate financial need but they do accrue interest while students are in school. All first year dependent, undergraduate students may borrow up to $5,500 per year in subsidized and unsubsidized loans. For independent undergraduate students, this limit rises to $9,500 per year. For graduate students the limit is $20,500 per year.
- are available to graduate and professional students, up to the program’s cost of attendance minus any other financial assistance received. Parents may also borrow PLUS loans to pay for the expenses of undergraduate dependents. Under some circumstances, independent undergraduate students may also borrow PLUS loans. Unlike other federal student loans, eligibility for PLUS loans is dependent on the borrower’s credit
- Loans from your school: A private loan from your school may have variable interest rates, require a credit check and/or a cosigner and lack many of the repayment options available with federal student loans. The tool allows you to adjust the interest rate to match what you have been offered by your lender (see below).
- Private loans often have variable interest rates, require a credit check and/or a cosigner and lack many of the repayment options of federal student loans. Students should explore all of their federal grant and loan options before taking out a private student loan. The tool allows you to adjust that interest rate to match what you have been offered by your lender.(see below)
The tool allows veterans, servicemembers and eligible family members to calculate their GI Bill benefits. The tool assumes the following conditions for students seeking to use GI Bill benefits:
- Veterans will use the Post-9/11 GI Bill (Chapter 33). If a veteran has yet to serve 90 days of active duty service after September 11, 2001; but, is serving in the National Guard or Reserves, they will use the Select Reserve GI Bill (Chapter 1606).
- Veterans have 36 months of remaining eligibility (equivalent to 4 academic years).
- Student is enrolled in at least one class in a physical classroom unless the Department of Education has indicated that this school provides exclusively online education. If a veteran is taking all of their classes online they are only eligible to receive a living allowance of up to $840/month.
Based on what you’ve entered, we’ve come up with a rough estimate of what your monthly payment would be if you borrowed the same amount each year of your program, completed your program on time (based on the program length you provide when you added the school), and paid your loan on a standard 10-year repayment schedule. To come up with this estimate, we’ve made certain assumptions about your total debt at graduation, the interest rate of your loans, and when you’ll begin repayment.
In calculating estimated monthly repayment amounts, we assume that the sticker price or cost of attendance remains constant for the duration of the program and that students take out the same loans (both type and amount) for each year that they are in school. In fact, students may take longer to complete their degrees; institutions have historically increased tuition prices each year; and students may make different financing decisions in different years.
We also assume a standard repayment-term of ten years and that students begin repayment after they graduate and their allotted grace period expires (between 6-9 months after graduating, depending on the type of loan). For federal student loans, we apply the interest rates for originations beginning on July 1, 2017:
- Perkins (for undergraduate and graduate/professional students): Fixed at 5%
- Direct Subsidized and Unsubsidized Loans (for undergraduate students): Fixed at 4.45%
- Direct Unsubsidized Loans (for graduate/professional students): Fixed at 6%
- Direct PLUS Loans (for parents and graduate/professional students): Fixed at 7%
- For all Direct Subsidized and Unsubsidized Loans, the Department of Education also charges a 1% loan fee. For all PLUS loans, there is a 4% loan fee.
These rates are set by the laws governing federal student loan programs, including the Higher Education Act.
For institutional and private student loans, we assume a fixed interest rate of 7.9%, which is identical to the old PLUS loan rate. The tool allows you to adjust that interest rate to match what you have been offered by your lender. However, keep in mind that interest rates on institutional and private student loans may be variable and change significantly throughout the duration of the loan.
Debt at graduation
Based on what you’ve entered, we’ve come up with a rough estimate of how much you will owe in students loans when you begin repayment. We use the same assumptions for debt at graduation as we do for the estimated monthly payment.
Percent of monthly salary: The pie chart shows you how much of your post-graduation income will be spent repaying your student loans. Since institution-specific salary data is not available, this version of the tool uses the average salary one year after graduation for a student with a bachelor’s degree, as reported by the study. Adjusted for inflation, this figure equates to $30,922 per year on a pre-tax basis (a monthly salary of $2,577).
Your debt burden measures your estimated debt after school against the national average starting salary for college grads. Again, it’s an average. If you make more money, you’ll have a lower burden. It also doesn’t factor in specific information about your school or special repayment programs, like Income Based Repayment or Public Service Loan Forgiveness.
Total debt is calculated as described above. Since institution-specific salary data is not available, this version of the tool uses the average salary one year after graduation for a student with a bachelor’s degree, as reported by the study. Adjusted for inflation, this figure equates to $30,922 per year on a pre-tax basis (a monthly salary of $2,577).
Debt burden does not take into account that the average starting salary of graduates of particular institutions may vary. This tool will provide an indication of whether debt burden is low, medium, or high as follows:
- Low: monthly payment is < 8% of average monthly salary
- Medium: monthly payment is 8%–14% of average monthly salary
- High: monthly payment is > 14% of average monthly salary
Since this version uses the same salary assumption across institutions, the debt burden indicator is not specific to an institution.
The content on this page provides general consumer information. It is not legal advice or regulatory guidance. The CFPB updates this information periodically. This information may include links or references to third-party resources or content. We do not endorse the third-party or guarantee the accuracy of this third-party information. There may be other resources that also serve your needs.