If you are considering going to college, you may already know that where you go to school and what you will study will determine how much you may need to borrow and your ability to pay off student loan debt. It can feel overwhelming if you don’t know how to easily compare your options. The US Department of Education’s college scorecard can help, and recent changes to the tool make it easier to compare average earnings and student loan debt scores.
The College Scorecard is designed to help students decide which school they will attend and what they will study at. Users can search and compare data from different schools and fields of study, including average college costs, admission information, graduation rates, and more.
Prospective students may consider using the tool to narrow down their research or choose between different schools or fields of study. Users should keep in mind that the data displayed in the College Scorecard are averages, which means that the tool does not provide an accurate picture of what you might actually be borrowing, repaying or earning. However, it can help you understand how selected schools perform according to different measures and identify outliers, or evaluate the return on investment for the chosen study programme.
New data was recently added to the tool that can help users think about student debt outcomes. Because student debt levels remain a national concern, it is critical for prospective students to consider the total amount of debt they will incur to obtain a college degree, as well as their ability to pay off that debt after graduation or dropping out.
Here’s a look at what’s been added to the College Scorecard and how you can use this information.
Borrower results in student loan repayment
Earning a college degree is usually a smart investment that increases earnings over time, even when students need to borrow to pay for education. However, some borrowers are better at repaying than others, and this metric can indicate how well an institution prepares its students for success after graduation.
In an earlier update, the College Scorecard added new data showing the average federal loan debt leaving loan graduates by program of study. A more recent update announced last month provides more detailed information about how individual school borrowers are progressing toward paying off their federal student loans.
Shows the percentages of borrowers who fall into eight loan repayment states two years after repayment is entered: fully paid, making progress, delinquent, forbearing, deferred, defaulting, no progress, and loan discharge.
Note that borrowers in the “no progress” category make regular payments, but the total outstanding loan balances exceed the sum of the original loan balances – which means the amount owed is increasing rather than decreasing due to unpaid interest. This is called negative depreciation and the borrower ends up incurring more costs over time.
Data on student loan delinquency, defaults, and tolerance should also be reviewed. If a college had a large number of borrowers in these categories, it could be cause for further research into why so many students who attended that school struggle to pay off their loans.
Another useful update to the college’s scorecard last month is the addition of data on the percentage of student loans paid by groups of federal student loan borrowers one year, four years, five years, 10 years, and 20 years after repayment was entered. This information can indicate how well or poorly students at a particular school have paid off their student loans over time.
Parental Loan Information PLUS
Along with more student borrowing information, the College Scorecard also made an update in December 2020 that allows users to see how much parents borrow in federal Parent PLUS loans to help their kids pay for college. This data helps provide a more comprehensive understanding of borrowing in a particular institution.
At the end of 2019, about 3.6 million parents took out Parent PLUS loans to help their kids pay for college, according to a study by Trellis Research — but this data was not previously reported in the scorecard. Parent PLUS loans are intended to help families pay any remaining tuition fees owed after a student has applied all of their other federal student loans, grant aids, scholarships and other available resources.
Scorecard users can now see the parent’s borrowing rate, average total debt after graduation, and the typical monthly Parent PLUS loan payment at each college. This information can provide a better understanding of average outcomes for parents who borrow to help their children attend a particular school or schools and assess whether most students rely on Parent PLUS loans to bridge the education gap. It can also help parents understand what their monthly payments might look like if they choose to borrow through Parent PLUS.
While these updates provide a more complete picture of college loan debt, the tool still doesn’t include data about private student loans, so it’s important to know that some borrowings may not count.
Average earnings by study program
This December specific update allows students to compare average income two years after graduation based on field of study. Prospective students can compare across study programs at one college or compare results in the same field at multiple schools. Over time, more long-term data will be included as future earnings data becomes available.
This information is particularly useful for individuals looking to assess the return on their investment for college – one factor to consider when choosing a program of study. It’s also important when considering how much to borrow, since your ability to pay off your student loans will largely depend on your job salary or your salary after you leave school.
The College Scorecard can be a useful tool, but it’s important to keep in mind that everything you offer is average. Realistic results can be above or below average, so the tool should be just one of many considerations when choosing a program or college, including finding the best fit based on your personal preferences.