WASHINGTON (Reuters) - With many students eagerly waiting to find out which college they will be attending in the fall, the U.S. consumer watchdog is offering a sober reminder: loans for tuition are expensive.
The Consumer Financial Protection Bureau (CFPB) unveiled on Wednesday an online tool to compare tuition costs at various colleges and determine how much monthly payments would be on student loans. The calculator assumes four-year and two-year degree programs and a 10-year repayment period that would begin after graduation.
“Student loan debt has crossed the $1 trillion mark and tuition continues to climb,” CFPB Director Richard Cordray said in a statement. “Our Financial Aid Comparison Shopper helps students make apples to apples comparisons of their offers and pick the one that works best for their financial future.”
The database contains tuition details of more than 7,500 institutions, allowing people to calculate by school how much they would have to borrow to cover annual tuition.
A “debt burden” section compares monthly loan payments to the average salary for someone with a bachelors degree.
The CFPB was created by the 2010 Dodd-Frank financial oversight law to police markets for financial products such as mortgages and credit cards.
The agency has waded into the debate over the high debt students take on to pay for a college education. It oversees private student lenders, including JPMorgan Chase & Co and Wells Fargo & Co.
Student loans have surpassed credit cards as the largest source of household debt after mortgages, according to the CFPB.
In October the agency released a sample form that colleges could use to make tuition costs easier to understand.
Reporting By Dave Clarke