Five things the president wants to tell college students
President Barack Obama only has about six more months in office, and before he leaves, he has a message for college students and student loan borrowers.
In a聽, the White House describes America鈥檚 skyrocketing college costs聽and student loan debt聽and聽points out helpful tools and updates.
Here鈥檚 what the White House says you should know about affording college.
1. College is still a worthwhile investment 鈥� if you graduate
College is more expensive than ever, but you鈥檙e聽. College graduates 鈥� even those with student debt 鈥� are more likely to be employed and earn much more in their lifetimes than graduates of associate鈥檚 programs. The value of college graduates鈥� additional lifetime earnings far exceeds the typical amount of student debt they聽take on, according to the report. In fact, this graph from the report shows that additional earnings eclipse聽college graduates鈥� typical聽debt load by more than $400,000.
College isn鈥檛 a worthwhile investment for students who take on debt but don鈥檛 graduate. They鈥檙e聽much more likely to default on their debt, the report says.
2. The FAFSA is getting easier to fill out
罢丑别听聽鈥� a form college applicants and students must fill out to be considered for federal student loans, work-study programs, and聽many grants and scholarships 鈥� is notoriously complicated. But it won鈥檛 be as much of a headache starting with the 2017-18 school year.
New rules will allow students to fill out聽the 2017-18 FAFSA in October 2016 using their 2015 tax information. This better aligns the financial aid process with the college application process.
3. Choosing the right聽school can pay off
To get the best bang for your tuition bucks, choose a college that you can afford and that has a track record of helping students be successful after graduation. There are two tools that can help you pick: schools鈥� net price calculators and the Department of Education鈥檚 College Scorecard.
NET PRICE CALCULATORS
A school鈥檚 net price is the amount聽you鈥檒l actually have to pay for聽tuition, room and board, taking financial aid into account. It鈥檚 more telling than a school鈥檚 sticker price, because an expensive school could be less pricey聽if you qualify for enough grants and scholarships.
Most schools have a聽. Use it to estimate your out-of-pocket costs for each school before聽you receive your financial aid award letters.
COLLEGE SCORECARD
罢丑别听聽offers insights about different colleges and universities, including their graduation rates, students鈥� average salaries after attending, students鈥� median debt loads and the percentage of students successfully paying back those debts.
4. Switch repayment plans if you need help managing debt
The typical 10-year repayment period for federal student loans can be tough for people whose careers start out slow. If this sounds familiar,聽there are four聽聽that can help by capping your monthly payment at a percentage of your income and forgiving any remaining debt after 20 or 25 years.
The concept of income-driven plans has been around since 1994. But you now have more options, including Pay as You Earn or聽Revised Pay as You Earn plans. To find the best option聽for you, try the Department of Education鈥檚聽simple聽.
5. You鈥檒l get a tax cut to offset your tuition costs
罢丑别听聽became a聽law in December 2015. It聽allows you 鈥� or your parents, if they pay your tuition 鈥� to聽take up to聽$2,500 off your taxes for each of the first four years you鈥檙e in college.
More plans underway
The Obama Administration has more plans to聽help borrowers saddled with unmanageable student debt. Earlier this month, the Department of Education launched a聽聽for聽federal financial aid. The department is expected to release an initial report about the feedback in October 2016.
The White House is also improving the process by which聽borrowers who have been misled by unscrupulous, often for-profit colleges can get federal loan forgiveness. It鈥檚 expected to finalize the process by November 2016.
Teddy Nykiel is a staff writer at NerdWallet. Email:聽teddy@nerdwallet.com. Twitter:聽.
This story originally appeared on .
