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Use a data-driven approach to college admissions and escape the student loan debt trap

Date: 01-11-2022

Over the years, the price of college education has gone up multi-fold. At the same time wage growth has not kept pace and a significant number of borrowers are struggling to keep up with their student loan payments. The student loan debt issue has transformed into a significant crisis. How did we end up in this situation? And what’s the way forward?

High school is a great time for students to start thinking about their careers. Many students talk to their teachers, friends, and family members to explore career options. Students learn more about their interests, skillsets and start forming initial ideas about their career choices. Some students even gain experience by pursuing an internship.

The next step in the journey is identifying a higher educational program and college that will take students one step closer towards their career choice. Choosing to pursue higher education is great. College is important for multiple reasons, including personal development, socializing and networking, career stability, personal growth and making an impact to the society.

 It is imperative to understand that going to college is one of the most important decisions in an individual’s life. However, getting this decision wrong can have serious consequences, both financially as well as personally. Many students who get the decision wrong and are burdened with student loans, have very little or no savings even years after graduation. Student loan debt has delayed the ability of many to buy a house or get a car loan. In many cases it has impacted the health of the individual – stress related issues and depression.

Hence, in addition to interests and skills, students should also think about financial aspects when it comes to selecting colleges and applying for colleges. What is the long-term earnings potential after graduating from this college? What is the total cost of attending this college? It will be very beneficial if students factor in some of these basic financial questions in their decision-making process.

However, these financial data points and related analytics are not readily available. When a bank makes a loan to a customer, the loan officer has a readily available metric – Credit Score of the individual. When an investor invests in a company, the investor has a readily available metric – Credit Rating of the company. Similarly, wouldn’t it be great if students and their parents have a metric to determine whether their college application decision makes financial sense?

When students are equipped with such financial data and analytics, the probability of making a wrong choice should go down drastically.  This data and analytics will act as an effective risk management tool and can prevent students and their families from financial disaster.

Kashopt provides data and analytics that should help students select the right educational program and maximize their return on investment. Kashopt’s mission is to empower students and parents to make decisions with confidence.