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Sunday, March 3, 2019

Student loan counseling

Understanding the Federal Student Loan Program: Entrance and Exit Counseling

It's a well-known fact that each year many Americans receive money from the federal student loan program. Less known, however, is that in order to receive a student loan, recipients must participate in entrance and exit counseling on the StudentLoans.gov Web site. So, what do the counseling sessions involve and how do they help students prepare for the responsibilities of accepting a student loan? Read on to find out.

Entrance counseling helps students better understand the obligations they'll be agreeing to when accepting their loan. Any student who has not previously received a loan through the federal government's Direct Loan Program or the Federal Family Education Loan (FFEL) Program (no longer available) must complete entrance counseling on the StudentLoans.gov Web site prior to receiving their loan. Topics covered during entrance counseling include understanding the loan, managing spending, planning repayment, avoiding loan default, and making finances a priority.

Exit counseling covers the necessary topics for preparing to repay a loan and must be completed each time the recipient drops below half-time enrollment, leaves school, or graduates. The topics covered during exit counseling are nearly identical to the topics explored during entrance counseling and include understanding the loan, planning repayment, avoiding loan default, and making finances a priority.

To complete the required entrance and exit counseling sessions, students must first log into their account on the StudentLoans.gov Web site using their verified Federal Student Aid (FSA) ID, then navigate to the appropriate counseling type (either entrance counseling or exit counseling) offered on the site. It is recommended that students give themselves plenty of time to complete each counseling session, as progress isn't saved if the recipient prematurely leaves the session. Each session typically takes twenty to thirty minutes to complete.

Because many Americans each year receive federally funded student loans, the government has created a program to provide students with the necessary tools to fully understand the obligations they are agreeing to when accepting a loan through the federal government's Direct Loan Program. By completing the required entrance and exit counseling sessions, recipients will leave with a better understanding of their loan and obtain the necessary financial knowledge to proactively manage their spending—both of which leaves them better prepared to begin the repayment process.

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