With Federal student loans there is a counseling requirement that needs to be met by each borrower. We already talked a bit about student loan entrance counseling in our previous article. Similarly student loan exit counseling is a part, and meets part of the requirements for, this counseling component of any federal loan. The counseling component can be completed off line or online as specified and required by your educational institution. Each school handles the exit counseling component differently and it is the student/borrowers responsibility to meet this requirement as specified by their school.
Who Needs It
Exit counseling is a requirement for all student loan borrowers and is something that must be completed prior to the student withdrawing from, graduating from, or dropping below what is considered “half full time” attendance. If the student is transferring to a different school they must complete exit counseling if any of the above apply.
What Loans Require It
Exit counseling is required for all borrowers that utilize the William Ford loans or the Federal Family Education Loans. The William Ford loans are also known as direct loans, direct subsidized and unsubsidized loans, and as the direct PLUS loans which are normally for professional or graduate students. The Federal Family Education Loans are also known as subsidized and unsubsidized federal Stafford loans and as federal PLUS loans which also are normally for graduate and professional students.
What To Expect
The counseling itself is broken into five separate sections. The getting started section covers the types of federal student loans and the specific lexicon and terminology that is used when discussing student loans. The counseling then moves into a discussion of the repayment of the loan. In this section you learn and review the interest rate, the payment schedule, how to make payments, the incentive behind making payments, and the various plans that are available for repayment. The third section covers what happens if you have difficulty in making your monthly student loan payments. In this section the counseling covers the issues of payment deferment, payment forbearance, loan default and loan consolidation. The fourth section covers the possibility of loan discharge as well as loan forgiveness and the various ways in which a student may accomplish this. The final section covers resources where the student can go for more information as well as going into details about the students rights and responsibilities with regard to the money that has been borrowed.
The counseling is filled with quizzes and questions in order to ensure that the student is comprehending the information given. The student loan program is a critical element in ensuring that higher education is made available to those that have attained high levels of achievement regardless of their financial status. But with the public assistance in helping those that have made these achievements comes a burden of responsibility to pay back this assistance. The Student loan exit counseling is designed to help the student understand their commitments as well as what is expected of them. It also helps the student understand what they can do should they fall short on being able to meet these commitments.
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