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Entrance counseling sessions are required prior to each student receiving his/her first loan (not the first loan at your institution) either in person (individually or in a group), by audiovisual presentation or by interactive electronic means. Schools must also have an individual with expertise in the Title IV aid programs available after the counseling to answer the borrower's questions regarding those programs. The school must maintain documentation of compliance with entrance counseling for each borrower.
There is a prescribed list of items that must be covered in the entrance counseling session. This checklist will help ensure that the requirements for entrance loan counseling are being met. Schools must:
- Reinforce importance of repayment;
- Describe consequences of default;
- Remind students of the obligation to repay the student loans, even if he/she does not complete school, cannot find a job or is dissatisfied with the education received;
- Stress that repayment is required regardless of educational outcome and subsequent employability;
- Provide sample monthly repayment amounts for different amounts of debt, or for average debt;
- Federal Stafford borrowers at school or in the same program; and
- Review the availability of state grant aid.
Other suggestions for entrance counseling include:
- Review terms and conditions of the loan;
- Review repayment options;
- Discuss how to manage expenses (budgeting) while in school;
- Reinforce importance of communicating change of status, etc., with the lender/servicer;
- Review deferment, forbearance, cancellation options and procedures;
- Review Borrower’s Rights and Responsibilities;
- Review refund and other policies affecting withdrawals;
- Reinforce importance of keeping loan records; and
- Remind student of exit counseling requirement.
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