What Is Entrance Counseling For Federal Student Loans?

Are you planning on taking out federal student loans for the first time? You’re going to have to complete student loan entrance counseling in order to receive that money. In this article, we outline what the student loan entrance counseling module covers, what you need to complete it, and more.

What Is Student Loan Entrance Counseling?

Student loan entrance counseling is a 20-to-30-minute module offered by the United States Department of Education (DE). It’s designed to help borrowers understand their responsibilities when they take out federal student loans, avoid default, and improve financial literacy.

Dollar bills laying on top of each other.The module covers a variety of topics related to financial aid and student loans, including basic terms, budgeting, loan cancellation and deferment, paying down debt, types of loans available, savings accounts, tax credits, credit scores, repayment plans, default consequences, and debt growth, among others.

In general, this information can help you make smart decisions with your loans, money, and finances in the future. You’ll better understand your options and how you can potentially lower your student loan debt during the next few years.

For more information supplied in the module, the Federal Student Aid website published a PDF titled “Direct Loan Entrance Counseling Guide For Borrowers of Direct Loans.” It covers must-know terminology, frequently asked questions, and more.

Is Student Loan Entrance Counseling Required?

Undergraduate college students are required to complete the student loan entrance counseling module if they’re taking out a Direct Subsidized Loan or a Direct Unsubsidized Loan for the first time. You won’t have to complete it in subsequent years.

Graduate and professional students also need to complete the module if they haven’t previously received a Direct PLUS Loan or a Direct Unsubsidized Loan.

Colleges and universities may have other requirements as well. Check with your financial aid office to learn more.

What is Financial Awareness Counseling?

Financial Awareness Counseling module and Financial Awareness Counseling Tool (FACT) were previous resources that covered financial management basics and provided details on the student’s loan debt and how much they can expect to pay in total. Although very similar to entrance counseling, Financial Awareness Counseling didn’t meet colleges’ requirements and caused confusion among students.

FACT was removed from the FSA website in 2021 and replaced with the Annual Student Loan Acknowledgement (ASLA). It provides students and their parents with details about loans, how they affect future finances, how much the individual owes, interest rates, repayment options, and how much you’re still eligible to borrow. As with Financial Awareness Counseling, colleges don’t accept ASLA in place of entrance counseling.

What Do You Need to Complete the Module?

To complete the federal student loan entrance counseling module, log into your account on the FSA website using your FSA ID.

You’ll also need:

  • The name of your college, university, or institution
  • The total tuition, fees, and related charges you’ll be paying to attend
  • Income information
  • Financial aid details
  • Details on any living expenses
  • Your Financial Aid Offer letter

You have to complete student loan entrance counseling in one uninterrupted session. You can’t save your work and come back later. Be sure to set aside at least 30 minutes to dedicate to the module.

What is Exit Counseling?

If you took out federal student loans, you’ll also need to complete exit counseling through the FSA website once you leave school. Depending on your college, you might be asked to complete it online or on paper with the Direct Loan Exit Counseling Guide (PDF). As with entrance counseling, this module takes about 20 to 30 minutes to finish.

Exit counseling reviews must-know terms, interest rates, and repayment options, including income-driven repayment plans with budget examples. It explains what happens if you default on your federal student loans and how you can avoid it, how consolidation can help you manage your debt, and loan forgiveness programs. The module also covers credit reports, credit cards, tax incentives, and more.

Exit counseling needs to be completed whenever the student leaves the school, graduates, or drops below half-time enrollment. Plan to finish the module within six months of graduation, when your grace period for loan repayment ends. Delaying could result in a withheld diploma or transcript.

Why Entrance and Exit Counseling Matters

If you’re taking out federal student loans to help afford college, it’s important to complete your student loan entrance counseling as soon as possible. The federal government won’t release your funds, and your school may restrict your ability to register for housing or classes until you complete it.

Managing and repaying your student loans can get overwhelming. If you’re not careful, you may find yourself facing default. Entrance counseling takes just 30 minutes to finish and the lessons in the module can truly pay off for your finances, today and tomorrow.

Federal student loans can help you afford college, but scholarships don’t need to be paid back. Have you applied to enough yet? Our Scholarship Search Tool helps you locate awards you qualify for and makes it easy to send in your applications. Get started for free right here!


*While a scholarship does not have to be repaid, there may be other obligations associated with the scholarship.

 
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