What Is Exit Counseling for Student Loans?
Complete your student loan exit counseling. Understand your post-graduation financial obligations and navigate repayment with clarity.
Student loan exit counseling is a required process for many borrowers as they transition from student life to loan repayment. This counseling provides essential information about managing federal student loans and understanding their responsibilities. Its primary purpose is to ensure borrowers are well-informed about their financial obligations and available options before repayment begins. This step helps individuals navigate their post-college financial landscape and avoid potential difficulties with student loan debt.
Understanding Exit Counseling Requirements
Exit counseling defines the responsibilities of both the loan servicer and the borrower, aiming to prepare individuals for loan repayment. Federal student loan borrowers are generally required to complete this counseling when they graduate, withdraw from school, or drop below half-time enrollment. This requirement applies to those who have received subsidized, unsubsidized, or PLUS loans under the Federal Direct Loan Program or the Federal Family Education Loan Program. It serves to educate borrowers on their rights and obligations concerning their federal student loans.
Information to Gather Before Counseling
Before beginning an exit counseling session, borrowers should collect several pieces of information:
Personal identification details, such as a Social Security Number and possibly a driver’s license.
Current and future contact information, including addresses, phone numbers, and email.
Financial information, such as estimated income, employment status, and monthly living expenses, to help assess repayment capabilities.
Details about student loans, including loan servicer names, contact information, total loan amounts, and the specific types of loans received.
Contact information for at least two references, including names, addresses, and phone numbers of family members or close acquaintances.
Completing Your Exit Counseling Session
Completing exit counseling typically involves an online session, primarily through the Federal Student Aid website for federal loans. Borrowers log in using their FSA ID username and password. The session guides users through various modules, presenting information about their loan history and repayment options.
Borrowers will be prompted to input their current contact information, future address, and employment details, if known. The counseling may also include interactive quizzes or questions to confirm understanding. After navigating all sections and providing the required information, borrowers must complete the final submission process. The session typically takes about 20 to 30 minutes and must be completed in one sitting.
Repayment Information and Post-Counseling Actions
During the exit counseling session, borrowers receive important information about repayment, including various plan options such as the Standard Repayment Plan and Income-Driven Repayment (IDR) plans. The counseling also explains interest accrual, grace periods before repayment begins, and the potential consequences of loan default. Additionally, borrowers are informed about their rights and responsibilities, as well as options like deferment, forbearance, and loan consolidation.
After completing the counseling, borrowers typically receive a confirmation of completion, and the grace period for their loans will begin. This period, often six months, is a temporary pause before the first loan payment becomes due. Borrowers are advised to contact their loan servicer directly for specific questions regarding their repayment schedule or to discuss financial changes that might affect their ability to make payments.