Required Counseling for Federal Student Aid

Receiving federal aid may require students to participate in FAFSA exit counseling or entrance counseling. The overall goal of FAFSA loan counseling is to help students understand their responsibilities when repayment of federal student loans is necessary.

Many students do not have experience borrowing money in such a large amount, so it is important to understand how to properly handle the loan and the requirements that come along with it.

Students should be aware of whether or not they are required to complete an exit or entrance counseling program for FAFSA. Additionally, a student should also understand what these counseling sessions consist of. For example, a school may have alternate entrance or exit counseling programs that differ from federal requirements. To find out more about FAFSA counseling requirements, continue reading below.

What is FAFSA entrance counseling?

FAFSA entrance counseling is a requirement by the federal government for students who have not previously received either a Direct Loan or Federal Family Education Loan (FFEL). The purpose of entrance counseling for FASFA is to ensure that a student is aware of the large financial obligation that he or she is assuming. Undergraduate students will need to complete a federal loan counseling program in order to borrow funds to put toward college tuition. Counseling requirements will be fulfilled for both Direct Subsidized Loans and Direct Unsubsidized Loans if completed. Students completing entrance counseling as a   will fulfill requirements for both Direct Subsidized Loans and Direct Unsubsidized Loans as well as Direct PLUS loans.

Before a student begins loan counseling through the federal website, he or she should first check with his or her school in order to verify that the website meets the requirements. Schools may have different entrance counseling requirements, which need to be met that the federal website does not provide.

Related Article: Grad PLUS Loans

FAFSA entrance counseling can be completed online and will generally take between 20 to 30 minutes. Information that will be required for the counseling session will include:

  • A verified FSA ID
  • The school name
  • Income details
  • Financial aid information
  • Living expense information

What is FAFSA exit counseling?

FAFSA exit counseling is also a requirement in order for students who are graduating, leaving school or reducing their school schedule by less than half-time enrollment. Exit counseling for FAFSA is important for students to complete as it prepares them for repaying student loans that have been taken out during their time at school. The counseling session will provide important information about preparing to repay student loans, including how to avoid defaulting on a loan and how to make finances a priority.

Any student who received a subsidized, unsubsidized or PLUS loan under the must complete exit counseling. Students who are reducing their workload but who are continuing school should understand what half-time enrollment means at his or her school. Oftentimes, staying in school for at least more than half-time enrollment can prevent a student from needing to repay his or her tuition loans at least until graduation.

Specific information will be required during exit counseling that differs from FAFSA entrance counseling. Students will need:

  • His or her verified FSA ID.
  • Detail regarding financial aid.
  • Living expense information.
  • Income details.
  • Next of kin.
  • Two references who live in the U.S.
  • Future employer (if known).

Other Types of Federal Student Loan Counseling

The FASFA exit counseling and entrance counseling are both requirements that must be completed when a student borrows money for tuition or when he or she begins the process of repayment. However, there are other types of FASFA loan counseling that are available to students despite not being a requirement. Financial Awareness Counseling, for example, is a great tool to help students understand what financial aid is and how to manage finances involving the aid. Any student who is planning to or currently paying for higher education should complete this financial awareness counseling course at any time. The entire counseling course can be completed on the Federal Student Aid website within 20 to 30 minutes.

Another federal student loan counseling option that is not required for all students borrowing aid is the PLUS Credit Counseling. A Parent Loan for Undergraduate Students, or PLUS loan, is offered to students to cover the cost of tuition at participating and eligible post-secondary institutions. The PLUS Credit Counseling course assists both students and parents in understanding obligations that come with accepting or borrowing a PLUS loan. The course is intended to help students become more aware regarding the student loan debt that they are agreeing to take on.

There are some instances when the United States Department of Education will determine that a PLUS Credit Counseling course is required. Those instances include when a student has an adverse credit history and has obtained an endorser for the loan or has documented extenuating circumstances that the U.S. Department of Education deems acceptable. PLUS student loan counseling can be completed at any time voluntarily, or within 30 days for those who are required to take it.

How do I complete FASFA student loan counseling?

Completing direct loan entrance counseling or exit counseling programs can be completed in a few different ways, depending on the requirements established by the institution in which a student attends. For instance, a school may have its own way of administering entrance or exit counseling for FAFSA. However, the school may determine that the Federal Student Aid website is an acceptable way to complete the requirements.

Additionally, a student may be required to complete student loan counseling in person if the university requires. A student will be advised upon disbursement of the student loan of how to complete the entrance counseling, as well as before graduating how to complete exit counseling. If a student borrows money through federal aid and does not receive instructions on how to complete the counseling requirements, then he or she should contact the financial aid office of his or her school.

Related Article: FAFSA Application Process

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