1. Effective Entrance and Exit Counseling Maria Luna-Torres Director of Education Finance Initiatives TG

2. Objectives Understand the basic requirements of loan counseling Identify resources to enhance your understanding of loan counseling requirements Become aware of ways to enhance counseling

3. Purpose of counseling Fulfills requirement mandated by federal law and regulations Educates Stafford or Grad PLUS loan borrower regarding his or her rights and responsibilities

4. Delivery methods Counseling may be provided: In person By interactive electronic means By electronic or written means, with the borrower's acknowledgement of receipt (entrance only)

5. Who can perform in-person counseling sessions? Entrance and exit counseling: –School –Lender/servicer –Guarantor Must meet conditions: –School must be in control of the session –Presenters prohibited from promoting products or services

6. Documentation The school must maintain documentation substantiating its compliance with entrance and exit counseling requirements for each borrower.

7. Entrance Counseling for Stafford Loan Borrowers

8. School responsibilities School must ensure that: First-time borrowers complete counseling prior to first disbursement of Stafford loan, and An individual with expertise in Title IV programs is available shortly after counseling to answer student questions.

9. Required basics Use of Stafford MPN Seriousness and importance of loan debt Likely consequences of default — including delinquent debt collection procedures Obligation to repay loan even if borrower doesn’t complete the program within the regular time for program completion, or doesn’t like his or her education

10. Required basics Sample monthly repayment amounts based on several levels of indebtedness of: –Borrowers with subsidized and unsubsidized Stafford; and –As appropriate, graduate borrowers with subsidized or unsubsidized Stafford or Grad PLUS; or Average cumulative indebtedness of other borrowers in the same program at the same school

11. Required basics Effect of accepting the loan on eligibility for other forms of aid Accrual and capitalization of interest on subsidized and unsubsidized loans Option to repay the interest while in school on unsubsidized Stafford and Grad PLUS loans Definition of half-time enrollment during regular terms and summer school if applicable

12. Required basics Consequences of dropping below half-time enrollment Importance of contacting the appropriate offices if the borrower withdraws Information on how to access NSLDS Name and contact information for questions regarding borrower’s rights and responsibilities

13. Beyond the basics Explanation about other sources of financial aid Description of terms and conditions Recommendation to keep all documentation Reminder to keep loan holder informed

14. Beyond the basics Summary of student’s rights and responsibilities Overview of options –Repayment –Discharge and forgiveness Explanation of loan cycle Disclosure of Satisfactory Academic Progress policy and refund policy Information on budgeting and financial literacy

15. Entrance Counseling for Grad PLUS Loan Borrowers

16. School responsibilities School must ensure that: All first-time Grad PLUS borrowers complete counseling prior to first disbursement of Grad PLUS loan A borrower’s Stafford loan eligibility has been determined An individual with expertise in Title IV programs is available shortly after counseling to answer questions

17. Required information Some required items depend on whether the borrower has received a prior Stafford loan.

18. Required information All Grad PLUS borrowers must be provided sample repayment amounts based on several levels of indebtedness of: –Borrowers with subsidized and unsubsidized Stafford loans; and –As appropriate, graduate borrowers with subsidized or unsubsidized Stafford or Grad PLUS loans at the school or in a specific program of study; or –Average cumulative indebtedness of other borrowers in the same program at the same school.

19. No prior Stafford Same as for Stafford entrance counseling: Use of Grad PLUS MPN Seriousness and importance of loan debt Likely consequences of default Obligation to repay loan even if borrower doesn’t complete or doesn’t like his or her education

20. Required basics – Same as first-time Stafford borrowers Effect of accepting the loan on eligibility for other forms of aid Accrual and capitalization of interest on subsidized and unsubsidized loans Option to repay the interest while in school on unsubsidized Stafford and Grad PLUS loans Definition of half-time enrollment during regular terms and summer school if applicable

21. Required basics – Same as first-time Stafford borrowers Consequences of dropping below half-time enrollment Importance of contacting the appropriate offices if the borrower withdraws Information on how to access NSLDS Name and contact information for questions regarding borrower’s rights and responsibilities

22. Prior Stafford School must notify borrower of maximum Stafford loan amount and provide comparison of terms between Stafford and Grad PLUS regarding: –Interest rates –When interest accrues –When the loans enter repayment This information may be provided through the financial aid award letter process, if done before certification

23. Comprehensive counseling Regulations only specify minimum entrance counseling requirements for the two categories of Grad PLUS borrowers. Regulations do not: –Require schools to develop separate entrance counseling materials, or –Prohibit schools from exceeding the minimum counseling requirements If a school prefers to require all Grad PLUS borrowers to complete comprehensive counseling, it may do so.

24. Exit Counseling

25. School responsibilities School must ensure that: Counseling is conducted shortly before Stafford and Grad PLUS loan borrower ceases half-time enrollment, or An individual with expertise in Title IV programs is available shortly after counseling to answer questions.

26. Student withdrawals without notice Counseling must be provided: Electronically, or By mailing written materials to borrower within 30 days after learning borrower withdrew or failed to complete counseling.

27. Required basics Same topics outlined in entrance counseling Information on each available repayment plan – Description of features – Samples of average monthly payments – Differences in interest paid and total payments

28. Required basics Debt management strategies Terms and conditions for loan forgiveness and loan discharge Terms and conditions for deferments and forbearance Option to prepay loans, pay on a shorter schedule, and change repayment plans Consequences of defaulting on a loan, including delinquent debt collection procedures

29. Required basics Effects of consolidating Title IV loans –Total interest paid –Fees to be paid –Length of repayment –Grace period –Loan forgiveness, discharge, and deferment options –Change repayment plans or prepay loan –Variation in borrower benefits among different lenders

30. Required basics Availability of ED’s student loan ombudsman office Availability of NSLDS and how it can be used to obtain loan status information General description of the types of tax benefits that may be available to borrowers

31. Stafford borrower with Grad PLUS If a Stafford borrower also has Grad PLUS loans, the anticipated monthly repayment amount — if based on average indebtedness — must include both Stafford and Grad PLUS indebtedness.

32. Information collecting and reporting School must ensure borrower provides the following: –Current name, address, SSN, references, DL# –Next of kin –Expected employer (if known) –Expected permanent address (if known) Must be provided to guarantor within 60 days

33. Frequently asked questions Is the entrance and exit counseling information on Mapping Your Future compliant with current regulatory requirements? YES If a student completed Entrance Counseling for a FFELP Stafford loan, and later received a Direct Stafford Loan, is the student required to take another entrance counseling session? NO

34. Frequently asked questions If a student has FFELP and Direct loans, what are the exit counseling requirements? –A borrower may either attend a combined FFELP and Direct loan counseling session or attend two separate sessions – one for FFELP loans and one for Direct loans. –If he or she attends a combined session, make sure that all FFELP and Direct loan requirements are covered.

35. Loan counseling resources Presentation templates Sample tests Training module Sample monthly repayment amounts Comparison of sample repayment plans Summary of loan forgiveness and discharge Available by visiting TG Online at www.tgslc.org/council/training/Mod4/resources.cfm www.tgslc.org/council/training/Mod4/resources.cfm

36. Questions? This presentation is available for download at www.tgslc.org/tgconference.