Entrance Counseling for Student Borrowers

34 CFR 685.304(a)34 CFR 682.604(f)

Note:  The final regulations include the entrance counseling requirements separately for each loan program.

See the program regulations for complete information.

Prior to the first disbursement, each school must provide to a first-time borrower of a FFELP or Federal

Direct Loan (other than consolidated or Parent PLUS loans) comprehensive information on the terms and conditions of the loan and of the borrower's responsibilities.  The information is to include:

  • The effect of the loan on the eligibility of the borrower for other forms of aid

An explanation of the use of the Master Promissory Note

  • The seriousness and importance of the students' repayment obligation
  • Information on the accrual and capitalization of interest
  • Borrowers of unsubsidized loans have the option of paying interest while in school
  • Definition of half-time enrollment and the consequences of not maintaining half-time enrollment
  • Importance of contacting appropriate offices if student withdraws prior to completion of program of study
  • Sample monthly repayment amounts
  • The obligation of the borrower to repay the full amount of the loan regardless of whether the borrower complete program or completes within regular time for completion, is unable to obtain employment upon completion, or is otherwise dissatisfied with or does not receive the educational or other services the borrower purchased from the school
  • Consequences of default
  • Information about the NSLDS and how the borrower can access the borrowers records

Name and contact information for individual the borrower may contact with questions about the borrower's rights and responsibilities or the terms and conditions of the loan

Note:  The final regulations include the entrance counseling requirements separately for each loan program.  See the program regulations for complete information.

Each school must provide counseling to borrowers of loans under the FFEL, Federal Direct Loan, or Perkins Loan programs (other than consolidated or Parent PLUS loans) shortly before the student borrower ceases at least half-time study at the school.  The counseling will provide information on:

  • Average anticipated monthly repayment amount
  • Repayment plan options
  • Options to prepay or pay on shorter schedule
  • Debt Management Strategies
  • Use of Master Promissory Note
  • The seriousness and importance of student's repayment obligation
  • Terms and conditions for forgiveness or cancellation
  • Copy of information provided by the U.S. Department of Education
  • Terms and conditions for deferment or forbearance
  • Consequences of default
  • Options and consequences of loan consolidation
  • Tax benefits available to borrowers
  • The obligation of the borrower to repay the full amount of the loan regardless of whether the borrower completes program or completes within regular time for completion, is unable to obtain unemployment upon completion, or is otherwise dissatisfied with or did not receive the educational or other services the borrower purchased from the school
  • Availability of the Student Loan Ombudsman's office

Information about NSLDS.  The U.S. Department of Education is required to provide a disclosure form for students and prospective students about NSLDS

HOW DISCLOSED

https://studentloans.gov/myDirectLoan/index.action