Entrance Counseling for Student Loans

What is Entrance Counseling? 

Students are required to complete entrance counseling to receive federal direct loan money for school. This process helps them understand the types of loans they are taking, their rights, and the responsibilities associated with having a loan. Additionally, students will learn about how interest works and how to avoid delinquency and default. Finally, they will be presented with repayment options to prompt students to consider their future and assess whether their chosen occupation will afford them the ability to make the payments. 

After a student has completed entrance counseling, a record will be sent to the school, and then the student will be able to receive their federal loan money. 

Sign that says "College Just Ahead"

Who Needs to complete Entrance Counseling? 

Students taking these types of loans for the first time include:  

  • Direct Subsidized Loans 
  • Direct Unsubsidized Loans 
  • Direct PLUS Loans for graduate/professional students 

Why is this important for schools and students? 

For many colleges and institutions, the completion of entrance counseling holds significant importance. It acts as a safeguard to ensure that students are prepared to manage their loans, reducing the risk of defaults. The financial stability of students directly impacts the school’s Cohort Default Rate (CDR). Schools with consistently high cohort default rates may face the loss of eligibility to participate in Title IV aid programs, emphasizing the shared responsibility of both students and institutions to uphold financial integrity. 

If a student qualifies for a federal student loan, they may use it to help pay for their tuition or other college expenses; however, they must first complete entrance counseling before they can receive and use the loan. If a student fails to complete the entrance counseling, they will not be able to receive loans, making it potentially more challenging for the student to cover costs for school.  

It is important, as a financial aid professional, to always remind your students that they must complete entrance counseling if they want to secure federal student loans. When students are regularly guided on the steps to receiving aid, they are more likely to take the appropriate actions.   

Where to Complete Entrance Counseling? 

Students can complete entrance counseling at the Federal Student Aid website: 

A student sitting at a desk with a computer completing entrance counseling

What’s Next? 

After a student has completed entrance counseling, secured their loans, and finished school, they must undergo exit counseling. Stay tuned for our upcoming blog on exit counseling to learn more! 

Still have questions? 

Contact our compliance team for further questions!  

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