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Before you can get a federal student loan, you’re required to complete student loan entrance counseling. This online counseling goes over the ins and outs of student loans, including how repayment works and how to avoid default. Plus, you’ll learn how to budget, build credit, and other personal finance lessons. But you may wonder just what’s involved and how long it will take.Here, take a closer look at the student loan entrance counseling process, including:
When is student loan counseling required?
What’s involved?
How long does student loan counseling take?
What are the benefits of student loan counseling?
What Is Student Loan Entrance Counseling?
If you’re wondering what is entrance counseling, know this: Student loan entrance counseling is an online workshop that teaches you about student loans as well as shares other money management lessons. The government requires you to complete entrance counseling before it pays out your federal student loans. You can complete entrance counseling online at StudentAid.gov — the same site where you submitted the FAFSA for grants and other financial aid — though some colleges might require their own entrance counseling as well. Once you’ve finished it, your school’s financial aid office will be notified, and your loans will be cleared for release. While you might not be excited to add one more item to your to-do list, this entrance counseling is quite informative. You’ll learn all about how your student loans work — and how to prepare for repayment — so you’re not left scrambling after college.
What Happens During Entrance Counseling?
During student loan entrance counseling, you’ll log into your Federal Student Aid account and go through a number of online lessons. Each module will go over an important personal finance concept, such as,
How federal student loans work
Your options for repayment plans (and which one is right for you)
At the end of it, you’ll answer a few “knowledge check” questions to review what you’ve learned. You’ll also select which schools you want notified that you’ve completed the counseling.
Entrance Counseling Process
You can complete your entrance counseling on StudentAid.gov after logging in with your Federal Student Aid (FSA) ID and password. You’ll also want the following information on hand:
The name of the school where you’ll enroll
Income and financial aid information
Estimated living expenses
The entire process takes about 30 minutes, and you’ll need to complete it all in one sitting. You can’t complete part of it and return to it later, so make sure you have half an hour set aside to finish the entire process.
How Long Does It Take for Entrance Counseling to Process?
The amount of time it takes for your school to process your entrance counseling will vary by institution. Some schools can process it within 24 to 48 hours, whereas others take up to seven business days.
Completing Entrance Counseling
Between your part of entrance counseling and your school’s, the steps could take just a day or more than a week. If you’re concerned about timing, check with your financial aid office about its typical process. Try to complete entrance counseling at least a few weeks before your tuition bill is due to make sure there’s no delay with your student loan disbursement.
Requirements for Entrance Counseling
As briefly noted above, you will need some information at hand to complete your student loan entrance counseling. These include:
Your federal student aid ID
Your email address
Your date of birth
Your Social Security number
Your income
The name of your school
Financial aid information
Your current and anticipated living expenses.
Have these details at hand before you sit down to do your counseling.
Is Entrance Counseling Completed Every Year?
You’re required to complete entrance counseling if you’re borrowing federal student loans for the first time. Undergraduates who are taking out their first Direct subsidized or unsubsidized loans, for instance, must go through entrance counseling. If you complete it before freshman year, however, you won’t have to do it again in your subsequent undergraduate years. Graduate students who are borrowing grad PLUS loans for the first time will also have to go through entrance counseling. This holds true even if you’ve already done entrance counseling for loans you borrowed for your undergraduate education. Parents who borrow a parent PLUS loan on behalf of their child generally do not need to complete entrance counseling. If they have adverse credit, however, they will usually need to complete PLUS loan credit counseling (and meet other requirements) before they can borrow funds.
Benefits of Student Loan Counseling
Student loan entrance counseling educates you about your repayment obligations so you’re not caught unaware when your first loan bill is due and then subsequent ones. Here are some of the benefits you’ll gain from complete entrance counseling.
Understand Your Loan Terms
During entrance counseling, you’ll learn about how your student loans work, from repayment expectations to interest accrual. Plus, you’ll get the chance to enter your own loan information and see how the debt can grow due to interest charges. When you borrow, you don’t have to pay off student loans while you’re in school and for six months after you graduate. But postponing payments all this time can cause your balance to grow due to interest charges.By understanding how much student loan debt you owe and the impact of interest on your balance, you might choose to make in-school payments (perhaps just the interest) to prevent your debt from ballooning during the years you’re in school.
Explore Federal Repayment Plans
You’ll also learn about your various options for repayment plans, which include standard repayment, graduated repayment, and income-driven repayment. You’ll see how extending your loan terms can impact your monthly payment and long-term interest costs. Knowing your options can help you select the best repayment plan for you after graduation.
Learn How to Avoid Default
Entrance counseling also goes over student loan delinquency and default, including the consequences of both and how to avoid falling behind on payments. You’ll learn about how missing payments can damage your credit score, which can create financial roadblocks for years to come.
Estimate Your Cost of Attendance
As you go through entrance counseling, you’ll also spend a few minutes estimating your cost of attendance at school, including tuition, supplies, and living expenses. This step will help give you a clearer sense of your costs in the years to come so you can figure out how to prepare for them.
Find Out About Credit and Budgeting
Student loan entrance counseling doesn’t only educate you about your student loans. You’ll also learn about credit and budgeting, two important lessons that you can take with you to college. Entrance counseling typically goes over how credit scores work, as well as how to plan a budget, open a savings account, and build an emergency fund. Recommended: What Is a Master Promissory Note in Student Loans?
The Takeaway
Although student loan entrance counseling might feel like one more box to check on your road to college, it can be a helpful and informative series of lessons. You’ll learn how student loans work, your options for repayment plans, and the consequences of default. Plus, you’ll get an education on important personal finance concepts, including building credit and following a budget. After you finish entrance counseling, you can put these ideas into practice and manage your money strategically in college and beyond.
3 Student Loan Tips
Refinancing your student loan can lower your monthly payments and help you adjust your loan term. Compare student loan refinancing rates to find a loan that works for you.
Paying extra each month on your student loan can reduce the interest you pay and so lower your total loan cost over time. (The law prohibits prepayment penalties on federal or private student loans.)
If you teach full-time for five complete and consecutive academic years in a low-income school, you may be eligible for federal student loan forgiveness.
Frequently Asked Questions
Is entrance counseling optional?
Do I have to do loan entrance counseling every year?
When does entrance counseling need to be completed?
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About the Author
Rebecca Safier
Rebecca Safier has nearly a decade of experience writing about personal finance. Formerly a senior writer with LendingTree and Student Loan Hero, she specializes in student loans, financial aid, and personal loans. She is certified as a student loan counselor with the National Association of Certified Credit Counselors (NACCC).
