College Loan Entrance Counseling
Most student that will or are attending college today will more than likely need to
borrow money to help pay for college costs. Borrowing money for school is a
serious, long-term, financial obligation.
The Department of Education MANDATES that ALL FIRST TIME Federal Direct
Student Loan and Federal Grad PLUS borrowers complete an "entrance
counseling" session before receiving their first loan.
The student loan Entrance Counseling will inform the student of their rights and
responsibilities as a borrower.
All student loan borrower must also complete a Master Promissory Note (MPN)
which is a legally binding promise to repay the loan that a student will receive. In
most cases, the student will sign only one promissory note that will be used for all
of their loans at a single school. After this occurs, the college that the student will
be attending will do one of two things. They will give the student a copy of the
MPN or will offer the student the option of completing the MPN online
at www.studentloans.gov.
According to the Federal Student Loan website, when the student signs the
MPN, they are confirming they understand that the college they will be attending
may make new loans for the student for the duration of student’s education (up to
10 years) without having them sign another promissory note.
If the student attends a college that is outside the U.S., they will need to
complete a new MPN each year they receive a Direct Loan. The student is also
agreeing to repay the U.S. Department of Education, all loans made to them.
When a loan is made on the behalf of the student, the college they are attending
must notify the student either in writing or electronically whenever a loan is
disbursed.
Whether the notice is in writing or communicated electronically, it must tell the
student the date the loan was made and the amount of the loan. It also will tell
the student whether the loan is a subsidized or unsubsidized student loan.
If the student does not want the loan or wants a different amount they can cancel
all or a portion of the loan by contacting the college.
According to the Federal Student Loan website, any student loan proceeds
CANNOT be credited to the student’s account until the student does the
following:




The student must complete both your Entrance Counseling and MPN online
at www.studentloans.gov. To do so, Sign on to the StudentLoans.gov site.
The log in page will request the student’s Social Security Number, Name,
Date of Birth and Federal Student Aid PIN.
Once signed in, the student should click on Complete Entrance Counseling
and follow the instructions through completion of your Entrance Counseling. It
is recommended that the student print out confirmation once it is complete.
After this is completed, the student should click the “Complete MPN” link on
the left to complete their MPN.
Once the MPN and Entrance Counseling is completed, make sure to logout of
the site.
Information on how to complete the Entrance Counseling requirement is provided
by the student’s college. Entrance Counseling and Exit Counseling could
cover the following:
Understanding IRS Form 1098-E
Getting Loan Information From The National Student Loan Data SystemSM
(NSLDSSM)
How To Make And What Are The Benefits Of Electronic Payment
Borrower Grace Periods
Repayment Plans
Loan Interest Rates
Trouble Making Payments
Different Forms Of Student Loans
What Happens If You Default
Cancellation and Deferment Options for Teachers
Loan Forgiveness for Public Service Employees
Civil Legal Assistance Attorney Student Loan Repayment Program
(CLAARP)
Loan Consolidation Options
FINAL NOTE
Borrow Only What You Need
When the student’s college determines the student’s federal financial aid award,
it uses a standard budget to estimate the expenses the student and/or their
parents would incur while attending school. This expense estimate is referred to
as the Cost Of Attendance (COA).
In order to pay for these expenses, the family should first determine what they
have available from income, assets, and other financial assistance (out-side
scholarships, etc.) that could be available. The second thing that families should
do is, review whether or not they will qualify for tax credits (federal and state) and
review how the family is being taxed, so potential adjustments can be made. If
you can pay for college expenses by adjusting the family’s personal and tax
positions, the student might not need to borrow as much as the school has
awarded.