What to expect with student loan entrance counseling

What is entrance counseling?

Student loan entrance counseling is a required informational session for first-time student loan borrowers. It provides basic information about your student loans, what to expect with repayments and how to manage your finances. The purpose is to provide you with the information you need to stay on top of your student loan repayments.

When should I complete entrance counseling?

You’re legally required to go through entrance counseling the first time you take out a Direct Subsidized or Unsubsidized Loan. You must complete the course before the money is disbursed to your school. You also have to complete entrance counseling the first time you take out a Direct PLUS Loan — even if you already went through it for a subsidized or unsubsidized loan.

Where can I complete entrance counseling?

Most students complete entrance counseling on StudentLoans.gov. You can do so by logging in to your Federal Student Aid (FSA) account and follow the directions to get started.

Your school might have additional entrance counseling requirements. For example, some schools hold entrance counseling in person. Others might require students to fill out a separate online form. Contact your school’s financial aid office if you’re not sure how it conducts entrance counseling.

What information do I need to complete entrance counseling?

You’ll need the following information on hand to get started:

• FSA ID
• Your school’s name
• Income
• Financial aid award
• Living expenses

The Department of Education recommends that you have your financial aid award letter, a list of your school’s tuition and fees, and your student account information handy before you get started.

How long does it take?

Typically, it takes between 20 and 30 minutes to complete a student loan entrance counseling session.

5 topics covered in federal student loan entrance counseling

The StudentLoans.gov entrance counseling session is divided into five sections, which cover how your loans work and your personal finances. If your school has its own entrance counseling program, you might not go through these exact sections, but it should cover the same information.

1. Understand your loans

The first part gives you an overview of the loans you’re about to receive. You’ll learn the basics, including the following sections:

• Your student loans. How much you owe and where to find information about your current student loans in the National Student Loan Data System (NSLDS).
• Loan basics. A breakdown of how federal Direct loans work, including the definitions of essential terms like capitalized interest and acceleration.
• Free money first. How to avoid taking out more loans by applying to scholarships and grants first or getting a part-time job.
• Types of federal student loans. An overview of how different federal student loan programs work.
• Loan limits. How much you’re able to borrow for Direct Subsidized, Unsubsidized and PLUS Loans each year.

2. Manage your spending

The second part of entrance counseling is meant to help you understand how much you’ll need to budget for your personal expenses and how to be a responsible borrower. It includes the following sections:

• Your school expense budget. You’ll receive a form to fill out with information about your financial aid and savings, as well as your expenses. This will help you estimate how much you can expect to spend each month — and if you have enough funds to cover your expenses.
• Manage your expenses. Tips on how to create a year-long budget, reduce your spending and lower the amount you borrow by returning any extra funds you don’t need after your loans are disbursed.
• Responsible borrowing. Tips on how to take out student loans in a way that saves you the most money. Plus, a calculator you can use to find out how much interest you can save by making interest payments before your grace period is up.
• Federal loans first. A side-by-side comparison of federal and private student loans, showing why you might want to hold off on private loans until you’ve exhausted your federal options.

3. Plan to repay

The third part of entrance counseling guides you through what to expect when you have to pay back your student loans. It includes the following sections:

• Estimate what you owe and earn. You’ll receive a form to fill out with your estimated income to compare your monthly repayments and total loan cost on the different repayment plans available to you. This form also recommends repayment plans based on your income and debt load.
• Entering repayment. Basic information on when your repayments are due and how to make additional repayments, plus a comparison of how repayments work with subsidized and unsubsidized loans.
• Navigating repayment. Basic information on where you’re required to make repayments, when you should contact your servicer and how to change your plan.

4. Avoid default

The fourth part of entrance counseling gives tips on how to stay on top of your student loan repayments — and advice if you’re struggling. It includes the following sections:

• Avoiding default. General tips on how to avoid defaulting on your loans, including finishing your program, making repayments on time and staying in touch with your servicer.
• Trouble making repayments. An overview of deferment and forbearance as a way to avoid defaulting if you’re struggling to make repayments — with a calculator to show how much postponing repayments might cost you.
• Forgive, cancel or discharge your debts. An overview of different forgiveness, cancellation and discharge options available on certain student loans, which can reduce or even eliminate your debt load in specific situations.
• Delinquency and default. Definitions of when a student loan becomes delinquent and when it goes into default — and how defaulting might affect your life.
• Records and disputes. A list of which loan papers you should keep on file and how to resolve issues with loans you’re about to receive.
• Loan consolidation. A brief overview of how the Direct Consolidation Loan works, along with the benefits and drawbacks.

5. Finances: A priority

The fifth and final section gives general tips for financial planning and making sure you stay financially healthy. Sections include:

• Plan for the future. Tips for how to save and spend wisely such as paying off student loan interest while you’re in school and keeping an emergency fund.
• Your income and taxes. An explanation of how taxes work when you get that first job out of school, as well as a breakdown of educational tax incentives — like deductions for student loan interest payments and tax credits while you’re still in school.
• Your credit and identity. An overview of how your credit history works, as well as tips to keep your score high and protect your identity.
• Credit cards and other borrowing. Tips for how to take on other types of debt and use credit cards wisely.

After you complete entrance counseling, you’ll get an overview of your current loans, how much you’ll need to pay each month and a sample repayment plan. It also includes links to other government pages that you can use to learn more about different topics.

Bottom line

Student loan entrance counseling is required the first time you take out a Direct Subsidized or Unsubsidized Loan, and the first time you take out a PLUS Loan. While it doesn’t have to take more than half an hour to complete, take full advantage of the calculators and tools to get a strong grasp of what to expect when repayments kick in.

You can learn more about how to pay for school with our guide to student loans.

Frequently asked questions

• Do I need to complete entrance counseling for private student loans?

  Not necessarily. However, it depends on your school and the lender’s policies. Reach out to the financial aid office if you’re not sure.

• Can I start entrance counseling and complete it later?

  No. Students are required to complete entrance counseling in one session.

• Can I complete entrance counseling with a student loan counselor?

  You can, but their expertise likely won’t help before you enter repayment. Student loan counselors are financial advisers who work with credit counseling agencies. They can help you come up with a repayment strategy if you’re struggling with your loans — but you’ll be charged a fee.