Entrance & Exit Counseling Best Practices

1. Entrance & Exit Counseling Best Practices NYSFAAA 43 Annual Conference “Helping Students Catch Their Dreams” October 20, 2011 Christopher Alonzo- MCC Jan Scheutzow- Nazareth College Dorcia Ulysses-Diallo- SUNY Geneseo

2. Agenda • Direct Loan Entrance Counseling • Delivery Options • Counseling Requirements • Best Practices • Direct Loan Exit Counseling • Delivery Options • Counseling Requirements • Best Practices

3. Agenda • Perkins Entrance Counseling • Delivery Options • Counseling Requirements • Best Practices • Perkins Exit Counseling • Delivery Options • Counseling Requirements • Best Practices • TEACH Grant Exit Counseling

4. Direct Loan Entrance Counseling

5. Entrance Counseling Delivery Options • Must be completed prior to first disbursement of Stafford loans to first-time loan borrowers • May be conducted in person, by audio visual presentation, or by interactive electronic means. • www.studentloans.gov • www.mappingyourfure.org • Direct Loan Entrance Counseling brochure (http://www.direct.ed.gov/pubs/entrcounselguide.pdf) • School must document completion of counseling

6. Entrance Counseling Requirements • Comprehensive loan information • Terms and conditions • Current interest rate, grace period, first payment due date • Rights and Responsibilities • Explain the use of the Master Promissory Note • Multi--year feature • Explain interest and capitalization • How interest accrues and is capitalized • Option to pay unsubsidized interest while in school

7. Entrance Counseling Requirements • Review repayment options • Standard, Extended, Graduated, Income-Based Repayment, Consolidation • Provide sample monthly repayment amounts • Based on average Stafford indebtedness of students at the same school • Stress importance of repayment • Stress repayment is required regardless of educational outcome or employability • Review deferments and forbearance

8. Entrance Counseling Requirements • Describe consequences of default • Adverse credit, collection costs, ineligible for deferments, seizure of state or federal tax refund, ineligibility of FSA funds • Provide NSLDS information • Provide school contact for questions • Stress importance of keeping the school/servicer informed of name, address, enrollment changes

9. Entrance Counseling Requirements • Stress importance of good record keeping • Discuss budgeting • Remind borrower of Exit Counseling

10. Entrance Counseling Best Practices • Panel discussion of SUNY, Private and Community Colleges

11. Direct Loan Exit Counseling

12. Exit Counseling Delivery Options • Must be completed before Stafford and Grad PLUS borrowers graduate, withdraw or drop below ½-time status • Upon withdrawal, must be sent within 30 days • May be conducted in person, by audio visual presentation, or by interactive electronic means • www.studentloans.gov • www.mappingyourfure.org • Direct Loan Exit Counseling brochure (http://www.direct.ed.gov/pubs/exitcounselguide.pdf) • School must document completion of counseling

13. Exit Counseling Requirements • Review information from entrance counseling • Consequences of default • Adverse credit, collection expenses, litigation • Importance of repayment obligation • Regardless of dropping out, ability to find a job, or satisfaction with program • Use of Master Promissory Note • Review repayment options • Standard, Extended, Graduated, Income-Based, etc • Review plan features, sample payments, interest charges, total payments • Review option to prepay without penalty and change repayment plans

14. Exit Counseling Requirements • Provide an average anticipated repayment amount on: • His/her indebtedness • The average indebtedness of other student borrowers at the same school or in the same program

15. Exit Counseling Requirements • Provide loan consolidation information • Effects of consolidation on total interest to be paid, option or prepay the loan or change repayment plans. • Discuss debt management strategies and tax benefits • Review forbearance and cancellation options • Inform student of NSLDS loan information • Inform student of FSA Ombudsman Office

16. Exit Counseling Requirements • Ensure borrower understands their rights and responsibilities • Collect and update personal and contact information • Must send to DL Servicing within 60 days of exit • School must document compliance of exit counseling

17. Exit Counseling Best Practices • Panel discussion of SUNY, Private and Community Colleges

18. Perkins Entrance Counseling

19. Perkins Entrance Delivery Options • Must be completed prior to first disbursement of Perkins loans for the award year • May be conducted in person, by audio visual presentation, by interactive electronic means, or by a third party provider • www.mappingyourfure.org • Campus Partners • School must document completion of counseling

20. Perkins Entrance Counseling Requirements • Rights & Responsibilities under Perkins Loan Program • Loan is for educational purposes only • Loan must be repaid and the school holds the MPN • Must notify student the amount of each Perkins disbursement made under the MPN, option to cancel disbursement or the loan • Name & address of school to which debt is owed • Name & address of servicing agent

21. Perkins Entrance Counseling Requirements • Maximum annual and aggregate loan amounts • Effect of accepting Perkins loan on other types of student aid • Total Perkins indebtedness and estimated monthly payment • Perkins consolidation and refinance options

22. Perkins Entrance Counseling Requirements • Notice of Dept. of Defense program for repayment based on certain military service • Complete list of Perkins charges – deducted or paid separately • School will report balance of loan to national credit bureau annually • Collect updated borrower information • Name, address, phone, spouse, employer, references

23. Perkins Entrance Best Practices • Panel discussion of SUNY, Private and Community Colleges

24. Perkins Exit Counseling

25. Perkins Exit Counseling Delivery Options • Completed prior to student graduating or drops below ½-time status • May be done in person, in groups, by audiovisual presentation, by interactive electronic means, or by third parties • Upon withdrawal- exit material must be mailed within 30 days of notice of withdrawal

26. Perkins Exit Counseling Requirements • Disclose pertinent repayment information • Contact information to request a copy of MPN • Contact information for school • Contact information for servicer

27. Perkins Exit Counseling Requirements • Name and address to whom payments should be sent • Estimated amount owed and repayment begin date • Total interest charges paid per repayment schedule • School must document Perkins exit completion

28. Perkins Exit Counseling Best Practices • Panel discussion of SUNY, Private and Community Colleges

29. TEACH Grant Exit Counseling • Panel discussion of SUNY, Private and Community Colleges

30. Questions/Comments

31. Resources • 2009-2010 Federal Handbook • Volume 2; 2-80 to 2-84 • Volume 6; 6-62 to 6-63; 6-111 to 6-113