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Entrance / Exit Counseling: Regulations, Updates and Best Practices CASFAA 2009, San Jose. We Will Discuss. FFEL Loan Counseling Requirements and Technical Corrections. Delivery Tools and Resources Mapping Your Future ® resources to meet regulatory requirements and assist students.
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Entrance / Exit Counseling:Regulations, Updates and Best PracticesCASFAA 2009, San Jose
We Will Discuss • FFEL Loan Counseling Requirements and Technical Corrections. • Delivery Tools and Resources • Mapping Your Future® resources to meet regulatory requirements and assist students
Entrance & Exit CounselingBefore HEOA • Requirements discussed only in the regs (§682.604(f)) • Requirement for one set of information for Grad PLUS borrowers with Stafford Loans • Different set of information for Grad PLUS borrowers without Stafford Loans • No requirement for Grad PLUS borrowers
Post HEOA (effective 8/14/08) • Entrance Counseling • Adds entrance counseling to statute • Spells out method options • in-person • written form, borrower must sign & return • online, borrower must acknowledge • Interactive counseling with tests/quizzes encouraged • Much more extensive list of requirements
FFEL Loan Counseling Requirements • Lenders and guaranty agencies were once prohibited from presenting required entrance counseling sessions in person as of July 1, 2008. • HEOA provisions allow for lenders and guaranty agency staff to conduct both entrance and exit. The institution must remain “in control” of session. • Detailed guidance is available in the 2008-09 Federal Student Aid Handbook, Chapter 2, pages 2–78 to 2–84 at ifap.ed.gov
Stafford Entrance Counseling:Requirements • Must be completed before initial disbursement of loan • Required elements of counseling include • Reinforce importance of repayment • Describe consequences of default • Explain use of Master Promissory Note • Stress that repayment is required regardless • Provide sample monthly repayment amounts
Stafford Entrance Counseling:Good Practices • Review terms and conditions of loan • Review repayment options • Discuss how to manage expenses • Communicate changes to lender • Review deferments, forbearance, etc. • Review borrowers’ rights and responsibilities
Stafford Entrance Counseling:Good Practices (cont.) • Remind borrowers of the refund and other policies affecting withdrawals • Reinforce the importance of keeping loan records • Remind borrowers about exit counseling
Stafford Exit Counseling:Requirements* • Review required information provided at the entrance counseling session • Provide an average anticipated monthly repayment amount • Review repayment options • Discuss debt management strategies * These requirements will apply to Grad/Professional PLUS borrowers as of 7/1/08 if they have a Stafford loan.
Stafford Exit Counseling:Requirements* (cont.) • Review forbearance, deferment, and cancellation options • Discuss NSLDS and FSA Ombudsman • Ensure that borrowers understand their rights and responsibilities • Collect and update personal and contact information * These requirements will apply to Grad/Professional PLUS borrowers as of 7/1/08 if they have a Stafford loan.
Stafford Exit Counseling:Requirements* (cont.) • Personal and contact information collected at exit must be provided to guaranty agency within 60 days • If borrower withdraws without notifying school, then the school must • Be confident borrower has opportunity to complete on-line counseling, or • Mail exit counseling material to borrower at last known address within 30 days of determining borrower withdrew * These requirements will apply to Grad/Professional PLUS borrowers as of 7/1/08 if they have a Stafford loan.
Stafford Exit Counseling:Good Practices • Provide name and address of borrower’s lender(s) • Explain how to complete deferment request • Suggest keeping copies of all correspondence • Discuss pros and cons of consolidation • PUT Servicing information
Entrance Counseling Requirements:Grad/Professional PLUS Borrowers • Required if no Grad/Professional PLUS disbursement in the past (before 7/1/08) • Required before first disbursement • Provide sample monthly repayment amounts based on: • Range of student loan indebtedness, or • Average indebtedness* of borrowers at same school or in same program at school *Based on those who received Grad/Prof PLUS
Entrance Counseling Requirements:Grad/Professional PLUS Borrowers • If borrower has a prior Stafford loan, then provide comparison of: • Maximum interest rate of PLUS versus Stafford • Periods when interest accrues of PLUS versus Stafford, and • Start of repayment of PLUS versus Stafford Average Indebtedness Examples.ppt
Entrance Counseling Requirements:Grad/Professional PLUS Borrowers • If borrower has not received a prior Stafford loan, school must • Explain the use of the Master Promissory Note • Emphasize the importance of repayment • Describe the consequences of default • Emphasize that repayment is required even if program is not completed or employment in field of study is not obtained
Why In-Person Loan Counseling • Meets one of the Department of Ed’s required methods • Can accommodate large groups of students • Default management/prevention tool • Target high risk populations • Studies prove the best learning occurs in instructor lead sessions* • *Source: Garman/Gappinger
Strategies For A Successful Loan Counseling Event • Select a target audience, if necessary • Consider common predictors of default • GPA • Major • Graduation • Continuous enrollment • Income of borrower • Indebtedness
When Conducting ALoan Counseling SessionEnsure students know what to expect • Ensure students know what to expect • How long the session will take • Describe handout materials • Documentation to be collected • Q and A • Use examples relevant to your audience • Check for understanding
Mapping Your Future® • Provides services to schools for the ultimate benefit of students • Provides variety of resources (career exploration, college preparation, paying for college, money management) • Provides neutral content, encouraging students to look at all sources of free funding
Entrance counseling Conducted in person, by audiovisual presentation, or by interactive electronic means before disbursement • Stafford • Perkins • Nursing • Health Professions • Grad PLUS • TEACH Grant (DE)
Exit counseling Conducted in person, by audiovisual presentation, or by interactive electronic means shortly before student ceases at least half-time study at school • Stafford • Perkins • Nursing • Health Professions • Grad PLUS • TEACH Grant
Recommendations • Counseling for each new loan • Include money management information
Counseling options • Health Professions entrance • Health Professions exit • Grad PLUS entrance • Grad PLUS exit • Stafford and Grad PLUS combined entrance • Stafford and Grad PLUS combined exit • TEACH Grant exit • Financial literacy • Stafford entrance (English and Spanish) • Stafford exit (English and Spanish) • Perkins entrance • Perkins exit • Stafford and Perkins combined entrance • Stafford and Perkins combined exit • Nursing entrance • Nursing exit
Sample repayment: entrance • Range of indebtedness (break out graduate borrowers) or average indebtedness of borrowers in the same program of study at the same institution • Range of indebtedness chart in counseling sessions • Can still provide school-specific information
Sample repayment: exit • Information on repayment plans with description of features of plans and samples showing average monthly payments with difference in interest paid and total payments shown for each • Sample payment scenario in counseling sessions • Can still provide average indebtedness for your school
Archive policy Mapping Your Future is not a record keeper. • Six months of data online • Two and ½ years prior years available upon customer service request • Older data unavailable
New school MYF staff School
Customized questions • Default questions • Select questions • Minimum number • Can submit new questions