Key Takeaways
- Federal student loan borrowers must complete exit counseling when they graduate or drop below half-time enrollment.
- Private loans do not have a counseling requirement.
- Student loan exit counseling takes about 30 minutes.
After several years of hard work, you’re finally ready to earn your degree and leave school — congrats! But, before you celebrate, there’s an important step you must take: If you have federal student loans, you must complete student loan exit counseling when you graduate, leave school, or drop below half-time status.
The federal government requires exit counseling to ensure borrowers know what their loan obligations and repayment options are before their payments are due. Here’s what you need to know about student loan exit counseling, and what steps to complete to satisfy the requirements.
What Is Student Loan Exit Counseling?
If you took out loans as part of your financial aid package, you’ll likely have to complete exit counseling. Federal student loan exit counseling is mandatory for all undergraduate and graduate school loan borrowers. During counseling, you’ll learn about your loan repayment responsibilities, grace period, and repayment options. It basically works like a student loan 101 course, ensuring you know what you’re obligated to do with your loan payments.
Your college may have its own approved exit counseling course or exit interview process, or you can complete it electronically at StudentAid.gov. Regardless of which option you take, your exit counseling session will cover the following:
- Loan basics: Counseling covers the different types of federal student loans, grace periods, and who manages your loans.
- Interest accrual: Exit counseling uses examples to show you when and how interest accrues on your loan.
- Benefits of early payments: The counseling session will include simulations demonstrating how early or additional payments can help you reduce interest and accelerate your repayment.
- Consequences of missed payments: The exit counseling session will review what happens when you miss a payment or enter into default.
Exit counseling is necessary; if you don’t complete it on time, your college can withhold your transcript, diploma, and other university services.
[Important: Some private student loan or institutional loan lenders will provide their own versions of exit counseling, but these programs are not mandatory.]
How to Complete Exit Counseling in 7 Steps
Student loan counseling is a process that helps borrowers understand their repayment options. After yoTo complete the online exit counseling program via StudentAid.gov, follow these steps:
1. Update Your Contact Information
Log into your StudentAid.gov account and begin the Federal Student Aid exit counseling program. The program will show you what contact information your loan servicer has on file; it’s critical that you update it with your current information so the loan servicer can contact you about any issues or changes with your account. Make sure your email address, phone number, and mailing address is updated under your account settings.
2. Provide References
The program will ask you to list the contact information of family members and references; these people are not responsible for your loan’s repayment! The government requests this information as a backup in case it cannot reach you about your loans.
3. Notify Schools
List the colleges or universities you attended; the program will notify the schools that you have successfully completed exit counseling.
4. Enter Loan Information
The exit counseling platform will prompt you to enter specific details about your loans, including when you took them out.
5. Review Loan Obligations
The exit counseling program will review your obligation to repay your loan, outlining when payments will become due, how interest accrues, and how long your repayment period is.
6. Learn About Repayment Options
Next, counseling will cover your options if you can’t afford your monthly payments. Depending on your situation, you may be eligible for a deferment or forbearance — pausing your payments — or you may qualify for an income-driven repayment (IDR) plan. An alternative repayment plan could make your payments more manageable.
7. Understand Delinquency and Default
The program will outline when your payments are due, when your account is delinquent, and how long until your account enters into student loan default. It will also cover the consequences of missed payments and default, such as wage garnishment and negative credit reporting.
The program will ask you to confirm that you have read and understood your obligations, and you’ll provide an electronic signature.
Managing Your Student Loan Payments
After completing the exit counseling process, create an online account with your loan servicer so you can view your account, track your student loan repayment progress, and sign up for online or automatic payments. If you have any questions about your account or are struggling to keep up with your payments, contact your loan servicer for help.
Student Loan Exit Counseling FAQs
Who has to participate in student loan exit counseling?
Federal student loan borrowers with the following loan types must complete exit counseling:
- Federal Direct Subsidized
- Federal Direct Unsubsidized
- Federal Direct Grad PLUS
Parent PLUS Loan borrowers are exempt from the student loan exit counseling requirement.
What happens if I don’t complete exit counseling?
If you don’t complete the required exit counseling, your college or university can hold your official transcript, diploma, and other school services until you meet the requirement.
I’m not graduating; do I still need to do exit counseling?
Yes, you must complete exit counseling if you leave school, even if you don’t graduate.
How long does student loan exit counseling take?
How long exit counseling takes depends on how quickly you can read and process information, but most people can complete the required exit counseling in under 30 minutes, according to Federal Student Aid.
