Loan Exit Counseling
What Is Loan Exit Counseling?
Loan exit counseling is a required educational session for federal student loan borrowers who graduate, leave school, or drop below half-time enrollment.
It is designed to prepare borrowers for repayment responsibilities.
Exit counseling applies to most federal Direct Loan borrowers.
Why It Matters
Loan exit counseling:
- Explains repayment options
- Reviews borrower obligations
- Provides information on deferment and forgiveness
It ensures borrowers understand interest accrual, payment schedules, and available assistance programs before repayment begins.
Completion is required by federal regulations.
How Loan Exit Counseling Works
Loan exit counseling is completed online through the federal student aid system.
Example: A graduating student completes exit counseling, reviews repayment plans, and confirms contact information before the grace period ends.
The session typically covers:
- Loan balance
- Interest rates
- Repayment plan options
- Consequences of default
Exit counseling does not replace repayment; it prepares borrowers for it.
Exit Counseling vs. Entrance Counseling
Entrance Counseling → Completed before receiving federal loans
Exit Counseling → Completed before entering repayment
Each serves a different stage in the loan lifecycle.
FAQs About Loan Exit Counseling
Is exit counseling mandatory?
Yes, for most federal student loan borrowers.
Does it set your repayment plan?
Borrowers choose repayment plans separately.
Can it prevent default?
It provides education to help reduce risk of delinquency and default.
Related Terms
