Exit counseling is a vital step in the federal student loan process. As student borrowers approach graduation or prepare to take a leave of absence, those with loans from the Federal Direct Student Loan program must complete an online exit counseling session on studentaid.gov. During this session, students take an interactive quiz that covers their loan history and provides information on various repayment plans.
According to Grace Taylor, MAH, CPFM, associate director of financial aid at PCOM, exit counseling is very important.
“When you are finishing up your time at a school, exit counseling is a bridge between being a student and starting to repay your loans,” Taylor explained. “It helps you understand your loans and what repayment options there are for you.”
It also allows the Department of Education to obtain updated contact information to provide to student loan servicers.
“When you complete the online exit counseling, you go through a few different sections,” Taylor said. “You update your contact information, review your loan history, learn about the timing for loan repayment and the rules around that, then you can review the different repayment options and make a preliminary selection of which plan you would like to choose.”
As part of the exit counseling process, participants will be provided with monthly payment estimates along with pertinent features for the various repayment plans.
“It also helps students understand that they really need to pay their loans,” Taylor added. “Defaulting on a federal student loan is a really big problem and it can be avoided by getting into a repayment plan that works for your budget.”
At PCOM, student borrowers have the option to participate in individualized, one-on-one exit counseling.
“We encourage all graduating students with loans to schedule an appointment with one of our Financial Wellness coordinators for that service,” Taylor said.
Taylor advised it is particularly helpful when students complete the mandatory online exit counseling before the one-on-one exit counseling session. By doing this, students will already have some background information and an idea of what repayment plan may be suited to their needs.
“It's always best practice to go through things more than once before making a big decision like which loan repayment strategy to implement,” she added.
During the one-on-one exit counseling session, PCOM financial aid counselors review the student’s entire loan history to ensure each borrower understands their loans.
“We go through how interest accrues and then we do hand calculations for the income-driven repayment plan that will be the best fit. We even go through couples' information if they are married or getting married soon,” Taylor explained. “We will also go through private student loans and help the student figure out how those are going to be repaid as well.”
Each appointment, Taylor added, is unique.
“We really take the time to work together during the meeting to get all questions answered and a plan ready to be implemented for repayment,” she said.
In addition to one-on-one exit counseling, PCOM also offers small and large group exit counseling sessions.
“The group sessions are great because we provide some case studies that help a lot of the students who attend understand their own situations,” Taylor said. “Sometimes students like to do all three types of counseling just to really make sure they understand everything.”
According to Taylor, the group sessions may be more comfortable for some students.
“Loan repayment can be a daunting challenge and sitting in a session with a bunch of your peers who are in the same or similar situation as you helps some of our students feel a sense of commiseration and community I think,” she explained.
Taylor believes it is important for students who are preparing for loan repayment to ask questions and seek support as needed.
“Transitions are hard and going from being a student for a very long time to living out in the ‘real’ world is a big change,” she said. “It’s an opportunity for growth and to learn new things.”
The main thing students should understand, Taylor emphasized, is that help is available.
“Everything is going to be okay,” she said. “There is always going to be a way to manage federal student loans and if they ever need any help, we are here for them.”
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