What is Entrance Counseling for Student Loans?

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If you take out federal student loans, before Uncle Sam distributes your loan funds you’ll have to go through entrance counseling.

Entrance counseling helps you understand the terms and conditions associated with your student loans, and what your rights and responsibilities are. The main goal is to help decrease the number of federal student loan borrowers who fall into default and delinquency.

Keep reading to learn more about how student loan entrance counseling works:

What is entrance counseling for student loans?

Entrance counseling is a mandatory process when taking out federal student loans, and your loan funds won’t be disbursed until you complete counseling. The process takes about 30 minutes to complete, but you must do so in one sitting, so set aside half an hour to get the job done.

The purpose of entrance counseling is to ensure that you know exactly what you’re getting into before you borrow a large sum of money for your education. The online session will walk you through:

• Your rights and responsibilities when it comes to repayment
• Your repayment terms
• The loan conditions

Many student borrowers are quite young, and student loans may be the first credit they apply and qualify for. Entrance counseling may feel like one more thing to add to your to-do list, but it can be a really helpful introduction to how loans and interest work and how to manage your payments.

During entrance counseling, you’ll learn things like:

• How much you can borrow and what your repayment options are
• How to avoid delinquency and default, as well as the repercussions of failing to repay loans
• Financial terms and concepts, including cancellation, capitalization, consolidation, deferment, forbearance, and grace periods
• How to plan a budget and the value of emergency funds
• How credit scores work
• What educational tax credits and deductions are
• How interest accrual works and how debt grows over time
• What master promissory notes are
• The benefits of paying down student debt while still in school
• How to resolve lender disputes

To complete student loan entrance counseling, you’ll need to create an account at StudentAid.gov and provide the following information:

• Name of your school
• Federal student aid ID
• Email
• Date of birth
• Social Security number
• Income
• Financial aid information
• Current and expected living expenses

After you complete your entrance counseling, your school will receive a record of your completion — only then can your loan funds be disbursed.

Why do I need student loan entrance counseling?

Student loan entrance counseling exists to make sure you understand the financial commitment you’re taking on when you accept a federal student loan offer. You’ll better understand loan terms, how to budget for repayment, and how to avoid falling into student loan default — which is when you fail to make your student loan payments for nine months.

If you fall into default on your student loan payments, the following consequences can occur:

• The entire balance becomes due immediately — including interest and fees.
• You become ineligible for deferment and forbearance plans.
• The default will remain on your credit history for seven years, and your credit score becomes damaged.
• The federal government can garnish your wages, tax refund, or federal benefits.
• You’ll lose access to future financial aid.
• You may lose the ability to buy or sell select assets, like real estate.

It’s worth noting that schools can have entrance counseling requirements that differ slightly from federal requirements. You can contact your school’s financial aid office to see what its entrance counseling requirements are.

Check Out: How to Go Back to School With Student Loans in Default

When does student loan entrance counseling occur?

Both undergraduate and graduate students that take out federal student loans may have to undergo entrance counseling. If you’re taking out one or more of the following types of federal student loans for the first time, you’ll need to complete entrance counseling to qualify for the loans and receive loan funds:

• Direct Subsidized Loans
• Direct Unsubsidized Loans
• Direct PLUS Loans (for graduate or professional students)

You can complete student loan entrance counseling on the StudentAid.gov website.

Learn More: Federal Student Loans Guide: Subsidized and Unsubsidized Loans Review

What is the difference between entrance and exit counseling?

Similar to how you must complete entrance counseling, you’ll also have to complete exit counseling. While entrance counseling must occur before you receive your loan funds, exit counseling occurs when you end your undergraduate education or leave graduate school.

Leaving school doesn’t just mean graduating from an undergraduate or graduate school program. Unenrolling, dropping below half-time enrollment, or graduating all count as leaving school. Parents can rest easy here — Parent PLUS Loan borrowers don’t have to complete student loan exit counseling.

During exit counseling, you’ll go through many of the same topics discussed in entrance counseling. Once again, the goal is to ensure you’re clear on what your repayment obligations are. You must also have the knowledge you need to properly manage loan repayment and avoid falling into default. During exit counseling you’ll learn more about the different repayment plan options you have to choose from and will gain insight into what your student loan payments will be like.

Read More: Here’s How Many People Default on Their Student Loans in The U.S.

The companies in the table below are Credible’s approved partner lenders. Whether you’re the borrower or cosigner, Credible makes it easy to compare rates from multiple private student loan providers without affecting your credit score.

Lender	Fixed Rates From (APR)	Variable Rates From (APR)
Credible Rating Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology.	3.15%+	1.73%+
Fixed APR: 3.15%+ Variable APR: 1.73%+ Min. credit score: 540 Loan amount: $2,001 to $400,000 Loan terms (years): 5, 7, 10, 12, 15, 20 Repayment options: Full deferral, fixed/flat repayment, interest only, academic deferment, military deferment, forbearance, loans discharged upon death or disability Fees: None Discounts: 0.25% to 1.00% automatic payment discount, 1% cash back graduation reward Eligibility: Must be a U.S. citizen or permanent resident or DACA student enrolled at least half-time in a degree-seeking program Customer service: Email, phone Soft credit check: Yes Cosigner release: After 12 on-time principal and interest payments Loan servicer: Launch Servicing, LLC
Credible Rating Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology.	3.99%+1	2.29%+
Fixed APR: 3.99%+1 Variable APR: 2.29%+ Min. credit score: 720 Loan amount: $1,000 to $350,000 Loan terms (years): 5, 10, 15 Loan types: Any private or federal student loan Repayment options: Full deferral, full monthly payment, interest only, immediate repayment, academic deferment, military deferment, forbearance, loans discharged upon death or disability Fees: Late fee Discounts: Autopay, loyalty Eligibility: Available in all 50 states (international students can apply with a creditworthy U.S. citizen or permanent resident cosigner) Customer service: Email, phone, chat Soft credit check: Yes Cosigner release: After 36 months Loan servicer: Firstmark Services
Credible Rating Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology.	3.22%+2,3	1.29%+2,3
Fixed APR: 3.22%+2,3 Variable APR: 1.29%+2,3 Min. credit score: Does not disclose Loan amount: $1,000 up to cost of attendance Loan terms (years): 5, 8, 10, 15, 20 Repayment options: Full deferral, full monthly payment, fixed/flat repayment, interest only, immediate repayment, academic deferment, forbearance, loans discharged upon death or disability Fees: Late fee Discounts: Autopay Eligibility: Must be a U.S. citizen or permanent resident and be making satisfactory academic progress. Customer service: Email, phone Soft credit check: Yes Cosigner release: After 24 months Loan servicer: College Ave Servicing LLC
Credible Rating Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology.	3.65%+	2.67%+
Fixed APR: 3.65%+ Variable APR: 2.67%+ Min. credit score: Does not disclose Loan amount: $1,000 to $99,999 annually ($180,000 aggregate limit) Loan terms (years): 7, 10, 15 Repayment options: Full deferral, immediate repayment, interest-only repayment, flat/full repayment, academic deferment, military deferment, forbearance, loans discharged upon death or disability Fees: None Discounts: Autopay Eligibility: Available to borrowers in all 50 states. Must be a U.S. citizen or permanent resident. Customer service: Phone, email Soft credit check: Yes Cosigner release: After 36 months Loan servicer: American Education Services Min. income: Does not disclose
Credible Rating Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology.	4.52%+7	4.63%+7
Fixed APR: 4.52%+7 Variable APR: 4.63%+7 Min. credit score: 750 Loan amount: $1,000 to $200,000 Loan terms (years): 7, 10, 15 Repayment options: Full deferral, full monthly payment, interest only, immediate repayment, academic deferment, loans discharged upon death or disability Fees: Late fee Discounts: Autopay Eligibility: Must be a U.S. citizen or permanent resident and have a minimum income of $30,000. Customer service: Email, phone Soft credit check: Yes Cosigner release: After 36 months Loan servicer: Granite State Management & Resources (GSM&R)
Credible Rating Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology.	5.25%+8	2.92%+8
Fixed APR: 5.25%+8 Variable APR: 2.92%+8 Min. credit score: 670 Loan amount: $1,001 up to cost of attendance Loan terms (years): 5, 10, 15 Repayment options: Full deferral, full monthly payment, interest only, immediate repayment, academic deferment, forbearance Fees: Late fee Discounts: Autopay, reward for on-time graduation Eligibility: Must be an Indiana resident or a U.S. citizen attending an eligible Indiana school Customer service: Email, phone, chat Soft credit check: Yes Cosigner release: After 48 months Loan servicer: American Education Services
Credible Rating Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology.	4.89%+	N/A
Fixed APR: 4.89%+ Variable APR: N/A Min. credit score: 670 Loan amount: $1,500 up to cost of attendance less aid Loan terms (years): 10, 15 Repayment options: Full deferral, interest only, immediate repayment, academic deferral, forbearance Fees: None Discounts: None Eligibility: Must be a U.S. citizen or permanent resident and be making satisfactory academic progress. Customer service: Email, phone Soft credit check: Yes Cosigner release: After 48 months Loan servicer: American Education Services (AES)
Credible Rating Credible lender ratings are evaluated by our editorial team with the help of our loan operations team. The rating criteria for lenders encompass 78 data points spanning interest rates, loan terms, eligibility requirement transparency, repayment options, fees, discounts, customer service, cosigner options, and more. Read our full methodology.	3.75% – 13.72% APR9	2.62% – 12.97% APR9
Fixed APR: 3.75% – 13.72% APR9 Variable APR: 2.62% – 12.97% APR9 Min. credit score: Does not disclose Loan amount: $1,000 up to cost of attendance Loan terms (years): 10 to 15 Repayment options: Full deferral, fixed/flat repayment, interest only, academic deferment, forbearance, loans discharged upon death or disability Fees: Late fee Discounts: Autopay Eligibility: Must be a U.S. citizen or permanent resident. Also available to non-U.S. citizen students (including DACA students) attending a school located in the U.S. who apply with a qualifying cosigner. Customer service: Phone, chat Soft credit check: Yes Cosigner release: After 12 consecutive on-time payments Loan servicer: Sallie Mae
Compare private student loan rates without affecting your credit score. 100% free!Compare Private Loans Now
Lowest APRs reflect autopay, loyalty, and interest-only repayment discounts where available | 1Citizens Disclosures | 2,3College Ave Disclosures | 7EDvestinU Disclosures | 8INvestEd Disclosures | 9Sallie Mae Disclosures

About the author

Jacqueline DeMarco

Jacqueline DeMarco has been a personal finance writer for over seven years and is a contributor to Credible. She has contributed content to more than a dozen financial brands, including LendingTree, Credit Karma, Fundera, Chime, MagnifyMoney, Student Loan Hero, ValuePenguin, SoFi, and Northwestern Mutual.

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