Entrance / Exit Counseling: Regulations, Updates and Best Practices CASFAA 2009, San Jose

1. Entrance / Exit Counseling:Regulations, Updates and Best PracticesCASFAA 2009, San Jose

2. 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

3. 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

4. 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

5. 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

6. 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

7. 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

8. 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

9. 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.

10. 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.

11. 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.

12. 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

13. 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

14. 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

15. 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

16. 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

17. 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

18. 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

19. Delivery Tools and Resources

20. 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

21. 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)

22. 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

23. Recommendations • Counseling for each new loan • Include money management information

24. Online Student Loan Counseling

25. 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

26. Demo session

27. Demo session

28. Regulatory requirements

29. 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

30. Range of indebtedness chart

31. 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

32. Exit repayment plan chart

33. Indebtedness customization

34. Student questions

35. Maintain documentation

36. SchoolExpress

37. 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

38. ExitExpress

39. FAO Access Area

41. New school MYF staff School

42. Current schools

43. User access levels

44. User access levels

45. Customization

46. Customized questions • Default questions • Select questions • Minimum number • Can submit new questions

47. Expanded counseling

48. Indebtedness levels

49. Indebtedness display

50. Budget calculator