Complete loan entrance counseling

Overview

If borrowing federal student loans, you must complete Loan Entrance Counseling. This online session explains borrowing rules, your rights and responsibilities, and repayment options.

What Loan Entrance Counseling Covers

Your Rights as a Borrower

• Amount you've borrowed
• Interest accruing
• Repayment options after graduation
• Deferment and forbearance
• Default consequences

Your Responsibilities

• Making payments on time
• Notifying of changes (address, school)
• Keeping records
• Repaying the full amount with interest

Types of Federal Loans

• Direct Subsidized: Need-based, interest covered in school
• Direct Unsubsidized: Not need-based, interest accrues
• Parent PLUS: For parents, separate entrance counseling

Repayment Plans

• Standard (10-year): Default plan
• Graduated: Smaller payments initially, larger later
• Income-Driven: Based on income (IDR, SAVE, etc.)
• Public Service Loan Forgiveness (PSLF): After 10 years of qualifying work

Default Consequences

• Damaged credit
• Wage garnishment
• Tax refund seized
• Legal action
• Lifetime consequences for finances

Completion Process

1. Log in at studentaid.gov
2. Navigate to "Complete Loan Entrance Counseling"
3. Complete 30-45 minute module
4. Answer quiz questions
5. Print/save certificate

Borrowing Amounts (Federal Direct Loans)

Direct Subsidized

Based on need:

• Freshman: Up to $3,500
• Sophomore: Up to $4,500
• Junior: Up to $5,500
• Senior: Up to $5,500
• Graduate: Not available for subsidized

Direct Unsubsidized

Not need-based:

• Freshman: Up to $5,500 ($2,000 additional on top of subsidized)
• Sophomore: Up to $6,500
• Junior: Up to $7,500
• Senior: Up to $7,500

Aggregate Limits

• Dependent student: $31,000 total undergraduate
• Independent student: $57,500 total undergraduate

Parent PLUS Loans

For parents:

• Credit-based (decent credit required)
• Higher interest rate (~8% as of 2026)
• Can cover full cost minus aid
• Separate entrance counseling required
• Parent, not student, is responsible

Interest Rates (2025-26)

• Direct Subsidized: ~6.53%
• Direct Unsubsidized: ~6.53%
• Parent PLUS: ~9.08%
• Private loans: 4-14% variable

Accruing Interest

• Subsidized: No interest while in school
• Unsubsidized: Interest accrues daily
• In school: Interest adds to principal at graduation
• After graduation: Monthly payments begin

Fee Structure

• Origination fee: 1.057% for Subsidized/Unsubsidized (taken from loan amount)
• Parent PLUS: 4.228% origination fee

After Counseling

Master Promissory Note (MPN)

• Separate from entrance counseling
• Legal agreement to repay
• Online signature
• Valid for 10 years

Credit Release

• Loans disbursed to school
• Credit balance, if any, refunded
• Track via student portal

Repayment Timeline

Grace Period

• 6 months after graduation or leaving school
• No payments required
• Interest still accrues on unsubsidized

Repayment Begins

• After grace period
• Monthly payment amount calculated
• Options to change plans

Standard 10-Year Repayment

Example:

• Borrow $27,000 total
• Interest ~6.5%
• Monthly payment ~$300
• Total paid: ~$36,000 over 10 years

Income-Driven Repayment

• Payment capped at percentage of discretionary income
• Longer term (20-25 years)
• Potential forgiveness after term
• Taxable at forgiveness

Public Service Loan Forgiveness

• After 10 years of public service + qualifying payments
• Full balance forgiven, tax-free
• Eligible employers: government, nonprofit 501(c)(3)

Thinking About Repayment

Estimate what your salary will be:

• Monthly loan payment should not exceed 8-10% of gross income
• Example: $5,000/mo gross = $400-$500 loan payment max
• High-debt students: consider lower-cost school options

Common Questions

Can I Refuse Loans?

• Yes, you can decline offered loans
• Better to not borrow if affordable
• Reduce amount borrowed if possible

Can I Pay Early?

• Yes, no prepayment penalty
• Reduces interest paid over time
• Accelerated repayment beneficial

Can I Consolidate?

• Direct Consolidation Loan combines federal loans
• Single monthly payment
• May help with repayment but not always better

Can I Forgive Loans?

• PSLF for qualifying employment
• Teacher Loan Forgiveness
• Perkins Cancellation (if applicable)
• Limited forgiveness programs

Private Loans

If considering:

• Usually higher interest
• No federal protections
• Cosigner often required
• Deferment less flexible
• Consider as last resort

Parent PLUS Consideration

Parents should weigh:

• Can you afford monthly payments after retirement?
• Is child's education worth the debt?
• Could alternative funding work (home equity, savings)?
• What's your post-college financial situation?

After Entrance Counseling

• Keep records
• Know your lender and servicer
• Update contact info
• Understand what you've agreed to
• Ask questions if unclear