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Entrance Counseling: Requirements and Recommendations for FAOs

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As student loan borrowers prepare to make a significant financial investment in their future, the U.S. Department of Education requires they first be informed on the basics of borrowing via an Entrance Interview. In addition to this fact sheet, the AAMC has resources to help you complete this requirement.

Entrance Interview Requirements*

  • Explain the purpose of the MPNwhat it is and how it is used
  • Describe National Student Loan Data System and how to access their records
  • Reinforce the importance of repayment and the seriousness of this obligation
  • Describe the consequences of default
  • Emphasize that repayment is required regardless of whether or not the:
  1. program is completed or completed in the normal amount of time
  2. borrower obtains employment
  3. borrower is satisfied with education experience
  4. purchased program or services are received
  • Provide examples of monthly repayment amounts based on either:
  1. a range of student levels of indebtedness or
  2. the average indebtedness of other borrowers in the same program of study at your school
  • Define half-time enrollment, impact of less than half-time enrollment, and correct steps to withdraw so that exit counseling can be provided
  • Explain interest accrual, capitalization, and the borrower’s option to pay interest while enrolled
  • Explain the impact of accepting loans on eligibility for other aid
  • Provide contact information if borrower has questions about rights, responsibilities, loan terms, or conditions

Note: The above requirements are applicable to first-time borrowers of Direct Unsubsidized and Direct PLUS Loans who have not received any previous Direct Subsidized Loans, Direct Unsubsidized Loans, or PLUS Loans.

Additional Requirements for Direct PLUS Borrowers

Direct PLUS borrowers must be given notice of:

  • The maximum interest rate for Direct Unsubsidized Loans versus Direct PLUS Loans
  • The periods when interest accrues on Direct Unsubsidized Loans versus Direct PLUS Loans
  • The point at which Direct Unsubsidized Loans enter repayment versus Direct PLUS Loans

Provide examples of monthly repayment amounts based on either:

  • a range of Direct PLUS Loan levels of indebtedness, or
  • the average indebtedness of borrowers that received Direct Subsidized Loans, Direct Unsubsidized Loans and Direct PLUS Loans while in the same program of study

AAMC's FIRST Team Also Recommends

  • Encourage good record keeping and use of the MedLoans® Organizer and Calculator

  • Discuss the importance of budgeting

  • Utilize and recommend appropriate FIRST resources for matriculating medical school students

  • Review terms and conditions of the loans

  • Discuss rights and responsibilities

  • Review repayment, deferment, forbearance, cancellation, and forgiveness options

  • Stress communication with servicers/lenders (i.e. changes in name, address, or enrollment status)

  • Review other sources of aid

  • Remind borrowers of the exit counseling requirement

  • Suggest participation in the bimonthly FIRST Friday Webinars to learn about relevant financial matters.

*For detailed Entrance Loan counseling regulations see: DL: 34 CFR 685.304(a)(6), Perkins: 34 CFR 674.16(a), Common Manual 4.4.C and 4.4.D., and the most recent FSA Handbook.

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