Entrance counseling is the mandatory online session first-time Direct Loan borrowers must complete before loan funds can be disbursed.
How it works
A student who is borrowing a Direct Loan for the first time receives instructions to complete entrance counseling. The student finishes the modules and quiz. The system records completion. The institution verifies the record and proceeds with disbursement once the MPN is also on file. Students who have previously completed entrance counseling for the same loan program generally do not repeat it.
Example: a first-year online student accepts a Direct Unsubsidized Loan. Before the fall disbursement, the student completes entrance counseling and signs the MPN. The aid office confirms both items and releases the funds to the student’s account.
How it differs
Exit counseling occurs when a borrower graduates, withdraws, or drops below half-time enrollment and focuses on repayment. Financial-literacy workshops offered by institutions are voluntary. The master promissory note is the legal promise to repay; entrance counseling is the required educational step that precedes it.
Common errors
Assuming entrance counseling can be skipped because the student has private loans. Completing counseling under a different FSA ID than the one used for the FAFSA, causing a matching failure. Expecting the institution to disburse loans before counseling is recorded.
References
- 1. Federal Student Aid entrance counselingRequired before first disbursement
- 2. 34 CFR 685.304 counseling requirementsContent requirements
Entrance counseling is the mandatory online session first-time Direct Loan borrowers must complete before loan funds can be disbursed.