Submitted
by: Shannon Cross, USA Funds Account Executive
The U.S. Department of Education recently issued Dear
Colleague Letter GEN-15-06 about loan counseling requirements and
flexibilities. What does the letter explain that you can do — and can’t do?
You
can …
·
Require first-year, first-time borrowers to
complete entrance counseling via studentloans.gov,
or through your own means, provided you include all required information, at a
minimum.
You
can’t …
·
Require subsequent counseling as a condition of
receiving a subsequent Direct Loan disbursement.
You
can …
·
Provide additional information as part of the
required entrance counseling process. You need to be reasonable regarding the
amount and scope of the information.
You
can’t …
·
Require students to use the Department’s
Financial Awareness Counseling Tool (FACT).
·
Impede a student’s access to Direct Loan funds
through overly burdensome additional counseling requirements.
You
can …
·
Require that the student complete a test
regarding the material presented during the required entrance loan counseling.
You also may provide feedback on any incorrect responses.
You
can’t …
·
Require a passing score on the test as a
condition of receiving a Direct Loan disbursement.
You
can …
·
Require students to complete worksheets or
exercises — such as those focusing on budgets or estimated earnings — as part
of the entrance counseling process.
You
can’t …
·
Require the student to justify the need for a
loan.
You
can …
·
Require students to attend workshops or loan
orientation presentations.
You
can’t …
·
Prevent the student from receiving loan funds
in a timely manner.
You
can …
·
Encourage returning or transfer students to
review loan balances and loan counseling information.
You
can’t …
·
Require subsequent counseling for a student who
already received the required entrance counseling, even at another institution.
You must assume the student completed entrance counseling if the student
received a Direct Loan from another school.
You
can …
·
Offer financial literacy courses, either for
credit or non-credit.
You
can’t …
·
Require the completion of such courses as a
condition for receiving a Direct Loan disbursement.
You
can …
·
Require students on financial aid warning or
financial aid probation (for satisfactory academic progress) to meet certain
academic requirements to continue to receive Title IV aid.
You
can’t …
·
Require students on financial aid warning or
financial aid probation (for satisfactory academic progress) to complete additional
loan counseling beyond the requirements for first-time borrowers as a condition
for receiving a Direct Loan disbursement.
You
can …
·
Incorporate in your default prevention plans
voluntary provisions for additional counseling beyond the required entrance
counseling for first-year, first-time borrowers.
You
can’t …
·
State or imply that this supplemental
counseling is required as a condition for a student to receive a loan.
You
can …
·
Customize for certain groups of students the
initial entrance counseling requirements to include the information or
activities allowed by the flexibilities in GEN-15-06.
You
can’t …
·
Require subsequent counseling for certain
groups of students, just as you cannot require subsequent counseling as a
general practice for all students.
For additional resources on loan counseling and successful
student loan repayment, visit www.usafunds.org.
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