Exit counseling is misguided

Close-up of couple doing finances at home

Close-up of couple doing finances at home

Editorial Board

Government loans used to pay student tuition fees need a reformed, borrower-friendly exit counseling strategy.

Outgoing students may have received a letter from the Financial Aid and Scholarship Office informing them they will need to complete exit counseling for loans they’ve taken out during the course of their undergraduate career.

The letter, which is sent to the student’s mailing address right before their anticipated graduation date, states “federal law requires students who borrow federal students loans to complete exit counseling.”

Loan exit counseling is intended to educate graduating students on options available to them when repaying their student loans. The counseling also attempts to educate those graduates about how to manage their finances and save money as they’re repaying loans.

The idea of educating students about their repayment options seems to be a good faith attempt to enhance their road to success, but there are several issues with the exit counseling itself.

Students are given two weeks to complete counseling once they receive the formal letter. What’s most troubling about what appears to be an obligatory completion period is its timing, which happens to be at the end of the semester when most students are scrambling to complete class assignments and study for finals.

The bad timing acts as an impediment for students to absorb all of the loan information being thrown at them as they’re balancing their studies and submitting resumes to future employers.

In addition to the bad timing, students must select their desired loan repayment option toward the end of the online counselling regardless if the student fully understands what they’re agreeing to.

The counseling gives students several repayment options and explains interest rates, but what’s not clear is which option is best for a student who has yet to secure employment or which option students entering different professions should consider.

The letter students receive about their exit counseling is also misleading and gives the impression students won’t be eligible to graduate if their exit counseling is not complete by the end of the second week.

“Federal law requires students who borrow federal loans to complete exit counseling,” according to the exit counseling letter. This is entirely untrue as a student will still graduate despite not completing the online exit counseling. This is also unfair to the students the financial aid office wishes to help; the wording pressures students who may not fully understand all of the loan repayment plans to make a haste decision whether they are ready or not.

Students should know the options available to them since their student loan debt is their responsibility, but pressuring students to complete the counseling just to have them select their loan repayment option is underhanded.

If, as the letter states, exit counseling “is an opportunity to remind yourself of your rights and responsibilities as a student loan borrower,” falsely representing the exit counseling as a requirement wouldn’t be needed.

If the government was serious about helping students succeed, it would work a little harder to provide students with an on-campus option to understand their loan repayment options and expectations without intimidation.