Trends and Issues

Policy potpourri

Q.: We are reviewing our exit counseling materials for students who are graduating this month. Can you remind me of the new requirements for exit counseling?

A.: The Higher Education Opportunity Act (HEOA) reauthorized the Higher Education Act (HEA) and amended exit counseling requirements in Section 485(b) of the HEA. Effective August 14, 2008, in addition to information currently required in regulations, the following new and revised information must be provided in Stafford, Grad PLUS, and Perkins exit counseling:

• Information on available repayment plans, as well as a description of the different features of each plan;
• Sample information showing the average anticipated monthly payments under each repayment plan, including the difference in interest paid and total payments under each plan;
• General descriptions of the terms and conditions for full or partial forgiveness or cancellation, deferment, or forbearance;
• A copy of a publication from ED — yet to be distributed — that will include extensive loan literacy and debt management information
• The borrower's option to prepay each loan, pay on a shorter schedule, and change repayment plans;
• The likely consequences of default, including delinquent debt collection procedures, adverse credit reports, federal offset, and litigation;
• General description of the types of tax benefits that may be available to borrowers;
• The availability of NSLDS as well as how the borrower can use the system to obtain information on her loans; and
• The consequences of consolidating Title IV loans, including at least:
  • The effects on total interest and fees to be paid, and length of repayment;
  • The effects on underlying loan benefits, including grace periods, and forgiveness, cancellation, and deferment options;
  • The option to prepay the loan or change repayment plans; and
  • Variation in borrower benefit programs among different lenders.

More information is located in Section 485(b) of the Integrated HEA on TG Online, available at www.tgslc.org/policy/hea.cfm.

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