Office of Financial Empowerment
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College Exit Counseling

Usually during your last semester at college (right before you graduate) or when you decide to leave school, you will need to attend an "exit" counseling session (especially if you took out a Stafford or Perkins loan). This session makes you aware of your repayment responsibilities, allows you to map out repayment schedules and ask any questions about the loans you borrowed. Below are two tips to keep in mind for your exit counseling session.

Understand repayment options.
A student loan must be repaid. During the exit session, you will learn when you must begin payments and how repayments will be scheduled. There are four general options when deciding how to repay your student loans:

  • Sign up for a repayment plan with the lenders and make monthly repayments in full and on time. Plans vary but are generally categorized as either a standard plan (paying a fixed amount over a fixed period of time of 10 years or less) or a graduated plan (paying a relatively fixed low amount during your first few repayments but the amounts increase as time goes by).

  • Consolidate your loans with one lender. Consolidation means combining all of your loans to be repaid under one lender. Generally your monthly repayments might be lower, the time to repay is longer and the interest rate is fixed. However, you should keep these tips in mind when deciding to consolidate:
    • Compare how much it will cost if you don’t consolidate since many lenders offer reduced rates if you pay on time.
    • Determine whether current loan features and benefits will still be available under the consolidated lender, especially if you’re consolidating federal and private loans together.
    • Different lenders may offer different consolidation plans. Shop around for the best deal.

  • Defer the loan. A deferment is a period of time during which no payments are required and interest does not accumulate. This is only available for certain student loans and not everyone can apply for a deferment. The most common reasons for deferment include inability to find full-time employment, enrollment in graduate school or displaying economic hardship (determined by your lender).

  • Get a forbearance for a loan. A forbearance means you don’t need to make a repayment during a specific period of time. However, you do have to pay the interest that accumulates during that time period. This option is generally taken during times of temporary economic hardship (determined by your lender).

Please note: If you’re unable to repay your loans as outlined in your loan agreement, you are defaulting on your loans. This will damage your credit rating. If you are having trouble repaying your student loans, speak with your lender to see if there are other repayment options (deferment, forbearance, loan forgiveness programs) or find a counselor to help map out a budget plan.

Research the school’s recommended lenders.
If you decide to consolidate with a lender, the financial aid advisor at your school will probably be able to recommend a couple of lenders to you. This is because many schools have established partnerships with financial lenders. Sometimes, the recommended lenders offer better rates but may have fewer protections if you default on the loan. Just as you would shop around for the best bargain in town, you should research other lenders before deciding on one.

Learn more about student lending, including the Student Bill of Rights, at the New York State Attorney General Web site