Exit counseling for federal student loans

Students who take out federal loans for college are required by federal law to complete exit counseling at their school’s financial aid office upon graduation, if they endeavor to leave school, or if they drop below a half-time course load. The meeting is designed to ensure students understand all their loan repayment options and rights.

Make Exit Counseling Count

Exit counseling generally takes 20 to 30 minutes and must be completed in one session. You’ll need your FSA ID; contact info including names, addresses, email addresses, and telephone numbers; and financial information concerning your income, financial aid, and expenses.

During this time, you will be provided with vital information on options to facilitate repayment of your federal loan or loans.

Standard Repayment Plan

Usually, you’ll have a grace period of six months after leaving school or dropping below half-time student status and will not have to make loan payments during that time period. If you don’t choose a specific plan, you’ll be on the Standard Repayment Plan, under which your loans will be paid in full in 10 years.

Income-Driven Repayment

Loan holders can choose from several income-driven repayment plans that help lower monthly payments to ease the financial burden of the loan.

Direct Consolidation Loan

If you have multiple federal student loans, you could combine them with a Direct Consolidation Loan, which enables you to make a single monthly payment instead of making payments on all your loans. However, while you may have smaller total payments, loan consolidation usually costs more in the long run. Also, certain types of loans have restrictions that would adversely affect other loans.

Loan Forgiveness

Some people with student loans will qualify for student loan forgiveness, student loan discharge, or student loan cancellation. This can be a risky solution, as you could end up owing thousands in taxes as forgiven debt is considered taxable income.

The Public Service Loan Forgiveness Program lets you have your loan forgiven after working for a certain number of years in a career in public service. But that means you’re locked into your career and could end up dissatisfied.


You could default on a loan, but the default would severely lower your credit score and would stay on your credit record for seven years.


If you can’t make your payments on your loan, it may be possible to get some payments deferred for a period of time. Unemployment, medical issues, and other situations are among some of the situations that might qualify.

Ombudsman Group

If you have disputes regarding your federal loans, you can seek the services of the U.S. Department of Education’s Federal Student Aid Ombudsman Group. This is considered a last resort after exhausting all other options to resolve a student loan dispute. The Ombudsman Group can help identify loan repayment or consolidation options, identify options for resolving issues, explain charges, and resolve discrepancies.

Exit counseling for federal student loans can help you decide what to do about your student loans. Listen to the counselor, explain your situation, and ask any questions you need to ask in order to pursue a good outcome for your student debt.