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|Student Loan Counseling|
Improving Federal Student Loan Counseling for Our Students
Student loans play a considerable role in how college students finance their education today. As student loan borrowing grows in prevalence, policymakers are increasingly aware of the need to improve the federal system of lending to students. One area of policy reform that has unique bipartisan consensus is that student loan borrowers should have more in the way of counseling.
The U.S. Department of Education agrees that this is the appropriate direction to take and is moving to an annual student loan acknowledgment. NCAN applauds this action, and specifically, recommends that student loan counseling should:
Currently, to access federal student loans, borrowers must complete an online session of entrance counseling, said to take 20-30 minutes – and sign a legal agreement, called the Master Promissory Note (MPN), which explains the loans’ terms and conditions.
Experts believe these existing requirements and counseling methods are inadequate and ineffective towards achieving the goal of more informed student borrowers. There is considerable research to indicate that student borrowers lack key information regarding their loans and ultimately how much they owe (e.g., Whitsett, 2012; and Andruska, Hogarth, Fletcher, Forbes, & Wohlgemuth, 2014). Students deserve more in the way of consumer-tested counseling that is informative and understandable.
Federal Student Loan Resources: