Exit Counseling
Definition
Exit counseling is a process, typically mandated by colleges and universities, aimed at preparing students for the transition out of college. Counseling sessions often focus on managing student loans and understanding financial responsibilities after graduation.
Detailed Explanation
Exit counseling provides students with critical tools and resources to help them create a budget and manage their finances effectively after they graduate. The counseling programs, which are usually mandatory, are usually provided near the end of the student's college experience, prior to graduation.
During exit counseling, students are told about their rights and responsibilities as a borrower. This includes an overview of their total loan amount, interest rates, repayment plan options, and the consequences of defaulting on loans.
The goal of exit counseling is to equip students with the knowledge and skills necessary to successfully transition from college to the next phase of their lives, particularly in managing their finances and student loan repayments. It's believed that exit counseling can also reduce the likelihood of loan defaults.
Example
John, a soon-to-be college graduate, attends an exit counseling session organized by his university. During the session, he learns about the total amount he owes in student loans, the different repayment plans available, and how to contact his loan servicer. John also receives advice on budgeting and saving, which helps him plan for his financial future after college.
Key Articles Related To Exit Counseling
Related Terms
Financial Literacy: The ability to understand and effectively use different financial skills, including personal financial management, budgeting, and investing.
Loan Repayment Plan: A schedule or plan detailing how a borrower will pay back a loan, often including the amount and frequency of payments.
Default: Failure to repay a student loan according to the terms agreed upon in the loan's contract.
Financial Aid: Any grant or scholarship, loan, or paid employment offered to help a student meet his or her college expenses.
FAQs
Is exit counseling mandatory for all students?
Yes, exit counseling is typically mandatory for students who have taken out federal student loans.
What topics are covered in exit counseling?
Topics include understanding your loans, managing your spending, planning for repayment, avoiding default, and making finance-related decisions after college.
Can exit counseling be completed online?
Yes, many institutions offer online exit counseling sessions, which can be completed at the student's convenience.
How does exit counseling benefit students?
Exit counseling helps students understand their financial obligations, manage debt responsibly, and make informed financial decisions post-graduation.
Editor: Colin Graves