Leading the Pack… YLS Loan Counseling

It’s nice to be ahead of curve, lead the pack, whatever euphemism you want to use. It’s also great to receive proof that what you are doing is the right approach.  And that’s what happened to us when TG (a nonprofit promoting education access) in cooperation with the National Association of Financial Aid Administrators released a report last month entitled INFORMED OR OVERWHELMED? A Legislative History of Student Loan Counseling with a Literature Review on the Efficacy of Loan Counseling

What that report validated for YLS was that our approach to loan counseling is on target.  Because the report concluded that in loan counseling “personalized information appears to contribute to a better understanding of information, and face-to-face counseling may be the best way to deliver this personalized information. Both students and financial aid administrators believe that some personalization, preferably face-to-face, is needed for comprehension”.

We began offering personalized loan counseling sessions to our 3Ls three years ago because we recognized that it had become increasingly challenging to navigate the “ever changing” student loan repayment landscape.   We also believed that, as an institution, we had an obligation to insure that our students made the best short term and long term decisions incorporating their loan debt into their larger financial planning.

The bottom line which underscores the need for individualized loan counseling is this… everyone’s total loan debt is different, everyone’s career path is different and, as such, everyone’s loan repayment is different.  (Let’s also add that based on all those factors everyone’s COAP eligibility is also different.)

There is no effective “one size fits all” loan counseling model. Yet so many schools simply default to having their students complete a generic “on line exit interview” required by federal regulations to get their loan repayment information.  We still have our students do the online exit (so that we are in federal compliance) but also take it one step further with our one on one sessions.

The sessions we offer are all about developing a personalized loan repayment plan for you.  In these one hour (or so) meetings we:

• review your total loan portfolio and current balances,
• identify who your loan servicer(s) is, their role in your repayment and how to work with them,
• go over a calendar of when repayment will start and what you need to do to prepare for it
• evaluate the myriad of repayment plan options offered by the Dept. of Education so that we can compare both monthly repayment costs and overall loan repayment costs (i.e. total principal vs. interest paid) and determine the most viable plan for you’
• project what your support under our loan repayment assistance program COAP may look like over your ten years of eligibility, even accounting for various scenarios (job changes, marriage, children, etc.) along the way.

But we didn’t really need a report to validate that our personalized approach was the way to go. The proof for us is always our student themselves. We see that many of them walk into these sessions with a lot of trepidations and fear (let’s face it no one wants to really face their loan debt head on). But overwhelming when they finish the meeting they always say things like “that wasn’t as bad as I thought it would be” or “I really can manage this”.   And that’s our goal … to have you walk out feeling confident that you have plan of action to deal with the loan debt in the context of your overall financial planning.