New student loan counseling helps students realistically plan repayments

By Becky Gordon
Staff Writer

The financial aid office at Washtenaw Community College, along with 48 other colleges and universities across the U.S., has partnered with the Department of Education to run an experimental loan counseling initiative. 

A federal register notice from the Department of Education explains that the purpose of the experiment is to test the effectiveness of additional loan counseling.

“It’s not for first time borrowers at all. We’ve always had loan counseling for first time borrowers, that’s been in the regulation for years,” said Lori Trapp, Director of Financial Aid at Washtenaw Community College. “The experiment is for students who have completed entrance counseling and are borrowing again.”

The experiment will split students who have gone through entrance counseling before into two groups: the treatment group and the control group. The Department of Education determined that the students in the treatment group would be those whose social security number ended in an even number, including zero.

The 2017-2018 school year is the first year the experiment has been implemented.

“When the experiment came around, and we’ve talked about how we can have an impact for years, it just seemed like a good fit for our philosophy here in the office,” said Trapp.

Student’s seeking to borrow loans will be notified of the need to attend the session. Trapp estimated that the sessions typically take about an hour to complete.

“After I got there, it was pretty informative. I learned some stuff that I didn’t at my other entrance loan counseling,” said Tim Cousino, Washtenaw Community College student who’d undergone a loan counseling session in August.

Sessions are completed in a computer lab on campus, and students are asked to bring their FSA ID and password to access websites during the counseling.

“It really is to make our students more informed borrowers. In the immediate timeframe, to just to think about the impact that it will have on them. Because that impact stays with you for many, many years,” said Trapp. 

The purpose of the session is to show students where they stand: what their projected income is after graduation, where their loan debt is, and an estimate of their monthly repayment amounts.

Typically the loan counseling sessions are handled and run by Gillian Gargiulo, a financial aid coordinator. However, any and all financial aid administrators can be responsible for running the session.

It begins with showing students an estimated projected income.

“We have them look at the Bureau of Labor Statistics to get an idea of what their income will be,” said Trapp.

Navigating to the Occupational Outlook Handbook on bls.gov allows students to search for professions either alphabetically, by pay, education, training or growth statistics.

“The best thing about it was there was a website where you can look up what the average pay is, for the job you’re looking for, by state. That’s pretty rad,” said Cousino.

Then students are asked to log into the National Student Loan Database system, nslds.ed.gov, to see what their loan debt is at.

“A third of students were not aware of their total debt,” said Trapp, who had compiled data from a short survey given to students participating in the loan counseling sessions from Oct. 1 to Oct. 24.

“Actually, because I do qualify for grants, […] it showed me how much Pell Grants I have left too,” said Cousino.

After viewing both sites, students are then guided to studentloans.gov.

“It takes their individual debt and shows them what their repayment amounts will be monthly. The different payment options, which can vary, but that’s a very eye opening experience for a lot of students,” said Trapp.

Trapp is a self described “big proponent” of the in-person counseling.

“I think it makes a difference to the students,” said Trapp. “We really want to get that loan debt in front of students, show them the tools that they have available to them.”

According to the survey administered to students following the session, 60 percent indicated the session would definitely impact their borrowing in the future.

However, when asked about their concern over their loan debt amounts, the majority of students replied indifferently.

“Student loans are an investment in yourself. I understand that, and they aren’t a bad thing, but they are a loan. And you will owe that money back,” said Trapp.

Comments

comments