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SMC|Enrollment Development|Financial Aid and Scholarships|Loan Counseling

Loan Counseling

ENTRANCE COUNSELING
All student loans are processed through the Department of Education's Direct Loan program. Borrowers must complete a Direct Loan Master Promissory Note (MPN) and Entrance Counseling for each year you are approved for a loan at Santa Monica College.The goal of Entrance Counseling is to help you understand what it means to take out a federal student loan. 

What is entrance counseling?
During entrance counseling, you will learn about the following:
  • What a Direct Loan  is and how the loan process works
  • Managing your education expenses
  • Other financial resources to consider to help pay for your education
  • Your rights and responsibilities as a borrower

Who has to complete entrance counseling?
All students taking out Direct Subsidized Loans or Direct Unsubsidized Loans will be required to take the online Entrance Exam each year you are approved for a loan at Santa Monica College.

When do I go through entrance counseling?
You must complete entrance counseling before SMC can make the first disbursement of your loan.

How do I complete entrance counseling?
The loan specialist will tell you how to complete your entrance counseling. SMC may require in-person counseling, or you may be able to complete the counseling online.  If the loan specialist tells you to use www.studentloans.gov to complete entrance counseling, you should expect it to take you about 30 minutes.

To take out a loan from the William D. Ford Federal Direct Loan Program, you must complete a Master Promissory Note (MPN).
Your MPN explains the terms of your loan, so you should keep it for your records.
There are two types of MPNs in the Direct Loan Program: one for Direct Subsidized and/or Direct Unsubsidized Loans (for students) and one for Direct PLUS Loans (for parents or for graduate or professional students). 

What is a Master Promissory Note?
The Master Promissory Note (MPN) is a legal document in which you promise to repay your loan(s) and any accrued interest and fees to the U.S. Department of Education. It also explains the terms and conditions of your loan(s); for instance, it will include information on how interest is calculated and what deferment and cancellation provisions are available to you. 

Unless SMC school does not allow more than one loan to be made under the same MPN or you obtain an endorser when borrowing a Direct PLUS Loan, you can take out additional Direct Loans on a single MPN for
up to 10 years.

It’s important to understand what you’re signing. For instance, the MPN states the following:

  • You must repay your loan even if you don’t complete your education.
  • You must repay your loan even if you can’t get a job after you leave school.
  • You must repay your loan even if you didn’t like the education you received.

Before—or at the time of—the first disbursement (payment to you or on your behalf) of your loan(s), you'll receive a disclosure statement that gives you information about any loan that the school plans to disburse under your MPN, including the loan amount, fees, and the expected disbursement dates and amounts.

When do I sign my MPN?
You must sign your MPN before you receive your loan funds.  
If you are a student taking out a Direct Subsidized Loan or a Direct Unsubsidized Loan, you must sign an MPN under any of the following circumstances:

  • You have never signed a Direct Subsidized or Unsubsidized Loan MPN.
  • Your school requires you to sign a new MPN each academic year.
  • You signed an MPN more than one year ago, but no loan was disbursed.
  • You signed an MPN more than 10 years ago.

If you are a graduate or professional student or the parent of a dependent undergraduate student and are taking out a Direct PLUS Loan, you must sign a Direct PLUS Loan MPN under any of the following circumstances:

  • You have never signed a Direct PLUS Loan MPN.
  • The school requires you to sign a new MPN each academic year. (Most schools don’t require a new MPN each academic year.)
  • You signed an MPN more than one year ago, but no loan was disbursed.
  • You signed an MPN more than 10 years ago.
  • You obtained an endorser due to an adverse credit history.

    Note: Parent borrowers must complete and sign a separate MPN for each student for whom they are borrowing.

How do I sign an MPN?
You will be directed to go to www.studentloans.gov to sign the online MPN. To complete an MPN online, you will need your Federal Student Aid PIN. If you are a parent completing a Direct PLUS Loan MPN online, you must use your own PIN and not your child's PIN. 

The entire MPN process must be completed in a single session, so be sure you have enough time before you start. Each MPN takes approximately 30 minutes to complete.

The MPN process consists of four steps:

1.      Enter your personal and school information.

2.      Enter information about your references (people who have known you for at least three years).

3.      Read the terms and conditions.

4.      Review, electronically sign, and submit the MPN.


EXIT COUNSELING
Federal regulations require students who have borrowed a Federal Stafford Loan and are graduating, leaving school, or dropping below half-time to complete an exit counseling session.

What is Exit Counseling?

Borrowers review the terms of the loan, borrower rights and responsibilities, and the consequences of default and provides useful tips and information to help you manage your loans.

Who has to complete Exit Counseling?
All students who have taken out Direct Subsidized Loans or Direct Unsubsidized Loans
graduates or otherwise ceases enrollment, Direct Loan Exit Counseling is required.

How do I complete Exit Counseling?
Exit counseling may be completed by navigating to www.studentloans.gov, clicking "Exit Counseling" under "Tools and Resources", then clicking "Exit Counseling" once again.

The counseling session will cover the following federal student loan types:
William D. Ford Direct Loan (Direct Loan) Program loans
  • Direct Subsidized Loans
  • Direct Unsubsidized Loans
Federal Family Education Loan (FFEL) Program loans
  • Subsidized Federal Stafford Loans
  • Unsubsidized Federal Stafford Loans