TG issues first report on efficacy of federal student loan counseling

Suggests revamp of design and policy changes

ROUND ROCK, TEXAS, Feb. 20, 2015 (GLOBE NEWSWIRE) -- TG, in consultation with the National Association of Student Financial Aid Administrators (NASFAA), has released the first of five reports on the efficacy of federal student loan counseling, "From Passive to Proactive: Understanding and Improving the Borrower Experience with Online Student Loan Exit Counseling." Drawing on student observations and interviews, TG's researchers suggest that a more engaging counseling experience for students would help promote responsible borrowing behavior and better prepare federal student loan borrowers for the repayment process.

"What we found is that the amount of information, particularly information that users see as irrelevant, superfluous, or unhelpful, drained most of their attention, focus and tolerance long before the end," explained Jeff Webster, assistant vice president of TG's research and analytical services.

The online exit counseling module was developed in compliance with the strict and extensive set of loan counseling statutes established by the Higher Education Act of 1965 (as amended). The law requires that federal student loan borrowers receive exit counseling when they graduate, leave school, or otherwise drop below half-time enrollment.

The report describes how borrower's beliefs combined with elements of the counseling module limit the effectiveness of the online experience. Many users perceived the information presented as excessively detailed and applied only to a subset of users, meaning many had to read information not relevant to their circumstances only to determine its irrelevance. Furthermore, even those who made a strong effort to remain engaged with the material did not feel that it was helping them create a plan of action. As one student put it, "There's so much information, but there's not a lot of counseling."

Some o f the key design and policy recommendations made in TG's report include:

  • Give U.S. Department of Education statutory flexibility to design more user-friendly modules
  • Incorporate skip logic or smart filtering based on information provided by the school, the National Student Loan Data System, and/or the borrower
  • Employ logical, narrative sequencing of information with dynamic navigation cues
  • Require intermediate counseling to stagger the information burden and promote learning
  • Explore incentives for robust, innovative counseling methods
  • Provide contextual information that outlines learning objectives, and describes the operational use of calculator tools

"It's time to rethink how loan counseling can better equip our student borrowers for a healthier financial future," said Webster. "Borrowers, colleges and universities, taxpayers, and anyone with a stake in the economy have at least some interest in students successfully repaying their loans."

TG's research team will publish additional reports related to student loan entrancing counseling, best practices and a historical overview in 2015. Information and links for all TG research publications can be found at

"NASFAA applauds TG's commitment to improving the student loan counseling experience for students," said NASFAA President & CEO Justin Draeger. "This work sheds an important light on how we can improve students' loan counseling experience. We look forward to continuing to collaborate with TG on this important and timely issue."

TG is a private, nonprofit corporation that promotes educational success to help millions of students and families realize their college and career dreams. TG provides critical support to schools, students, and borrowers at every stage of the federal student aid process — from providing information on how to pay for a higher education including financial aid options, to facilitating successful loan repayment after graduation.


Contact Data