Every month, HESC’s “Question and Answer” Web feature includes an interesting question presented to the Office of Counsel and Regulatory Compliance staff.

This month’s winning question was received from a school:

An undergraduate student had previously obtained a Federal Direct student loan while attending another institution. They have now applied for their first FFELP Stafford loan at our school. Must the student undergo entrance loan counseling at our school before they can receive their first disbursement?


No. The main federal loan for students is called the Stafford loan and has two variations; Federal Family Education Loan Program (FFELP) and the Federal Direct Student Loan Program (FDSLP).

Federal regulations (Sect. 682.604(f)(1)) require a school to conduct entrance counseling with each student borrower who’s obtaining their first Stafford loan for attendance at that school, unless the student previously received a Stafford, SLS, or Federal Direct Stafford loan for attendance at another school.

Since the student previously received a FDSLP loan, the school would not be required to provide entrance loan counseling for this student.

* Please note, if a student is applying for a Graduate or Professional Student PLUS Loan, initial loan counseling must be conducted if the student has not borrowed a PLUS loan in the past – even if they have received a prior Federal Stafford or Federal Direct Stafford Loan.

Direct questions regarding this guidance to the Office of Counsel and Regulatory Compliance at 518- 473-3986; or toll-free at 1-866-431-HESC (1-866-431-4372), press 6; or via email at askpolicy@hesc.org

Date posted 10/8/08