Should You Hire A Student Loan Advisor To Help You Pay Back?
Updated October 2, 2020
Note that the student loan situation has changed due to the impact of the coronavirus outbreak and the relief efforts of the government, student loan lenders and others. Check out our Student Loans Hero Coronavirus Information Center for news and additional details.
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A student loan consultant is a certified industry expert who can help borrowers strategize or optimize their student loan repayment, solving everything from delinquency to consolidation.
Whether to hire one of these financial advisors or student loan companies is less clear. To learn more about student loan counselors, let’s look at …
What a student loan repayment advisor does
Understanding how a professional can help you is not so clear when it comes to a student loan. But a consultant in this field can offer many services, including:
- Recommend student loan repayment strategies
- Offer personalized advice based on your personal financial situation
- To explain student loan jargon in a way that you can understand
- Give recommendations on what to do if there are changes in your lifestyle
- Save time researching your loan details and calling lenders on your behalf
Some credit counseling companies – some of them non-profit organizations offering free advice on student loans – also offer specialist reimbursement advice. Like an independent student loan financial advisor, these organizations can look at your overall financial situation, including whether you have other types of debt as well, to suggest how to approach a repayment plan. .
A student loan consultant might specialize in helping borrowers in your career field
For example, it’s not uncommon for medical residents to work more than 80 hours a week – unusual schedules and a stressful work environment make it nearly impossible to call their loan officers and research their best repayment plans.
PGPresents is an example of an independent student loan consultancy that works with medical students and non-medical graduates who have significant student loan debt and little free time to negotiate student loan repayment plans.
For a student loan financial advisor who specializes in helping borrowers in your industry, ask your employer or professional association or network for a referral.
Student loan consultant fees
A student loan counselor can charge between $ 175 and $ 495 for a phone call with a monthly or annual subscription. So, is the cost worth it?
Well, student loans are designed so that you can meet your repayment needs without such personalized assistance. If, however, you are the type of person who needs a second opinion or is far too busy to research all of your options on your own, a student loan financial advisor might be the best choice for you.
Also remember that the goal is to pay off your student loans as quickly as possible, by minimizing the amount of interest you have to pay over time – or by finding a student loan forgiveness program which will clear your debt for you. If paying a consultant to help you means you can accomplish it, it’s probably a good choice. If you can save money by doing it yourself using free information and tools, even better.
Whatever you choose, the important thing is to make repayment of the loan a priority.
Alternatives to a student loan advisor
While there are many student loan financial advisors with varying fees, there are also many free resources available to help borrowers learn about the different types of repayment options and determine which one is best for you.
| Your school or your employer | Your financial aid office or human resources department can at least point you in the right direction when it comes to student loan support. |
| Your lender or loan manager | While their advice may not be 100% objective, lenders and loan managers are the experts in the support programs they offer. Just be sure to get a second opinion on other options as well. |
| Department of Education | The government financial aid website is full of tools and simple answers to questions about all of your federal loans. You can find out how to change your repayment plan, what to do if you can’t temporarily pay off your loans, and how to qualify for a forgiveness program. The Federal Student Aid Ombudsman Group (FSA) may also act impartially to resolve issues between you and your loan officer. |
| Online calculators | Websites such as Student Loan Hero provide calculators to help you answer almost any question you may have about your student loans. If you are wondering if you need to refinance your student loans, for example, an easy-to-use calculator is available to run the numbers for you. |
| Certified credit and student loan counselors | Whether it’s in a nonprofit like American Consumer Credit Counseling (ACC) or elsewhere, credit counselors can help you manage your debt for a fee or a small fee. For the same reason, you might not pay a student loan advisor, however, beware of cash for student loan advice. And for more serious repayment problems, you may need a student loan lawyer. |
Be smart when hiring a student loan financial advisor
While a student loan advisor can help you get rid of or get out of debt, it’s important to remember that this is a relatively new type of financial professional.
As with any new unregulated industry, some “professionals” will try to abuse the system, so consumers should always exercise caution. For example, one of the largest student loan financial advisory firms, GL Capital Partners, made the news in 2015 when it was shut down and its CEO was arrested for fraud.
You should also be wary of a self-described student loan consultant promising to file documents (like with a direct consolidation loan) that you could handle on your own and without opening your wallet.
To avoid student loan scams, ask student loan consultants for their certification information. Reputable certificates are awarded by the National Association of Certified Credit Counselors (NACCC) and the CSLA Institute for Student Loan Advocacy, among other organizations.
While fraudulent behavior is certainly not representative of the student loan financial advisory industry as a whole, it does reinforce the importance of shopping around, reading reviews, and researching references before working with a loan consultant. students, if you choose this route.
Start with the free options available to you before trying a student loan advisor to avoid any issues and pay more than you need to. In fact, review all people talking about student loans with know-how.
André Pentis contributed to this report.
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