There’s nothing a student loan counselor will tell you that you can’t learn on your own.
That may sound like a bold statement, but it’s true. There’s a wealth of information and resources online to help you manage your student loan debt.
That’s not to say student loan counseling is never helpful. If you’re facing a ton of debt, you might gain peace of mind from speaking one-on-one with an expert.
But most borrowers are fully capable of managing their student debt without a student loan counselor. Here are five important reasons you should think twice before paying for student loan counseling.
1. Some student loan counseling services are scams
As the student loan debt crisis in America continues to grow, student loan scams are popping up. These predatory services target vulnerable borrowers with false promises of loan forgiveness.
Although legitimate loan forgiveness and assistance programs do exist, none offer immediate loan cancellation. You’ll typically need to work for years before qualifying for a program such as Public Service Loan Forgiveness.
If a student loan counseling service is making promises that sound too good to be true, be wary. You should also back off if you feel pressured to sign up right away, pay significant up-front fees, or share personal details, like your Social Security Number.
Unfortunately, scammers are out there posing as student loan counselors. If a service seems sketchy, don’t waste your time or money.
2. A wealth of expert advice is available for free online
Although student loan counselors can help you navigate your student loans, they don’t have exclusive knowledge. In fact, you can find expert advice on student loan management online for free.
If you have federal student loans, the Office of Federal Student Aid (FSA) website is a good place to start. The FSA site details the various student loan repayment plans, plus it has information on forgiveness programs.
You can also use independent sources for financial advice. Student Loan Hero and non-profits American Student Assistance and Student Debt Crisis, for instance, are all committed to providing thorough and up-to-date advice.
If you’re looking for unbiased student loan advice, there’s an abundance of resources online. Instead of paying for a student loan counselor, you can learn everything you need to know on your own for free.
3. Student loan calculators can help you understand your debt
Student loan calculators are another excellent resource for borrowers. These free calculators help you better manage your loans.
For example, the FSA website has a “repayment estimator” for calculating your monthly payment. You can adjust your monthly payments to see how long you’ll pay and how much you’ll spend on interest.
If you can make extra payments, you can use a student loan prepayment calculator. It shows how much you’ll save in interest by making regular extra payments each month.
Alternatively, you can use an Income-Based Repayment (IBR) calculator to understand what your bills would look like under an IBR Plan. You’ll pay less each month and extend your terms to 20 or 25 years.
There are a wealth of online calculators that offer insight into your student loan situation. Instead of paying a student loan counselor to crunch the numbers, you can easily do so yourself.
4. Free tools could collect your debts in one place
Do you have loans in multiple places? It’s all too easy to miss a payment if you’ve lost track of your student loans.
A student loan counselor can help you gather your data in one place. But besides helping you get organized, the counselor isn’t doing anything you can’t do.
If you have more than one loan, track down your loans through your online accounts on your servicers’ websites or by calling their customer service numbers. If you’re not sure which servicers your loans are under, you can download your free credit report on AnnualCreditReport.com or use the National Student Loan Data System (NSLD).
Once you’ve found your loans, write down each loan amount, repayment term, monthly bills, and payment due dates.
The Student Loan Hero dashboard is one tool for collecting all your loans in one place. It gives you a bird’s eye view of all your loans at once. Plus, the dashboard shows what progress you’re making on each.
A student loan counselor can help you track your loans, but you can take this step without paying for student loan counseling first.
5. Your student loan servicer can explain your options
Finally, your student loan servicer is also a useful resource. If you’re struggling to pay your loans, call your servicer and ask about your options.
For instance, you may choose to put your federal loans into forbearance or deferment, or you could apply for an income-driven repayment plan. Your servicer can help you accomplish these goals for free.
Some private student loan servicers also offer flexible repayment options. CommonBond, for example, allows for temporary forbearance in the case of economic hardship.
That’s why you should cross-check any advice against a trusted source, whether it’s an official government website or a reliable finance blog.
Explore your options before you pay for a student loan counselor
Student loan counseling can be useful for some borrowers. Sometimes, student loans get so overwhelming that we need a sympathetic person to show us the path forward. If you have an especially complicated situation, you may benefit from speaking to an expert.
But before paying for a student loan counselor, explore your options. There’s a ton of free online resources to teach you how to manage your student loans.
If you’re still interested in student loan counseling, beware of any scams. Here are three red flags to watch out for when choosing a student loan counselor.
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