When you’re facing a mountain of debt after graduation, paying for one-on-one advice from a student loan counselor could give you both guidance and peace of mind. But it may not be necessary. You can find many free resources online to help you manage on your own. And you may need to weed through untrustworthy fee-based student loan counseling options on your way to finding reliable information.
Here are five reasons you may not need to pay for student loan counseling, and how to get free or low-cost expert advice instead.
Reasons not to pay for student loan counseling
1. Some student loan counseling services are scams
2. A wealth of expert advice is available for free online
3. Student loan calculators can help you understand your debt
4. Free tools collect your debts in one place
5. Your student loan servicer can help – for free
Explore options before you pay for a student loan counselor
As the student loan debt crisis grows in the U.S., so does the number of student loan counseling scams. These predatory services target vulnerable borrowers with false promises that they can help you pay down your loans faster or cheaper – or get them completely forgiven.
Although legitimate loan forgiveness and assistance programs do exist, none can offer immediate loan cancellation. If any program claims to do that, it’s a scam. You could get loans forgiven, though, if you’re eligible. You’ll typically need to work for years before qualifying for a program such as Public Service Loan Forgiveness, which requires applicants to have made at least 120 qualifying federal loan payments while working in an eligible government or nonprofit job.
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 upfront fees, or share personal details such as your Social Security number or Federal Student Aid (FSA) ID.
Unfortunately, there are scammers posing as student loan counselors, and their offers can be tempting. If a service seems sketchy, however, walk away and seek out one of the options below.
Although student loan counseling services can help you navigate your loans, the knowledge they share isn’t exclusive. In fact, you can find lots of unbiased, expert advice on student loan management online for free.
If you have federal student loans, the FSA website is a good place to start. It details various student loan repayment plans and forgiveness programs, including how to qualify and apply for them.
You already should have some knowledge of how the student loan borrowing and repayment processes work. That’s because most federal student loan borrowers must complete official entrance and exit counseling sessions as part of the borrowing process. The government offers the entrance and exit counseling for free online, or your school might require you to complete them in-person – which is also be free. You learn crucial information about how much you owe and how to pay it back, which can eliminate the need to pay for additional counseling services after your graduate.
You can also use independent online sources for financial advice. Student Loan Hero and the nonprofits American Student Assistance and Student Debt Crisis, for instance, provide thorough and up-to-date advice on student loan repayment options.
Online student loan calculators are another excellent resource for borrowers. These free calculators can help you better manage your loans and figure out how much you’ll pay each month.
For example, the FSA’s Repayment Estimator can help you calculate your monthly payment (you’ll need to log in first to see your personal federal loan information). This online tool also allows you to view alternate repayment options to see how long you’ll make payments and how much you’ll spend on interest. That can help you decide if an income-driven repayment plan, which limits monthly payments to a percentage of your discretionary income, is a worthwhile option.
If you can afford to pay extra toward loans, a student loan prepayment calculator can show how much you’ll save in interest when making additional payments regularly.
If you have loans from multiple sources, it can be easy to lose track of your bills and miss a student loan payment.
A student loan counselor can help you track down and organize your loans, but you can do this without paying for student loan counseling first.
Access your loan balances and other details on your servicers’ websites or by calling their customer service numbers. If you’re not sure which servicers manage your loans, check your free credit report on AnnualCreditReport.com or use the National Student Loan Data System (NSLDS) for your federal student loans. Once you’ve found your loans, write down each loan balance, its repayment term, the monthly bill amount and payment due date – and figure out a way to keep track regularly and organize your payments.
Your loan comes with a built-in counselor: your student loan servicer. If you’re struggling to pay private loans, call your servicer and ask about your options. If you have federal loans, your first step is StudentAid.gov/repay.
For example, you may decide to apply for an income-driven repayment plan or use forbearance or deferment to postpone federal loan payments. Your servicer can help you accomplish these goals for free.
If you have private loans, you may find that some private lenders also offer flexible repayment options. Reach out to the company that collects your loan payments to explore ways to postpone or lower the monthly payments.
It’s important to advocate for yourself and ensure that any advice your servicer provides is in your best interest. Navient, a federal student loan servicer, faces multiple lawsuits alleging the company didn’t steer borrowers into the lowest-cost repayment plans possible. Use additional resources, like government websites, to double-check the guidance you receive.
Some borrowers can benefit from nonprofit student loan counseling. At times, student debt can get so overwhelming that a sympathetic ear is necessary to show the way forward. If you have an especially complicated situation, you also may need to speak to an expert.
Before you pay for a student loan counselor, however, make sure the counselor you choose is reputable. The nonprofit National Foundation for Credit Counseling’s StudentLoanHelp.org resource can connect you with free or low-cost student loan counseling that’s personalized for you.
If you’re already facing student debt payments, the last thing you need is a pricey bill from a loan counselor. Plenty of resources are out there that can help you – for free.
Marty Minchin contributed to this report.
Interested in refinancing student loans?Here are the top 6 lenders of 2020!
|Lender||Variable APR||Eligible Degrees|
|1.99% – 5.64%1||Undergrad & Graduate|
|1.89% – 5.90%2||Undergrad & Graduate|
|2.25% – 6.09%3||Undergrad & Graduate|
|1.89% – 6.77%4||Undergrad & Graduate|
|2.39% – 6.01%||Undergrad |
|1.99% – 5.41%5||Undergrad & Graduate|
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1 Important Disclosures for Earnest.
To qualify, you must be a U.S. citizen or possess a 10-year (non-conditional) Permanent Resident Card, reside in a state Earnest lends in, and satisfy our minimum eligibility criteria. You may find more information on loan eligibility here: https://www.earnest.com/eligibility. Not all applicants will be approved for a loan, and not all applicants will qualify for the lowest rate. Approval and interest rate depend on the review of a complete application.
Earnest fixed rate loan rates range from 2.98% APR (with Auto Pay) to 5.79% APR (with Auto Pay). Variable rate loan rates range from 1.99% APR (with Auto Pay) to 5.64% APR (with Auto Pay). For variable rate loans, although the interest rate will vary after you are approved, the interest rate will never exceed 8.95% for loan terms 10 years or less. For loan terms of 10 years to 15 years, the interest rate will never exceed 9.95%. For loan terms over 15 years, the interest rate will never exceed 11.95% (the maximum rates for these loans). Earnest variable interest rate loans are based on a publicly available index, the one month London Interbank Offered Rate (LIBOR). Your rate will be calculated each month by adding a margin between 1.82% and 5.50% to the one month LIBOR. The rate will not increase more than once per month. Earnest rate ranges are current as of July 31, 2020, and are subject to change based on market conditions and borrower eligibility.
Auto Pay discount: If you make monthly principal and interest payments by an automatic, monthly deduction from a savings or checking account, your rate will be reduced by one quarter of one percent (0.25%) for so long as you continue to make automatic, electronic monthly payments. This benefit is suspended during periods of deferment and forbearance.
The information provided on this page is updated as of 7/31/2020. Earnest reserves the right to change, pause, or terminate product offerings at any time without notice. Earnest loans are originated by Earnest Operations LLC. California Finance Lender License 6054788. NMLS # 1204917. Earnest Operations LLC is located at 302 2nd Street, Suite 401N, San Francisco, CA 94107. Terms and Conditions apply. Visit https://www.earnest.com/terms-of-service, email us at [email protected], or call 888-601-2801 for more information on our student loan refinance product.
© 2020 Earnest LLC. All rights reserved. Earnest LLC and its subsidiaries, including Earnest Operations LLC, are not sponsored by or agencies of the United States of America.
2 Important Disclosures for Laurel Road.
Laurel Road Disclosures
All credit products are subject to credit approval.
Laurel Road began originating student loans in 2013 and has since helped thousands of professionals with undergraduate and postgraduate degrees consolidate and refinance more than $4 billion in federal and private school loans. Laurel Road also offers a suite of online graduate school loan products and personal loans that help simplify lending through customized technology and personalized service. In April 2019, Laurel Road was acquired by KeyBank, one of the nation’s largest bank-based financial services companies. Laurel Road is a brand of KeyBank National Association offering online lending products in all 50 U.S. states, Washington, D.C., and Puerto Rico. All loans are provided by KeyBank National Association, a nationally chartered bank. Member FDIC. For more information, visit www.laurelroad.com.
As used throughout these Terms & Conditions, the term “Lender” refers to KeyBank National Association and its affiliates, agents, guaranty insurers, investors, assigns, and successors in interest.
Assumptions: Repayment examples above assume a loan amount of $10,000 with repayment beginning immediately following disbursement. Repayment examples do not include the 0.25% AutoPay Discount.
Annual Percentage Rate (“APR”): This term represents the actual cost of financing to the borrower over the life of the loan expressed as a yearly rate.
Interest Rate: A simple annual rate that is applied to an unpaid balance.
Variable Rates: The current index for variable rate loans is derived from the one-month London Interbank Offered Rate (“LIBOR”) and changes in the LIBOR index may cause your monthly payment to increase. Borrowers who take out a term of 5, 7, or 10 years will have a maximum interest rate of 9%, those who take out a 15 or 20-year variable loan will have a maximum interest rate of 10%.
KEYBANK NATIONAL ASSOCIATION RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE.
This information is current as of September 9, 2020. Information and rates are subject to change without notice.
3 Important Disclosures for SoFi.
4 Important Disclosures for Splash Financial.
Splash Financial Disclosures
Terms and Conditions apply. Splash reserves the right to modify or discontinue products and benefits at any time without notice. Rates and terms are also subject to change at any time without notice. Offers are subject to credit approval. To qualify, a borrower must be a U.S. citizen or permanent resident in an eligible state and meet applicable underwriting requirements. Not all borrowers receive the lowest rate. Lowest rates are reserved for the highest qualified borrowers. If approved, your actual rate will be within a range of rates and will depend on a variety of factors, including term of loan, a responsible financial history, income and other factors. Refinancing or consolidating private and federal student loans may not be the right decision for everyone. Federal loans carry special benefits not available for loans made through Splash Financial, for example, public service loan forgiveness and economic hardship programs, fee waivers and rebates on the principal, which may not be accessible to you after you refinance. The rates displayed may include a 0.25% autopay discount.
The information you provide to us is an inquiry to determine whether we or our lenders can make a loan offer that meets your needs. If we or any of our lending partners has an available loan offer for you, you will be invited to submit a loan application to the lender for its review. We do not guarantee that you will receive any loan offers or that your loan application will be approved. Offers are subject to credit approval and are available only to U.S. citizens or permanent residents who meet applicable underwriting requirements. Not all borrowers will receive the lowest rates, which are available to the most qualified borrowers. Participating lenders, rates and terms are subject to change at any time without notice.
To check the rates and terms you qualify for, Splash Financial conducts a soft credit pull that will not affect your credit score. However, if you choose a product and continue your application, the lender will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit pull and may affect your credit.
Splash Financial and our lending partners reserve the right to modify or discontinue products and benefits at any time without notice. To qualify, a borrower must be a U.S. citizen and meet our lending partner’s underwriting requirements. Lowest rates are reserved for the highest qualified borrowers. This information is current as of September 10, 2020.
5 Important Disclosures for CommonBond.
Offered terms are subject to change and state law restriction. Loans are offered by CommonBond Lending, LLC (NMLS # 1175900), NMLS Consumer Access. If you are approved for a loan, the interest rate offered will depend on your credit profile, your application, the loan term selected and will be within the ranges of rates shown. All Annual Percentage Rates (APRs) displayed assume borrowers enroll in auto pay and account for the 0.25% reduction in interest rate. All variable rates are based on a 1-month LIBOR assumption of 0.16% effective August 10, 2020.