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Originally published Jan. 30, 2019.
Although student loan counseling isn’t necessary for most borrowers, there are times when it can help. If you’re really struggling to manage your student loans on your own, it could be worth hiring a student loan counselor to help you sort things out.
This report will look at five ways a student loan counselor can help you come up with a plan to conquer your education debt, and discuss how to decide whether you need a counselor in the first place.
- How much student loan counselors charge
- 5 ways student loan counseling can help
- Where to find a student loan counselor
- How to decide if you need a student loan counselor
The cost of student loan counseling varies, but you can expect to pay somewhere between $50 and $100 for an initial session with a nonprofit student loan counselor.
Nonprofit organization GreenPath, for instance, charges $50 for a session with a student loan counselor, who will go over your repayment options and help you come up with a customized plan. If you want an in-depth analysis of your student loan situation, you can sign up for its enhanced support plan for $200.
Clearpoint, another nonprofit organization, charges $99 for student loan counseling, as well as a one-time fee that varies by state. While most student loan counselors work for nonprofit organizations, you may also find for-profit student loan counseling.
For-profit counseling will likely cost more, however. The Student Loan Planner, for instance, charges between $395 and $595 for student loan counseling, depending on the amount of debt you carry.
Make sure you understand exactly what the costs will be before signing up for student loan counseling.
Although they treat clients as individuals facing unique repayment challenges, counselors typically use the same formula. I know because I’m a student loan counselor myself.
Unlike your federal student loan entrance or exit counselor, a student loan counselor is typically a certified individual working for themselves or at a nonprofit or private company. They don’t need to be expensive though — by looking around, you can usually avoid exorbitant fees for financial professionals like counselors unless you prefer spiffy concierge-level service.
Aside from the cost, here’s what to expect if you decide to sit down with a counselor for a consultation on your repayment.
1. Determine the status of your loan repayment
2. Examine your repayment challenges and goals
3. Explore possible solutions for your repayment
4. Set a loan repayment action plan
5. Keep tabs on your loan repayment progress
Your counselor will aim to build a rapport with you, but they’ll simultaneously be looking to learn about your debt situation. You should expect a multitude of questions about your loans, income, employment and tax-filing status. This information is necessary to develop an action plan for repayment.
You might not have all this information off the top of your head, or even know how to find it. Although a counselor has no special, private portals to access, they know where to get your info quickly and easily.
To start, they’ll help you use the Federal Student Aid website to catch up on your federal loans, as well as checking up on your private loans via your credit report.
When you take part in student loan counseling, you’ll need to provide the following information:
- Loan program: Direct Loan, Perkins Loan or Federal Family Education Loan (FFEL)
- Loan status: Grace period, active repayment, delinquency or in default
- Borrower type: Student or parent
- Disbursement date: When you borrowed your loans
Each of these data points – plus basics like your servicer, monthly payments and remaining balance – could affect your eligibility for repayment strategies, such as switching repayment plans.
During this second stage of the student loan counseling process, a counselor might prove their worth as an objective party that’s able to take a hard look at your repayment problems. You might not feel up to the task yourself, or that your lender or loan servicer has neither the time nor interest to mull over your situation.
A counselor would help you identify why your repayment isn’t going the way it could, whether that’s because of a debt collector breathing down your neck or money issues specific to your situation. If your loans are a strain on your finances, for example, the counselor might review your budget.
Once you’ve identified the challenges together, the counselor could explain your range of opportunities. If you didn’t find room in that budget to make consistent loan payments, the counselor might explain the value of switching to an income-driven repayment (IDR) plan.
Now that you know your problems can be solved, your counselor will likely lead a goal-setting session. They’ll ask what you want out of your repayment, whether it’s making your repayment more affordable, putting a finish line on your debt, or something in between.
Before working toward your loan repayment goals, you and your counselor would review your best ways to achieve them. Depending on your loan status, you might only have two or three options at your disposal. Prepare to evaluate these approaches in exhaustive detail, comparing their pros and cons.
For many borrowers, these options include:
- Forgiveness and cancellation: There are many ways to receive a partial or full forgiveness of your loan balance, including debt forgiveness based on your health, career, school or other factors.
- Switching repayment plans: Transitioning your federal loans from their standard, 10-year term to an IDR plan, for example, would limit your monthly dues to a percentage of your discretionary income.
- Deferment and forbearance: Applying to pause your loan payments because of eligible causes, such as a job loss or military service, could give you the break you need before resuming payments.
- Rehabilitation: If your federal loans are in default, you could rehabilitate them with nine straight payments of a lower, agreed-upon amount to remove derogatory marks from your credit report.
- Consolidation: You could group your federal loans into a direct consolidation loan to get out of default or simplify your repayment going forward.
- Student loan refinancing: If you’ve handled your federal and private loan repayment well to this point, you might qualify to consolidate your debt – and potentially lower your interest rate – with a private lender seeking creditworthy candidates.
Keep in mind that none of your specific repayment options are likely to be perfect or immediate solutions to your education debt. A good counselor should temper your expectations by explaining what each option could deliver, and at what cost. An IDR plan, for example, lowers your monthly payments but increases the total cost of your loan due to mounting interest.
Hopefully, you and your counselor will agree on a specific solution for your repayment problem. Although the onus will be on you as the borrower to execute it, your counselor should provide you with a written action plan to serve as the map for your journey.
If, for instance, you’ve decided that switching to Income-Based Repayment, a type of IDR plan, is in your best interest, the plan should detail:
- What information you need to apply for Income-Based Repayment, such as your gross monthly income
- How to submit an IDR plan request via StudentLoans.gov
- What next steps you need to complete once your servicer has accepted your plan request
- How a revised budget or spending plan ensures you can afford your monthly payment
The document should also list your new estimated monthly payment, payoff date and total loan cost.
If the counselor is genuinely working to help you achieve your goals, that should be reflected in the plan. If it isn’t, remember that the counselor works for you. Ask them to head back to the drawing board.
Like anyone who assists your student loan repayment, they’re doing just that – assisting. You wouldn’t count on your counselor to take every step of your repayment for you.
However, you should be able to rely on a counselor to check in and follow up on your progress. You might even call upon them to assist further, such as in the case that your loan servicer has unfairly denied your request to switch repayment plans.
Good counselors don’t end the relationship when their client walks out the door or hangs up the phone. Instead, it should continue until you’re completely done with your debt.
When searching for a nonprofit student loan counselor, we recommend sticking with agencies that are either…
- …affiliated with the National Foundation for Credit Counseling (NFCC) or the Financial Counseling Association of America, or
- …accredited through a reputable organization, such as the Council on Accreditation
NFCC, a leading nonprofit financial counseling organization, offers this tool to help you find an affiliated agency in your local area. Both GreenPath and Clearpoint, for example, are NFCC-affiliated nonprofits that offer student loan counseling.
Once you’ve chosen an agency, you might also look on consumer review sites such as the Better Business Bureau to find out what customers have to say about its services.
Before choosing a counselor, you can also ask about their qualifications, experience and approach to working with borrowers to make sure they’d be a good fit for you.
As mentioned, there are also options for for-profit student loan counseling from private companies. Although this counseling could be useful, it will likely cost more than its nonprofit counterpart.
If you go this route, make sure to check the counselor’s qualifications (e.g., a certification as a student loan counselor or certified financial planner) before signing up.
Financial experts’ advice on student loans shouldn’t be ignored, but one-on-one consultations aren’t necessary for every borrower.
You could work your way through the five steps above using free, accessible online sources, including Student Loan Hero’s student loan calculators. On the other hand, you could find that a certified been-there-and-done-that pro could get you the answers you need without as much effort or frustration.
Whether or not you plan to work with a pro-bono counselor, or even to hire a private one, consider all the people with helpful advice on repayment. Sometimes it’s good to have some extra assistance to push you to the debt-free finish line.
Rebecca Safier contributed to this report.
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|Lender||Variable APR||Eligible Degrees|
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|1.89% – 5.90%4||Undergrad & Graduate|
|1.74% – 7.99%5||Undergrad & Graduate|
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1 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 May 4, 2022.
2 Rate range above includes optional 0.25% Auto Pay discount. Important Disclosures for Earnest.
Student Loan Refinance Interest Rate Disclosure Actual rate and available repayment terms will vary based on your income. Fixed rates range from 2.99% APR to 8.24% APR (excludes 0.25% Auto Pay discount). Variable rates range from 1.99% APR to 8.24% APR (excludes 0.25% Auto Pay discount). Earnest variable interest rate student loan refinance loans are based on a publicly available index, the 30-day Average Secured Overnight Financing Rate (SOFR) published by the Federal Reserve Bank of New York. The variable rate is based on the rate published on the 25th day, or the next business day, of the preceding calendar month, rounded to the nearest hundredth of a percent. The rate will not increase more than once per month. The maximum rate for your loan is 8.95% if your loan term is 10 years or less. For loan terms of more than 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%. Please note, we are not able to offer variable rate loans in AK, IL, MN, NH, OH, TN, and TX. Let us know if you have any questions and feel free to reach out directly to our team.
3 Important Disclosures for SoFi.
Fixed rates range from 3.49% APR to 7.99% APR with a 0.25% autopay discount. Variable rates from 1.74% APR to 7.99% APR with a 0.25% autopay discount. Unless required to be lower to comply with applicable law, Variable Interest rates on 5-, 7-, and 10-year terms are capped at 8.95% APR; 15- and 20-year terms are capped at 9.95% APR. Your actual rate will be within the range of rates listed above and will depend on the term you select, evaluation of your creditworthiness, income, presence of a co-signer and a variety of other factors. Lowest rates reserved for the most creditworthy borrowers. For the SoFi variable-rate product, the variable interest rate for a given month is derived by adding a margin to the 30-day average SOFR index, published two business days preceding such calendar month, rounded up to the nearest one hundredth of one percent (0.01% or 0.0001). APRs for variable-rate loans may increase after origination if the SOFR index increases. The SoFi 0.25% autopay interest rate reduction requires you to agree to make monthly principal and interest payments by an automatic monthly deduction from a savings or checking account. This benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account. The benefit lowers your interest rate but does not change the amount of your monthly payment. This benefit is suspended during periods of deferment and forbearance. Autopay is not required to receive a loan from SoFi.
4 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 April 29, 2021. Information and rates are subject to change without notice.
5 Important Disclosures for Navient.
6 Important Disclosures for LendKey.
Refinancing via LendKey.com is only available for applicants with qualified private education loans from an eligible institution. Loans that were used for exam preparation classes, including, but not limited to, loans for LSAT, MCAT, GMAT, and GRE preparation, are not eligible for refinancing with a lender via LendKey.com. If you currently have any of these exam preparation loans, you should not include them in an application to refinance your student loans on this website. Applicants must be either U.S. citizens or Permanent Residents in an eligible state to qualify for a loan. Certain membership requirements (including the opening of a share account and any applicable association fees in connection with membership) may apply in the event that an applicant wishes to accept a loan offer from a credit union lender. Lenders participating on LendKey.com reserve the right to modify or discontinue the products, terms, and benefits offered on this website at any time without notice. LendKey Technologies, Inc. is not affiliated with, nor does it endorse, any educational institution.
Subject to floor rate and may require the automatic payments be made from a checking or savings account with the lender. The rate reduction will be removed and the rate will be increased by 0.25% upon any cancellation or failed collection attempt of the automatic payment and will be suspended during any period of deferment or forbearance. As a result, during the forbearance or suspension period, and/or if the automatic payment is canceled, any increase will take the form of higher payments. The lowest advertised variable APR is only available for loan terms of 5 years and is reserved for applicants with FICO scores of at least 810.
As of 5/17/2022 student loan refinancing rates range from 2.05% APR – 5.25% Variable APR with AutoPay and 2.49% APR – 7.93% Fixed APR with AutoPay.
7 Important Disclosures for PenFed.
Fixed Rate Loan Terms: 5 years/60 monthly payments, 8 years/96 monthly payments, 12 years/144 monthly payments or 15 years/180 monthly payments. Annual Percentage Rate is the cost of credit calculating the interest rate, loan amount, repayment term and the timing of payments. Fixed rates range from 3.29% to 5.43% APR. Rates are subject to change without notice. Fixed APR: Fixed rates will not change during the term. This rate is expressed as an APR. Since there are no fees associated with this loan offer, the APR is the same percentage as the actual interest rate of the loan. These rates are subject to additional terms and conditions, and rates are subject to change at any time without notice. Such changes will only apply to applications taken after the effective date of change.
8 Important Disclosures for Citizens.
Education Refinance Loan Rate Disclosure: Variable interest rates range from 1.99%-8.38% (1.99%-8.38% APR). Fixed interest rates range from 2.99%-8.63% (2.99%-8.63% APR).
IS Variable Rate Disclosure: Variable Rates advertised are based on the one-month London Interbank Offered Rate (“LIBOR”) published in The Wall Street Journal on the twenty-fifth day, or the next business day, of the preceding calendar month. As of December 1, 2021, the one-month LIBOR rate is 0.09%. Variable interest rates will fluctuate over the term of the loan with changes in the LIBOR rate, and will vary based on applicable terms, level of degree and presence of a co-signer. Your final variable rate may be based upon the 30-day average SOFR index, as published by the Federal Reserve Bank of New York. The maximum variable rate is the greater of 21.00% or Prime Rate plus 9.00%.
ERL Variable Rate Disclosure: Variable interest rates are based on the 30-day average Secured Overnight Financing Rate (“SOFR”) index, as published by the Federal Reserve Bank of New York. As of May 1, 2022, the 30-day average SOFR index is 0.29%. Variable interest rates will fluctuate over the term of the loan with changes in the SOFR index, and will vary based on applicable terms, level of degree and presence of a co-signer. The maximum variable interest rate is the greater of 21.00% or the prime rate plus 9.00%.
Fixed Rate Disclosure: Fixed rate ranges are based on applicable terms, level of degree, and presence of a co-signer.
Lowest Rate Disclosure: Lowest rates are only available for the most creditworthy applicants, require a 5-year repayment term, immediate repayment, a graduate or medical degree (where applicable), and include our Loyalty and Automatic Payment discounts of 0.25 percentage points each, as outlined in the Loyalty Discount and Automatic Payment Discount disclosures. Rates are subject to additional terms and conditions, and are subject to change at any time without notice. Such changes will only apply to applications taken after the effective date of change.
Federal Loan vs. Private Loan Benefits: Some federal student loans include unique benefits that the borrower may not receive with a private student loan, some of which we do not offer. Borrowers should carefully review federal benefits, especially if they work in public service, are in the military, are considering possible loan forgiveness options, are currently on or considering income based repayment options or are concerned about a steady source of future income and would want to lower their payments at some time in the future. When the borrower refinances, they waive any current and potential future benefits of their federal loans. For more information about federal student loan benefits and federal loan consolidation, visit http://studentaid.ed.gov/. We also have several resources available to help the borrower make a decision on our website including Should I Refinance My Student Loans? and our FAQs. Should I Refinance My Student Loans? includes a comparison of federal and private student loan benefits that we encourage the borrower to review.