Should You Hire a Student Loan Consultant to Aid Your Repayment?

A student loan consultant is a certified industry expert who can help borrowers strategize or optimize their education debt repayment, troubleshooting anything from delinquency to consolidation.

Knowing whether to hire one of these student loan financial advisors or companies is less clear-cut. To learn more about student loan consultants, let’s look at…

What a student loan repayment consultant does

Understanding how a professional can help isn’t so clear-cut when it comes to the student loan business. But a consultant in this area can offer many services, including:

• Recommend student loan repayment strategies
• Offer personalized guidance based on your personal financial situation
• Explain student loan jargon in a way you can understand
• Give recommendations on what to do if there are changes to your lifestyle
• Save you time by researching your loan details and calling lenders on your behalf

Some credit counseling companies — some of them nonprofits providing free student loan advice — also offer specialized advice regarding repayment. Like an independent student loan financial advisor, these organizations can look at your entire financial picture, including whether you also have other types of debt, to provide suggestions on how to approach a repayment plan.

A student loan consultant might specialize in helping borrowers within your career field

For instance, it’s not uncommon for medical residents to work in excess of 80 hours per week — unusual schedules and a stressful work environment make calling their loan servicers and researching their best repayment plans nearly impossible.

PGPresents is an example of an independent student loan consulting firm that works with medical students and nonmedical school graduates who have significant student loan debt and little free time available to negotiate student loan repayment plans.

For a student loan financial advisor that specializes in helping borrowers in your industry, ask your employer or professional association or network for a referral.

Student loan consultant costs

A student loan consultant can charge anything from $175 to $495 for a phone call to a monthly or yearly membership. So, is the cost worth it?

Well, student loans are designed so that you can take care of 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 your options on your own, a student loan financial advisor might be the best bet for you.

Also, remember the goal is to pay back your student loans as quickly as possible, minimizing the amount of interest you have to pay over time — or finding a student loan forgiveness program that will wipe away your debt for you. If paying a consultant to help you means you can accomplish this, it’s probably a good choice. If you can save money going at it on your own with the assistance of free information and tools, even better.

Whichever you choose, the important part is that you’re making loan repayment a priority.

Alternatives to a student loan consultant

While there are many student loan financial advisors available with varying fees, there are also plenty of 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 may be able to at least point you in the right direction of student loan support.

Your lender or loan servicer

While their advice can’t possibly be 100% objective, lenders and loan servicers are the experts on the support programs they offer. Just be sure to seek a second opinion on other options too.

Department of Education

The government’s financial aid website is filled with tools and simple answers to questions about all of your federal loans. You can find out about how to switch your repayment plan, what to do if you temporarily can’t pay your loans and how to qualify for a forgiveness program. The Federal Student Aid (FSA) Ombudsman Group can also act impartially to solve issues between you and your loan servicer.

Online calculators

Websites such as LendingTree provide calculators to help you answer pretty much any question you might have about your student loans. If you’re wondering whether you should refinance your student loans, for example, there’s an easy-to-use calculator available to run the numbers for you.

Certified credit and student loan counselors

Whether at a nonprofit like American Consumer Credit Counseling (ACC) or elsewhere, credit counselors can help you manage your debt for a fee or low fee. For the same reason you might not pay a student loan consultant, however, be wary of forking over cash for student loan counseling. And for more serious repayment problems, you might need a student loan lawyer.

Be smart when hiring a student loan financial advisor

Although a student loan consultant can be helpful for keeping or helping you out of debt, it’s important to remember it’s a fairly new type of financial professional.

As with any new, unregulated industry, some “professionals” will attempt to abuse the system, which is why consumers should always use caution. For example, one of the largest student loan financial advising companies, GL Capital Partners, made 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 paperwork (such as for 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 information about certification. Reputable certs are awarded by the National Association of Certified Credit Counselors (NACCC) and the CSLA Institute For Student Loan Advocacy, among other organizations.

While scammy behavior is certainly not indicative of the student loan financial advising industry as a whole, it does reinforce the importance of shopping around, reading reviews and seeking referrals before working with any student loan consultant, if you choose that route.

Start with the free options available to you first before trying a student loan consultant to avoid any problems and not to pay more than necessary. In fact, review all the people who talk about student loans with expertise.