Student loan counseling can be an important tool when it comes to addressing your finances and tackling debt. And with a vast array of options available, having confidence that you’re using the right service is key. Below, we’ve taken a look at how to find a counselor, so you can choose the best service for you!
Assess how serious your situation is
The first thing you’ll want to look at is the seriousness of your position. You may just be looking to spruce up your financial situation, but you may be struggling with debt that other student loan counseling hasn’t been able to cover. Understanding how in-depth of assistance you need will help you decide where to go for help.
Determine how much you’re willing to pay
The pool of student loan counseling services is wide, and their costs can vary. Some charge no fees, while others can be expensive (a private counseling session, for example, can cost hundreds of dollars). Depending on your circumstances, you may either want to opt for a free- or low-cost option, or you may decide it’s worth it to invest more money in counseling. Make sure you understand before signing on for a service what their cost is, and if you can afford it.
Free services:
- Federal government
- Only available for federal student loan applicants
- Loan servicers
- Only available through your own loan servicer
- National Foundation for Credit Counseling
- Some member agencies charge no fees
Paid services:
- Clearpoint
- After a free consultation, their full student loan counseling plan costs $99
- National Foundation for Credit Counseling
- Some member agencies charge small fees
- Private student loan counselors
- Student loan lawyers
Be aware of potential scams
Finally, be wary of potential scammers. In vetting prospective services, pay attention to what they’re promising and if it seems too good to be true. And never give out your personal information to a counselor who hasn’t been vetted. NerdWallet suggests these seven questions to ask a potential credit counselor:
- What are your qualifications? Ask if the organization is accredited through the National Foundation for Credit Counseling or the Council on Accreditation, or about the specific counselor’s experience and training.
- How can you help me reach my financial goals? Find out if the counselor’s specialization works for your situation.
- What do your services cost? Compare prices and understand what you’ll have to pay before signing up for a service.
- How do you provide your services? Consider how you would like to meet with your counselor (in person, over the phone, or online) and whether that format is available.
- How are these services funded? Knowing if the agency you’re talking to receives compensation from outside organizations will make you aware of any conflict of interest and increase transparency. On the other hand, according to NerdWallet, a nonprofit that has a relationship with creditors is “a win-win. Creditors benefit from having their customers pay back their debt, and this funding source in turn makes the services more affordable for consumers compared to alternative, for-profit agencies.”
- How will your services affect my credit score? While your credit score is likely to improve in the long run, it may be temporarily hurt if accounts are closed. Your counselor should be able to talk you through what to expect in the near and long term.
- How often will we work together? The length of the relationship varies by counselor, so find out beforehand how often you’ll meet and whether that’s enough time to help you reach your goals.
Paying off debt can be challenging, but there are resources to help! In understanding your situation and the type of situation you need, you’ll be better positioned to find an option that works for you.
