If you’re not sure where to start when it comes to managing your student loans, that’s an understandable feeling. Americans now hold a record $1.5 trillion in student loans combined. For many people, educational loans are the biggest debt burden they’ll ever face, and the prospect of having to pay them off can seem overwhelming.
If your income is modest or your expenses are high, you may not know how you can afford to pay your loans at all or what options exist for reducing or pausing payments. Perhaps your finances have changed over time, and you’re wondering whether your current repayment plan still suits your needs.
Maybe you’re not sure whether to pay your loans down as aggressively as possible or spread your extra funds across other goals, such as saving for retirement or a home. Or maybe all the financial lingo is just difficult to understand. There’s no one solution to tackling student loan debt— the right plan looks different for each person.
Figuring this out can be hard on your own, but there are counselors that can help. Several different student loan counseling services exist that can help you understand your options and find the repayment strategy that’s right for you.
What Not to Do If You Need Student Loan Help
If you have questions about student loans, ignoring your uncertainty isn’t the answer, especially if that means falling behind on student loan payments. As it is, nearly 40% of borrowers who graduated in 2004 are expected to have defaulted on their loans by 2023.
Defaulting has serious consequences, since it is a major hit to your credit score, and student loans can’t be discharged in bankruptcy. Instead, regardless of your current situation, a solid plan can help you tackle your student loans in a way that fits your circumstances and goals.
When you’re ready to get help, be careful where you turn. There are shady companies out there offering advice and too-good-to-be-true solutions for eliminating your debt. Some of these student loan scams offer to discharge your loans or warn that you need to take advantage of a forgiveness program before they’re discontinued.
Many charge for services that are free if you have federal student loans and take action yourself. A little homework can prevent getting caught up in a scam. Below are some legitimate options for getting student loan counseling.
Student Loan Counseling Options
Federal Student Loan Counseling
Before federal loans are disbursed, the government requires borrowers to complete student loan entrance counseling to understand their rights and what’s expected of them. The process is automated and online, and it takes up to half an hour to complete.
Similarly, when students graduate or are enrolled less than half-time, they must complete exit counseling online. Don’t just do this to check the box. The student loan exit counseling is designed to help you establish a solid foundation for dealing with student loans.
The government contracts with several loan servicers to handle federal student loans. It should be relatively easy to get in touch with a servicer by phone, email, or even online chat. It’s in the companies’ best interest to make sure you make payments.
Their agents typically work with borrowers to help them understand their debt, figure out the best repayment plan, and process requests for deferment or forbearance. The quality of advice can vary, but this is a good first step for getting answers to questions or getting on track with repayment.
National Foundation for Credit Counseling
Founded in 1951, this is a nonprofit that offers financial counseling on various issues, including student loan debt. The group’s certified credit counselors work with people to help them understand the benefits and drawbacks of various student loan repayment plans, how to make payments affordable, whether consolidation makes sense for you, and how to reduce the overall interest you pay.
They can also discuss options for student loan forgiveness or rehabilitation, plus they take into account an individual’s entire financial situation, rather than looking at student loans in a vacuum. Counselors typically charge $50 to $200 per session and offer to provide a comprehensive plan for managing student debt.
American Student Assistance
This nonprofit offers online resources and complimentary advice to help students plan for student loan repayment. You can reach one of their counselors by phone, email, Twitter , or Facebook with questions about student debt or other money matters.
The group also has several centers in Massachusetts that offer in-person advice on managing student loans, as well as career planning and general personal finance.
This is a nonprofit agency that offers student loan counseling . Their counselors examine your overall financial situation and discuss the best way forward, including repayment plans, consolidation, or rehabilitation.
They say they may suggest a debt management program if you are also having difficulty with credit card debt. The service cost $50 and up, and the group says it will remove or reduce fees for clients with financial hardship.
GreenPath , another nonprofit, offers to review all your loans and provide “unbiased advice” and a customized plan based on your situation.
They also offer a higher tier of service if you want more in-depth analysis or if you want them to serve as your advocate by contacting the loan servicer on your behalf (though you are probably able to handle those communications on your own). The initial consultation is free, a counseling session is $50, and enhanced counseling costs $200.
Student Loan Help With SoFi
SoFi members get access to a licensed financial advisor as well as one-on-one career coaching at no extra cost. That means you can access complimentary advice on tackling your student loans, or potentially increasing your income, anytime. You become a member when you refinance your student loans with SoFi.
Depending on your situation, refinancing itself can help lower the monthly payments or interest rate on your loan. Refinancing isn’t for everyone since it means giving up access to federal programs such as deferment, forbearance, and income-based repayment.
But if refinancing is right for you, at SoFi it comes with a built-in human advisor, an easy-to-understand interface, and unemployment protection (if you lose your job and qualify for this protection, SoFi may pause your payments and a career coach can help you find a new position).
The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
Notice: SoFi refinance loans are private loans and do not have the same repayment options that the federal loan program offers such as Income Based Repayment or Income Contingent Repayment or PAYE. SoFi always recommends that you consult a qualified financial advisor to discuss what is best for your unique situation.
No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third party trademarks referenced herein are property of their respective owners.
The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.