Financial advisors help their clients develop money management plans. Advisors can assist in making a realistic budget, planning for retirement, and more. But can a financial advisor help with student loans?
Financial advisors can guide clients dealing with student loan debt. Advisors may offer general advice as part of a more comprehensive financial planning strategy or specialize in aiding borrowers in certain professions, such as physicians or attorneys.
A financial advisor could help you make a realistic plan to repay your student loan debt. Understanding how to find the right advisor and what you might get in return for the fees you’ll pay is essential.
In this guide:
- Can a financial advisor help with student loans?
- Where to find a financial advisor to help with student loans
- Alternatives for student loan help
How can a financial advisor help with student loans?
Financial advisors can advise on several topics, including student loan debt and college planning.
Advisors may work with:
- Enrolled students
- Graduates
- Parents who take out federal PLUS Loans
- Parents or other adults who cosign private student loans on behalf of a child
Before working with a financial advisor, ensure you understand what it might cost. Many advisors offer a free initial consultation and only charge fees if you use their services. A typical financial advisor fee is 1% of assets under management (AUM), though some may charge hourly or flat rates.
Whether it makes sense to hire a financial advisor depends on what you need help with. For instance, you may seek out an advisor for the following:
- Creating a repayment plan
- Reconciling student loan default
- Navigating the loan application process if you’re still in school
>>Read more: Who can I talk to about student loans?
Financial advisor for student loans in repayment
Hiring a financial advisor could be to your advantage if you’re trying to repay student loan debt while balancing other financial goals. An advisor can review your repayment strategy and offer advice.
For instance, you might ask an advisor the following questions:
- Does it make sense to consolidate federal student loans?
- Is federal loan forgiveness a possibility? If so, does my current repayment plan allow for that?
- How would choosing an income-driven repayment plan for federal loans affect the total amount of debt repaid?
- How will taking a deferment or forbearance affect loan repayment? Does it matter if loans are Subsidized or Unsubsidized?
- I have multiple loans, federal and private. What is the most efficient order in which to pay them off?
- Would refinancing private student loans save any money?
- Is it wise to refinance private student loans to a shorter or longer term?
- What are the pros and cons of combining federal and private loans?
- Is it wise to start investing now or prioritize student loan repayment?
You might also talk to a financial advisor if you’re anticipating a significant life change and wonder how that may affect your ability to repay student loans. Getting married, for example, could mean more income to repay loans. However, you might multiply your debt obligations if your new spouse also has student loan debt.
Likewise, you may be concerned about how getting divorced would affect you if you cosigned private student loans for your spouse or they cosigned loans for you. Talking to your advisor and a divorce attorney can help you decide how to handle those debts fairly and equitably.
Meeting with an advisor who’s keeping a close eye on federal student loan initiatives could help. For example, President Biden’s student loan policies would provide federal loan forgiveness to eligible borrowers. An advisor who’s up to date on the latest student loan industry news could help you take advantage of new developments as they arise.
Financial advisor for delinquent or defaulted student loans
Falling behind on student loan payments isn’t ideal, but if it happens, an advisor could help you get back on track.
Issues an advisor may be able to help with include:
- Understanding federal student loan delinquency rules and when you’re considered in default on your loans.
- Minimizing the financial consequences of defaulting on federal loans, including damage to your credit scores, inability to secure new loans, wage garnishments, and tax refund offsets.
- Getting out of federal student loan default and restoring eligibility for federal student loans.
- Understanding private student loan default and your options to bring your loans current.
If you’re interested in filing bankruptcy to get out of student loan debt, your advisor may be able to offer limited help in that area. You might need to consult a bankruptcy attorney to understand your options better and whether you can file bankruptcy for student loan debt.
Financial advisor for student loans while still in school
Can a financial advisor help with student loans while you’re in school? They could, but the advice you might seek out can depend on your situation.
You might consult an advisor while in school if you need help:
- Deciding whether to take out federal or private student loans.
- Comparing other financial aid options, such as federal work-study, grants, or scholarship programs.
- Funding study abroad with student loans if you plan to spend a semester or two overseas.
- Understanding when you need to resubmit your FAFSA or reapply for private student loans.
- Figuring out how to close funding gaps if your financial aid package was too low.
- Deciding what to do with student loan overages if you received more money than you needed for school.
- Budgeting to pay your loans while in school to get a head start on repayment.
- Preparing for student loan repayment once you graduate or leave school.
An advisor could help you feel more confident about your choices for financial aid and financing your education with student loans.
Where to find a financial advisor to help with student loans
Financial advisors aren’t all alike, and it’s essential to find one that fits your needs if you think talking with one makes sense. You can ask friends and family for recommendations, then expand your search online. The National Association of Personal Financial Advisors (NAPFA) can be an excellent place to start.
More advisors offer virtual meetings now, so you may not need an advisor in your local area. However, the location might be important if you want to meet face-to-face.
When looking for an advisor who’s well-versed in student loans, check their certifications. You’ll want to look for someone who is a Certified Student Loan Professional (CSLP), which indicates advanced knowledge and expertise in student loans.
It’s helpful to ask the right questions, including:
- What is your background in offering advice on student loans?
- Do you specialize in federal student loans, private student loans, or both?
- What is your typical client like regarding the types of debt they have and how much they owe?
- How knowledgeable are you about specific areas of student loan management, such as income-driven repayment, loan forgiveness, or refinancing?
- What do you charge, and how do you structure your fees?
- How often do you communicate with clients, and what is your preferred method of communication?
- Are you a fiduciary?
For a deeper dive into an advisor’s background, check their website and social media accounts first.
Client testimonials can give you an idea of what others say about them. You can also use the Financial Industry Regulatory Authority’s BrokerCheck Tool to determine whether they have disciplinary or legal actions on their record.
Alternatives to a financial advisor for student loan help
If you can’t pay an advisor’s fees just yet, you may be able to get help through your school’s financial aid office. The school may be able to answer all your questions or refer you to a nonprofit student loan counselor. Nonprofit counselors may charge nominal or no fees for their services.
You could also ask a parent or guardian to raise these questions with their advisor if they have one. Their advisor may offer a no-fee consultation to discuss your student loan situation if you have a lengthy list of questions.
Finally, you could look for free student loan help online. Several articles on the Department of Education website explain federal student loans in detail.
You can also search for other reputable websites that offer advice regarding student loans, such as Student Loan Planner, which offers student loan consultations and several up-to-date resources. It also offers financial planning services through SLP Wealth. All advisors have the CSLP designation and many also have the Certified Financial Planner designation.