10 Questions for … a Student Loan Consultant

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Ever since he was a kid, John Smith knew that his calling was in medicine. But while Smith didn’t have to struggle with the ubiquitous “What am I going to do with the rest of my life?” question, the newly minted M.D. has struggled to pay off his high-interest-rate student loans.

The problem? Although Smith never missed a payment on his student loans, he was frequently unable to make the entire monthly minimum payment. And whenever he asked his lender to consider renegotiating that amount, the answer was no—and the lender eventually turned his account over to a collections agency that began making threatening calls to his dad, who’d co-signed the loans.

If his student loans had been issued by the federal government, Smith would have had the option to make affordable, income-based payments until he finished his training and his salary increased. Unfortunately, his loans were issued by private lenders, and they rarely agree to reduced payments—even temporarily.

Heather Jarvis knows these stories all too well. The North Carolina–based attorney and student-loan consultant has spent the last ten years advocating for—and educating—student borrowers. And given that interest rates on federal Stafford loans doubled to 6.8% on July 1, there’s likely be a lot more advocating and educating in her future. We sat down with Jarvis to learn more about student loan consultants—a profession that’s, not surprisingly, in high demand.

LearnVest: First thing’s first … What exactly is a student loan consultant?

Heather Jarvis: As many of us know, the earlier that students and families start to think about how to manage college costs, the better, but my focus is to help people figure out how to deal with the student loans they have already accumulated. I do this by, among other things, educating universities, associations and professional advisors about student-loan repayment and forgiveness programs.

Although my focus is on training student loan officers, student loan consultants work one-on-one with borrowers to create customized repayment plans. Their advice and advocacy can be valuable, but I encourage people to carefully evaluate their options before hiring someone. There are an increasing number of businesses that are preying on borrowers’  anxieties and fears by charging them for so-called “special” programs that are actually open to everyone. So be sure to ask questions about a consultant’s education, experience and compensation—as well as investigating their track record with the Better Business Bureau.

How does a student loan consultant differ from a student loan officer who works for a college?

For one, advisors who are independent of a particular university are more likely to point out the importance of considering cost when choosing a school. Also, compared to a student loan consultant, university-employed financial-aid professionals are busy administering the financial-aid programs (including student loans) that people will use to cover their educational expenses, so they’re not typically as focused on helping students or graduates deal with how they’ll repay those loans once they finish school.

Private vs. federal loans: What’s better for the typical borrower?

Definitely federal. Private student loans [those issued by private banks or lending institutions] are typically more expensive and risky for student-loan borrowers because they lack the borrower protections and flexible repayment provisions of federal student loans. And although some borrowers with excellent credit might find private loans with lower interest rates, those rates are often variable and are almost certain to go up over time—sometimes without any cap. Additionally, the most generous debt-relief programs, like income-based repayment and public-service loan forgiveness, are only available to recipients of federal student loans.

RELATED: ‘Debt Relief’?! Beware This New Student Loan Scam

  • Sabina

    Wonderful article

  • b-dd

    Please stop saying the student loan interest rate has doubled. That is a misleading statement. In fact, it has gone back to what it was before. I’m not saying this is a good rate, but for those of us who took out loans at the time, we are already stuck with paying this so I feel almost no sympathy for those who were lucky enough these last few years to have revived the cut in interest. That would save me thousands a year. Please put it in context when you say it has ‘doubled’.

    • kim

      You are absolutely right! The student loan rate was 6.8% and was halved and now people that took advantage of the lower interest rate are complaining! At the end of the day, whatever was borrowed needs to be paid back and preferably without whining. It would not be fair to give new batches of students lower interest rates when I am stuck paying 160k at 6.8% (medical school)! I intend to pay every penny of the amount I borrowed, and so should everyone else! I live below my means to pay my debt and so should everyone else! I see people complaining about student loan debt and how it should be forgiven with Louis Vuitton purses and new Audis. Enrages me!

  • Christine

    This article didn’t really give any actual advising or action items as to what we can do with our large amounts of debt. I would like to hear more of her advice rather than just general info.

  • Kay

    how will the new student loan deal going through senate currently impact those of us who aren’t students, but have graduated and are paying students loans (and will be for some time to come!)? or will there be no impact to those with existing loans, etc.?

  • ReneeMW

    I wish this article offered more advice for those who have Private Loans. This would have been helpful maybe 8-10 years ago when I was heading into college. There’s a wealth of information out there now. What about people who were completely misled by their financial aid office and banks? I only needed to take out private loans when financial aid said my parents made too much money, which was definitely not the case. So what happens when i graduate and my mom is later on disability and my father is on unemployment because the economy tanked? There’s no financial aid then, not when it comes to private loans. I now work for a non-profit and while i’ve been able to get IBR for my federal loans, we’re still stuck making loan payments close to $700. I still live at home like many of my friends who are in the same boat. Because my loan payments are like having a mortgage!