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Counseling Help for Distressed Student Loan Borrowers?

posted by david lander

As always, it has been very enjoyable to be a guest here. Three thoughts until next time.

1. At least two major organizations are about to join or have recently stepped into the effort to provide help to distressed student loan borrowers. National Foundation for Credit Counseling is launching an effort that was piloted by several of their larger members. Also,Neighborworks is launching an effort. We need high quality counseling for these borrowers, but the counseling programs face many challenges including the following

            a. Training must include not only the very complicated technical issues, but also counseling and interpersonal techniques; trainers must know both areas;

            b. These will hopefully be more than just diagnosis and pointing to the right program; digging into each individual case to help the borrower find the best option is complicated and takes time and skills;

            c. This counseling requires more than a single session and previous NFCC programs have not accommodated follow up sessions;

            d. The programs require serious quality control; and    

            e.  Finally,each provider MUST have a relationship with a legal services program or law school clinic that has expertise in student loan borrower programs so that referrals are smooth;

        2. Use of adjuncts at many law schools is undergoing major changes. In a few months I hope to start on a factual review of what is happening and comment on what that means for legal education. The fall in number of students the last several years at most law schools and the continuing pressure by the Bar for more practice-oriented education are two factors. And then there is the question of the most effective way of integrating adjuncts with the full time faculty and the general curriculum. More on this topic down the road after more numbers are in. 

        3. AFCPE (Association for Financial Counseling & Planning Education) has just received accreditation for its financial counselor certification from the National Commission for Certifying Agencies.  This is an important development for the field and i hope to comment in the future more fully on its meaning and impact. CFPB and many funders have been watching to see if the certification would be approved.


Pardon my cynicism, but what are the counselors going to do? Provide instruction in creative cooking with ramen noodles and baked beans so that borrowers can make payments while scratching by in accordance with the Brunner standard?

The time for counseling is BEFORE students take on hopeless amounts of nondischargeable debt.

Perhaps the counselors are going to help borrowers navigate the thicket of applying for the various loan forgiveness and income based repayment programs. It seems like a complicated program is being designed to do that. Wouldn't it be simpler to make it easier to apply for those programs? In fact, offer an alternative such as allowing DoE to determine eligibility automatically by reviewing IRS data with the borrower's consent, subject to some right of appeal by the borrower if a claim is denied.

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