The federal student loan repayment process will restart on October 1, after an 18-month non-payment hiatus. With interest rates at record lows, this may be a great opportunity for financial advisors to start offering student loan repayment advice to attract new clients. Many student loan borrowers will be looking for repayment, refinancing, and forgiveness advice. Therefore, PayForED is launching its new “Jump Start” program.
The Jump Start program offers new software pricing, a new outsourcing option to help you get started, user webinars, and more. With many HENRY (High Earner Not Rich Yet) professionals needing better repayment advice, financial professionals can now offer this service easily. It could provide a new revenue source. PayForED’s new delayed refinancing tool was designed specifically for these professionals.
With the PayForED Jump Start program, the advisor can also add college funding to their business services. The PayForED software platform has three solutions that help advisors from the college funding decisions through student loan repayment and forgiveness.
Student Loan Repayment and College Funding Business Model
Due to the overall complexity, financial advisors have been reluctant to add college funding and student loan repayment advice to their practice. This is changing. As student debt increases across more age groups, financial advisors can grow their business by offering these services. More people will be seeking this financial advice.
The increased use of the Income-Driven Repayment method is a perfect example. According to the Department of Education’s recent data, over 56% of student debt dollars are now repaid using an IDR method. With this growing use of IDR repayment methods, clients need to manage their tax filing status, pre-tax deductions, and other financial factors to properly lower their monthly payments and properly qualify for loan forgiveness.
With this trend, financial advisors are the perfect resource to deliver these personal financial answers and strategies.
Ideally, the repayment process should begin during the college planning process when the debt is being incurred. The debt structure determines the legal liability, loan repayment options, and student loan forgiveness for your client. This leads us back to why a more holistic approach is required by financial advisors. By offering a college funding service, advisors help clients pay for college with advanced tax strategies and proper debt structure saving clients tens if not hundreds of thousands of dollars.
Advantages of PayForED Jump Start
Over the years, we have learned the reluctance of financial advisors to add these services. The learning curve is a little steep and it is a relatively new topic for most financial professionals. To overcome this first huddle, PayForED added videos and a CFP CE training program. Over the past few months, PayForED has piloted an outsourcing solution for advisors which has been well accepted.
This new process allows the financial advisor to purchase the software and have the work done for them. The outsourcing includes a recommendation report and a 30-minute client prep meeting. A client meeting option is available at an additional fee. With this approach, financial advisors now can feel more comfortable in their implementation since they can learn as they go without making a large investment of time and money.
PayForED’s new pricing also allows advisors to create a new business model that helps as a client retention solution. The PayForED DIY environment allows the advisor to give their client one of our 3 software tools. As an example, for the client’s child who needs graduate school, you could give them the In-College Payer. For another client, the Student Loan Repayer could help the client’s child who marries a person with student debt. Both tools could be the perfect solution to improve your relationship with minimal work.
By offering a student loan repayment service, you will be able to help the young professional get on the right track to a positive financial future. Another trend is many pre-retirement parents will need advice with Parent PLUS loans and co-signed student loans.
Listed below are examples of how the PayForED single solution can help financial advisors attract more clients and improve current relationships. It allows the financial advisor to provide answers to different clients more efficiently. You are not becoming a college planner but a financial strategist.
PayForED Jump Start Summary
The student loan repayment restart is in October. Financial advisors have a great opportunity to provide this new service now. Here is how it works:
- Purchase PayForED licenses – $300 (Access to 20 annual licenses)
- Access to Advisor Portal with Get Started Training Videos
- Discounted Outsourcing Fees provided by Amrein Financial ($100 value)
- (Outsource discount – First Project $100 discount)
- User Webinars
- Discounted Price on CFSLA Training Program ($300 Value)