With student loan repayment ready to restart by October 1, 2023 many student loan borrowers will be searching for advice. As a financial advisor, it’s important to have a thorough understanding of student loan repayment and forgiveness options to address this new opportunity. This article offers a comprehensive overview of the two major student loan repayment training programs.
Both programs have FINRA-listed designations and have approved CFP CE credits. The courses cover student loan structure, income-driven repayment plans, loan consolidation, and loan forgiveness programs. With this knowledge, you can better assist your current clients and attract new clients who will be looking for the proper advice.
Program Training Approach
There are two student loan repayment and forgiveness training programs that provide FINRA-listed designations at completion. The two listed designations are Student Loan Repayment Advisor (SLRA) and the Certified Student Loan Planner (CSLP). Both courses offer very similar content but with a very different learning approach. The CFP recognizes both programs with the CSLP program earning 12.5 CEs while the SLRA program earns the advisor 13 CFP CEs.
The SLRA program is a more direct course and assumes the student has a personal financial background. On the other hand, the CSLP takes a more traditional academic approach since it is designed as a college course that requires over 40 hours of classroom learning in most states to be approved.
The CSLP test requires a significantly more amount of traditional memorization since it is designed as a college course and exam program. While the SLRA program takes a more application and strategic approach to learning the content.
In addition, the SLRA program has a comprehensive approach to the student debt crisis. It has an additional CFP-approved course that covers the details of college funding and the student loan decisions. Having both courses allows financial advisors to prevent and solve the student debt problem that more families will be facing as college costs continue to rise. Student debt structure is a critical component of understanding student loan repayment options.
Understanding the Link between Student Loans and Repayment
Student loans are a common way for families to finance their education, but they can also lead to significant debt after graduation. Understanding the link between student loans and repayment is crucial for financial advisors who want to help their clients manage their debt.
There are two types of student loans, Federal and Private. Federal student loans are owned or guaranteed by the federal government. These loans typically have better repayment and forgiveness options. Private student loans have some advantages but do not offer the same flexibility that the federal offers. Private loans cannot be forgiven under most federal loan forgiveness programs.
A trained financial advisor can provide advice to lower monthly payments, maximize loan forgiveness and navigate the different loan repayment options to avoid student loan default. By thoroughly understanding these factors, financial advisors can provide valuable guidance to their clients and help them make informed decisions about their student repayment and forgiveness decisions.
Student Loan Repayment and Forgiveness Options and Opportunities
As a financial advisor, it is important to understand the various options available for student loan repayment and forgiveness. These options can vary depending on the type of loan, the borrower’s income, tax filing status, and employment. Some common options include income-driven repayment plans, loan consolidation timing, and loan forgiveness programs. These decisions impact other parts of clients’ financial plans.
Due to the increased complexity, student loan servicers and college financial aid offices cannot legally provide the correct advice. With more than 54% of student debt dollars being repaid using an IDR method, proper benefit and tax planning are required. Another growing trend is people over the age of 50 are the fastest-growing group of student loan borrowers. This is resulting in a delay in retirement or borrowers carrying student debt into retirement.
We are starting to see the influx of new federal legislation associated with student loans. This includes SECURE 2.0, tax-free reimbursements, and the implementation of student loan assistance. Financial advisors will need this training as over 70% of the future education workforce will have student loans.
Comparing Repayment and Forgiveness Training Programs
It’s important to compare and contrast these programs to determine which one is the best fit for your needs. Some factors to consider include the cost of the program, the length of the training, the level of support provided, and the quality of the curriculum. By doing your research and selecting the right program, you can enhance your knowledge and expertise in this important and growing area of financial planning.
Here is a comparison chart of the SLRA vs CSLP training programs:
SLRA Boot Camp Option
One of the biggest differences is the SLRA offers a boot camp option that helps financial advisors stay on track easier and apply what they have learned quicker. This is a three-day program that requires the advisor to complete 3 – 4 hours of assignments each day.
At the end of each day, a group meeting is available to discuss those specific chapters and review a few case studies. With this learning structure, the advisors can better manage the learning, complete the course in a specific time frame, and have questions answered quickly. It also allows advisors to apply the learning quickly and start using it in their business model.
Comparing Student Loan Repayment and Forgiveness Software Solutions
As a financial advisor, it is important to have access to the right tools and software solutions to help you provide the proper advice. Both designations have their own software solutions with different features and analyses. With the increased use of the IDR methods and the automation of the IRS data, more importance will need to focus on tax analysis. Currently, the SLRA/PayForED solution has a tax estimating calculator embedded in it which makes it easier for the advisor to explain the strategies to clients.
Some financial advisors may think that by knowing financial planning and having a good student loan software solution they can provide this service. I would disagree and feel that additional training is needed. Similar to proper tax planning and estate planning each situation is unique based on a variety of items. Student loan repayment and forgiveness planning have their own language and the rules are very complex.
Here is a comparison chart of the SLRA vs CSFP Software Solutions
By selecting the right software solution, you can help your clients achieve their financial goals and build a successful practice. The PayForEd solution is a more holistic approach since it also contains a college planning solution and graduate school tool. It also has a student loan assistance platform for advisors who are working in the company retirement space and need a solution for SECURE 2.0.
Student Loan Assistance Program Portal Option
The SLRA software solution has an additional platform for employers and employees. Employers will be looking for this new employee benefit with the new tax-free student loan reimbursement, SECURE 2.0 rules, and the upcoming loan repayment restart.
According to an AICPA survey, student loan repayment benefit is the third most requested benefit for employees under the age of 35. This will become a growing opportunity for financial advisors who specialize in retirement and company benefits. Employers will be adding the Student Loan Assistance programs to improve both recruitment and retention in the upcoming years.
The SLRA training and software solutions provide the advisors with the knowledge and tools they need to be successful in the employer market as well as the individual client space.
Student Loan Repayment and Forgiveness Training Summary
With the upcoming student loan repayment restart and IDR recertification, more borrowers than ever will be searching for better advice. Due to the national student loan forbearance lasting 3.5 years, the loan servicers will be struggling to provide the needed support. As stated above, their advice is limited and may not be complete due to the increased complexities and lack of trained staff.
Both the SLRA and the CSLP are good training programs that will help you get the basic knowledge that you will need to add this service to your business. Based on the comparison charts above, you can easily see the difference based on your learning style and software needs.
If you are looking to increase your knowledge in student loan repayment and forgiveness, the SLRA offers a quick way to attain that required knowledge. The SLRA will be starting its training boot camps in May in preparation for the student loan repayment restart in September. In addition to the course, there are monthly advisor meetings that advisors with the designation can attend.