The National Foundation for Credit Counseling announced Monday it has acquired of the Student Loan Alliance. Terms of the deal were not disclosed.
The Student Loan Alliance was formed in 2012 by seven current NFCC member agencies as a joint venture to build a national platform for student loan counseling. Those companies include ClearPoint Credit Counseling Solutions, Consumer Credit Counseling Service of San Francisco, GreenPath Debt Solutions, Money Management International, Navicore Solutions, Springboard Nonprofit Consumer Credit Management and Take Charge America.
Their early work produced an online portal for consumer access to services and the framework for a more comprehensive counseling experience, according to NFCC.
The NFCC plans to expand on the foundation created by the Student Loan Alliance and launch the nations largest certified student loan counseling network by the fall. All participating counselors will be required to complete training that covers the complete inventory of student loan programs associated with repayment, forbearance or other forgiveness options.
Student loan debt recently surpassed credit card debt at $1.3 trillion and is now second only to mortgages in terms of total consumer debt. Among the 43 million total federal student borrowers, 7.3 million are at least 90 days delinquent on their loans, 5 million are in default and millions more are in negatively-amortizing income-driven repayment plans.
The figures indicate that student debt could drive the next major financial crisis affecting millions of Americans, with spillover effects already impacting the market for homes, cars and basic consumer goods and services.
Along with the training requirement NFCC will require, counselors will have to complete an additional round of examination to earn certification. Offered along with the credit and housing counseling certification, it will be the most comprehensive certification process for student loan counselors in the U.S., according to the NFCC.
"Those who receive counseling will benefit from a thorough financial review that will identify options based on their unique circumstances and individual needs. This holistic approach, already a standard among NFCC counselors, will empower borrowers to make informed decisions about their student loan repayment options and take charge of their financial lives, according to the NFCC.
Struggling student loan borrowers often do not know where to turn because there is no established student loan counseling provider.
According to a recent report by the Consumer Financial Protection Bureau, student loan debt collection is among the five highlighted areas where examiners have uncovered legal violations.
"The need for a high quality, comprehensive and consumer-driven program to assist student loan borrowers is urgent," said NFCC President Susan C. Keating. "Student Loan Alliance resources will help our member agencies fill that need for consumers in every state."