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• Credit counseling helps consumers manage debt, set budgets, and repair credit.
• Credit counseling services offer debt management plans, where counselors negotiate loan terms with creditors on behalf of the consumer.
• Credit counseling services can be helpful, but you need to vet these services carefully.

As of the third quarter of 2022, the Federal Reserve of New York reports that Americans hold just under $930 billion in credit card debt.

Credit counseling is both a preventative and remedial solution to growing consumer debt. A credit counselor can offer guidance on money management and help you tackle your debt. 

What is credit counseling?

Credit counseling, also known as debt or financial counseling, is a process where licensed professionals help consumers resolve their financial challenges, like debt management and budgeting. Depending on the counselor's training, they may also provide pre-bankruptcy, housing, and other specialized counseling for your unique situation. 

If you have a mountain of credit card debt, your credit counselor will work with your creditors to reduce your interest rates, lower your monthly payments, waive your late fees, and consolidate your debts. 

"By working with a credit counselor, individuals can gain the tools and knowledge they need to regain control of their finances and achieve financial stability," says Michael Ryan, former financial planner and financial coach at MichaelRyanMoney.com. 

How is credit counseling different from debt settlement?

While credit counseling organizations and debt settlement companies may negotiate with your creditor on your behalf, the main difference between these services is what they ask the creditors for.

Nonprofit credit counseling organizations can help negotiate the terms of your payments, such as interest rates or payment periods, to make your debt more manageable. However, the amount you ultimately owe won't change. They can do this at an affordable price without seriously impacting your credit score, explains Ryan.

On the other hand, debt settlement companies negotiate with your creditor to see if they can reduce the amount you owe, though this could significantly impact your credit score. Debt settlement companies also charge a hefty fee for their services.

What happens in a credit counseling session?

Before you undergo a formal session, a credit counseling organization will arrange a free phone or in-person consultation with you and a certified credit counselor. The initial session usually lasts 30 minutes to an hour as your credit counselor gets a sense of your situation and the circumstances that led you into financial hardship. Your counselor may also request you pull a credit report to fix any inconsistencies on your file, which may boost your credit score.

Then your credit counselor will offer various strategies for getting out of debt and managing your money. They also often offer free educational materials to help you build financial literacy. 

You may only need one consultation to gather tips on improving your financial situation. However, your credit counselor may recommend a debt management plan (DMP). With a DMP, your counselor works with creditors to lower your interest rates and monthly payments. You'll have to pay a small fee to participate in a DMP, so reputable organizations only offer this program if needed.

How to prepare for a credit counseling session

You want to get the most out of your credit counseling sessions, and preparing before your session can facilitate that. You'll want to bring financial documents illustrating the scope of your financial situation. Some records you may consider taking with you are pay stubs, invoices, and statements with your credit card bills and monthly expenses. 

You'll also want to come to your session with financial goals around credit, debt, or anything else you want to bring to your counselor.

How to find a credit counseling agency

Choosing a credit counselor to can be overwhelming. However, you can narrow your options by vetting the agency they work for and asking several questions. 

Step 1: Create a list of potential credit counseling agencies

Not all credit counselors will offer the same services. So, it's essential to identify what you need, whether it's budget counseling or a more niche Topic like mortgage counseling. You can begin your research using the National Foundation for Credit Counseling (NFCC) and the US Department of Justice's search engine. 

The NFCC is the oldest-standing nonprofit credit counseling agency. You can tap into its extensive database of credit counseling organizations and find a credit counselor that offers the services you need. Alternatively, you can phone 202-677-4300 or email info@nfcc.org to reach an NFCC representative directly.

The US Department of Justice also offers a search tool to locate credit counseling agencies in your area. However, its database is limited to advisors that specialize in bankruptcy counseling. Most of these counselors also offer other services, but the search engine doesn't provide the capability to filter through those various services. That's something you'll have to do yourself.

Step 2: Ensure the credit counseling agency is accredited and nonprofit

Alongside the NFCC and the US Department of Justice, several resources can help you identify an agency's accredited status. Most reputable credit counseling services are also nonprofit. For-profit agencies have financial incentives to sell debt relief programs instead of putting the consumer's best interest first. 

Step 3: Set up a meeting to inquire about an agency's credit counseling services

After assembling a list of accredited, nonprofit credit counseling agencies to work with, schedule a free preliminary consultation with each company. Before your meeting, gather your financial documents and form questions to ask during the session. 

These are a few questions you can ask to find the right counselor for you, according to the Federal Trade Commission:

• What services do you offer? 
• Do you provide free educational materials? 
• Will you help me develop a preventative plan for avoiding future financial issues? 
• What are your fees, and how should they be paid? 
• What if I can't afford to pay your fees? 
• Will I have a formal written contract with you? 
• Are you a licensed counselor in my state? 
• What are the qualifications of your counselors? 
• What measures does the company take to ensure my information is kept confidential and safe? 
• How are your employees paid? 

Step 4: Sign up for a credit counseling agency

After conducting interviews with each counselor, pick one you feel most comfortable creating an ongoing relationship with and one who charges rates within your budget. Credit counseling is generally affordable; however, your counselor will require payment for the debt management plan (DMP) if recommended. As we mention in the previous step, this should be one of the questions you as in your free preliminary consultation. That said, states usually place limits on these fees. Nationwide, your credit counselor may only charge you up to $79 for DMP fees, according to Experian.

Can credit counseling hurt your credit score?

Credit counseling itself won't impact your credit. However, the same can't be said for any actions you take resulting from your counseling session. If the plan is effective and you stick to it, you could make strides in paying off your debt which may increase your credit score by building positive payment history and lowering your credit utilization ratio.

If you sign up for a DMP and your counselor requires you to close accounts, this may drop your credit score by a few points. Your DMP may be contingent on you making your minimum payments each month. If you miss any of these, you may also see your credit score drop. 

Is credit counseling right for you?

Credit counseling is an excellent way to tackle your outstanding debt and Improve your overall financial wellness at an affordable price. However, credit counselors don't offer services drastically different from what you can already do yourself. 

If you don't have creditors hounding you down for a late payment and can reasonably manage your debt, you may want to forgo paying for a debt relief program. You can negotiate with your credit card company to lower your payments or settle your debts. If you're relatively accountable, you can set up a DIY debt payment program using the snowball or avalanche debt repayment method. 

Otherwise, there isn't harm in seeking help, and credit counseling is an affordable and safe method for managing your debt. 

Credit counseling frequently asked questions (FAQ)

Feb. 6—National School Counseling Week 2023, "School Counselors: Helping Students Dream Big," sponsored by the American School Counselor Association (ASCA), will be celebrated from Feb. 6 — 10, 2023, to focus public attention on the unique contribution of school counselors within U.S. school systems and how students are different as a result of what school counselors do. National School Counseling Week highlights the tremendous impact school counselors can have in helping students achieve school success and plan for a career.

The special week honoring school counselors provides recognition for school counselors who "implement comprehensive school counseling programs, a vital part of the educational process for all students as they meet the challenges of the 21st century," according to Huntsville High School Principal Paul Trevino.

Trevino cited school counselors for being actively engaged in helping students examine their abilities, strengths, interests and talents; for working in a partnership with parents as they encounter the challenges of raising children in today's world; for focusing on positive ways to enhance students' academic, career and social/emotional development; and working with teachers and other educators to provide an educational system where students can realize their potential and set healthy, realistic and optimistic aspirations for themselves. School counselors are certified, experienced educators with a master's degree in school counseling. The combination of their training and experience makes them an integral part of the total educational program.

"School counselors work with all students to remove barriers to learning by addressing students' academic concerns, career options and social/emotional skills," said Jill Cook, ASCA executive director. "School counseling programs help to increase student achievement and provide a much-needed resource for students, parents, teachers and administrators. School counselors are integral to student success."

More than 100,000 school counselors nationwide will be participating in the week's festivities. Many schools will be hosting special events and activities to call attention to the countless benefits of a comprehensive school counseling program.

As part of its celebration for National School Counseling Week, HHS will be celebrating counselors with treats, food, and individual recognition on campus and social media. Parents or community members with specific questions or concerns about school counseling programs should contact the school counselors at their local schools. More general information can also be found on ASCA's website, www.schoolcounselor.org.

About the American School Counselor Association

The American School Counselor Association (ASCA) promotes student success by expanding the image and influence of school counseling through leadership, advocacy, collaboration and systemic change. ASCA helps school counselors guide their students toward academic achievement, career planning and social/emotional development to help today's students become tomorrow's productive, contributing members of society. Founded in 1952, ASCA has a network of 51 state and territory associations and a membership of approximately 43,000 school counseling professionals. For additional information on the American School Counselor Association, visit www.schoolcounselor.org.

Feb. 15—The Caston School Corporation was awarded a Comprehensive School Counseling Grant worth $72,522 in funding from the Indiana Department of Education.

Caston was one of 26 school districts, charter schools and community partners to share in $5 million of available funding. The grant can be used to "further develop and expand school counseling services and resources that Improve student achievement, well-being and college and career readiness," a press release announcing the awards read.

Tina Paschen, a Caston counselor and dean of students, said she hopes the funding will help hire and train a third counselor.

Funding will also be put toward mental health programming for both students and staff.

Caston enrollment has increased by around 200 students in the last couple of years, Paschen said, which has increased the workload for her and her colleague, Anita Doan.

Paschen oversees counseling for the high school students, and Doan works with the elementary students. The pair divides the junior high between them.

Paschen took the position of counselor just before COVID disrupted schools. Now that there is some stability in the school year, she said they are currently reviewing and refocusing what is in their comprehensive school counseling plan.

"We were real excited to get that grant because it will help us look at the pieces we are missing in our program to make it better," she said. "After COVID, we have different kinds of problems and problems we had before seem to be more exponential. We have a lot of kids with a lot of needs."

One of the current problems facing students is a lack of social skills, she said. Part of that comes from their constant interaction with devices. But a lot of it came from the isolation during COVID.

Along those lines, Doan said students really want to be listened to.

"One of the things they really need is someone to listen to them," she said. "They just need someone to focus in and look at them when they are talking. We're all kind of attached to the internet and our phones. They want people to not have a phone in their hand and to be there talking to them, listening to them."

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Paschen also said perseverance was something students need help with. They become so used to how instantaneous things can be online, she said, that they grow frustrated when trying to solve a difficult math problem or to work through even a relationship issue.

"They want that relationship issue solved quickly," she said. "They want an assignment done quickly. Sometimes things take time. You have to work through that and give things time."

The goal of the Comprehensive School Counseling Grant is to expand the number of schools providing such a program, to define the role of a school counselor in improving student outcomes in regards to the Indiana Graduates Prepared to Succeed program and to create a network of progress monitoring to determine effectiveness and help identity where local support and guidance is needed.

National School Counseling Week 2023, sponsored by the American School Counselor Association (ASCA), will be celebrated from Feb. 6–10, to focus public attention on the unique contributions of school counselors within U.S. school systems and how students are different as a result of what school counselors do. National School Counseling Week highlights the tremendous impact school counselors can have in helping students achieve school success and plan for a career. 

The special week honoring school counselors provides recognition for school counselors who “implement comprehensive school counseling programs, a vital part of the educational process for all students as they meet the challenges of the 21st century,” according to Director of Warren County Schools Dr. Grant Swallows.

In a proclamation, Dr. Swallows cited school counselors for being actively engaged in helping students examine their abilities, strengths, interests and talents; for working in a partnership with parents as they encounter the challenges of raising children in today’s world; for focusing on positive ways to enhance students’ academic, career and social/emotional development; and working with teachers and other educators to provide an educational system where students can realize their potential and set healthy, realistic and optimistic aspirations for themselves. School counselors are certified, experienced educators with a master’s degree in school counseling. The combination of their training and experience makes them an integral part of the total educational program.

“School counselors work with all students to remove barriers to learning by addressing students’ academic concerns, career options and social/emotional skills,” said Jill Cook, ASCA executive director. “School counseling programs help to increase student achievement and provide a much-needed resource for students, parents, teachers and administrators. School counselors are integral to student success.”

More than 100,000 school counselors nationwide will be participating in the week’s festivities. Many schools will be hosting special events and activities to call attention to the countless benefits of a comprehensive school counseling program. 

As part of its celebration for National School Counseling Week, Warren County Schools will be sharing morning announcements about National School Counseling Week and other activities, depending on the school. Parents or community members with specific questions or concerns about school counseling programs should contact the school counselors at their local schools. More general information can also be found on ASCA’s website, www.schoolcounselor.org.

School counselors in Warren are: Bobby Ray, Rebecca Carter; Centertown, Dana Grissom; Dibrell, Haley Ortiz; Eastside, Shawn Palombo; Irving College, Heath Roberts; Morrison- Joshua Feiran; West, Emily Haston; Warren County Middle School, Becky Parton; Kristi Slatton; Warren County High School, Whitney Britton, Kari Burnett, Keri Carlson, Stacy Smith and Marisa Young

The American School Counselor Association (ASCA) promotes student success by expanding the image and influence of school counseling through leadership, advocacy, collaboration and systemic change. 

ASCA helps school counselors guide their students toward academic achievement, career planning and social/emotional development to help today’s students become tomorrow’s productive, contributing members of society. Founded in 1952, ASCA has a network of 51 state and territory associations and a membership of approximately 43,000 school counseling professionals. 

For additional information on the American School Counselor Association, visit www.schoolcounselor.org.

Medora Community School Corp. recently received a $230,000 Comprehensive School Counseling Grant from the Indiana Department of Education.

It was approved during Monday’s board of school trustees meeting.

In conjunction with National School Counseling Week last week, the Indiana Department of Education announced the recipients of $5 million in funding, which will support 26 school districts, charter schools and community partners to further develop and expand school counseling services and resources that will Improve the well-being of students, achievements and college and career readiness.

“Thanks to Equitable Education Solutions, Dr. Michael Langevin and Cindy Hurst for helping us file for the grant at no extra cost to us,” Superintendent Roger Bane said.

Successful applications specified how grant funding would Improve counselor-to-student ratios and establish or further strengthen partnerships with community organizations and employers.

Medora Junior-Senior High School Principal Kara Hunt said the Indiana Department of Education notifies school administrators when there are grants available to public schools.

On Feb. 3, she was notified Medora’s grant would be fully funded.

“I was very excited for our corporation to be awarded this grant as I believe it will greatly benefit students and staff,” Hunt said.

“School counselors are uniquely positioned to provide students with a number of important services, including guidance in completing all necessary courses and other graduation requirements, encouraging exploration of career and postsecondary opportunities and overall well-being support,” said Katie Jenner, Indiana secretary of education.

“The recipients of this grant understand the importance of comprehensive school counseling and the range of support our students need in order to reach their full potential,” she said. “With this additional funding, they will be better equipped to support the needs of their community and ultimately move the needle for their students.”

Hunt said with the grant, the school will hire a full-time licensed mental health therapist or clinical social worker to meet the students’ social, emotional and behavioral needs.

The responsibilities in this position will include assisting students with personal or social concerns that interfere with learning. The social worker also will help implement social-emotional learning lessons, counsel students through direct one-to-one services and support families by connecting with external providers and mental health resources.

This position will allow the current guidance counselor to focus more on academics, graduation pathways and postsecondary information.

When first establishing the Comprehensive School Counseling Grant, the Indiana Department of Education identified three key goals to further support student achievement, well-being and college and career readiness.

The goals are to expand the number of Indiana schools providing a comprehensive school counseling program, explicitly define the role of a school counselor in improving student outcomes as it pertains to the five student characteristics of Indiana Graduates Prepared to Succeed and create a network of progress monitoring to assess effectiveness and identify areas in need of additional local support and guidance.

Since the COVID-19 pandemic, Hunt said she has seen a surge of students in need of mental health support. With this grant and the hiring of a social worker, she hopes this will put less stress on families and educators as more students will be able to receive the help they need.

“We currently work with a mental health provider who visits the school and sees students who have been referred for mental health issues with the support of parents,” Hunt said. “However, the demand for care far outweighs the provider’s capacity to provide support, and students who need mental health care are put on a long waiting list, which is frustrating for parents and educators.”

With the grant being fully funded, Hunt said it will cover not only the salary and benefits of a full-time social worker for three years but allow the school to include resources for instructional staff. The school will use $30,000 to provide access to personal and confidential mental health services for staff.

“We are confident that our student body will be better served when we also take measures to ensure that our counselors, teachers and other staff members are mentally healthy,” she said.

Hunt said the well-being of the teachers and staff is important not only for the teachers themselves but for the students’ learning environments. With these mental health services impacting the teachers, Hunt said it will indirectly impact the students, as well.

“By addressing student mental health issues and connecting families to community resources, student learning and achievement should increase,” she said.

Funding for the Comprehensive School Counseling Grant is allocated as part of the state’s federal Elementary and Secondary School Emergency Relief plan. Through this grant, more than 117,000 students across 17 Indiana counties will be supported.

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In conjunction with School Counseling Week, the Indiana Department of Education has announced recipients of $5 million in funding, which will support 26 school districts, charter schools and community partners to further develop and expand school counseling services and resources that Improve student achievement, well-being and college and career readiness. In the Michiana area, the Michigan City School District is listed among the recipients.

Successful applications specified how grant funding would Improve counselor-to-student ratios as well as establish or further strengthen partnerships with community organizations and employers.

“School counselors are uniquely positioned to provide students with a number of important services, including guidance in completing all necessary courses and other graduation requirements, encouraging exploration of career and postsecondary opportunities and overall well-being support,” said Dr. Katie Jenner, Indiana Secretary of Education. “The recipients of this grant understand the importance of comprehensive school counseling and the range of support our students need in order to reach their full potential. With this additional funding, they will be better equipped to support the needs of their community, and ultimately, move the needle for their students.”

To further support student achievement, well-being and college and career readiness, IDOE identified three key goals when establishing the Comprehensive School Counseling Grant:

Expand the number of Indiana schools providing a comprehensive school counseling program;

Explicitly define the role of a school counselor in improving student outcomes as it pertains to the five student characteristics of Indiana Graduates Prepared to Succeed;

Create a network of progress monitoring to assess effectiveness and identify areas in need of additional local support and guidance.

Funding for the Comprehensive School Counseling Grant is allocated as part of the state’s federal Elementary and Secondary School Emergency Relief plan. Through this grant, more than 117,000 students across 17 Indiana counties will be supported.

Carson City School District

The Carson City School District is pleased to honor school counselors during National School Counseling Week, Feb. 6-10, 2023.

Sponsored by the American School Counselor Association, the week will help focus public attention on the unique contribution of school counselors within U.S. school systems and how students are different as a result of what school counselors do.

National School Counseling Week highlights the tremendous impact school counselors can have in helping students achieve school success and plan for a career. The special week honoring school counselors provides recognition for school counselors who implement comprehensive school counseling programs, a vital part of the educational process for all students as they meet the challenges of the 21st century.

School counselors are certified, experienced educators with a master’s degree in school counseling. The combination of their training and experience makes them an integral part of the total educational program. These counselors work to ensure that Carson’s students have access to support in the areas of academic success, social emotional skill sets and career and college planning through many activities such as class scheduling, group supports and individual meetings.

Carson City School District has 14 certified School Counselors at four school sites (alphabetically by last name): Carson High School (Justin Barlow, Dori Draper, Bridget Gordon, Nicki Hendee, Fawn Lewis, Michele Quintero and Monica Weaver), Carson Middle School (Jez Batten, Roger Churchill and Madison Krause), Eagle Valley Middle School (Mandy Chambers, Lupe Schofield and Whitney Tynes) and Pioneer High School (Cary Jordan).

“School counselors work with all students to remove barriers to learning by addressing students’ academic concerns, career options and social/emotional skills,” said Jill Cook, ASCA executive director. “School counseling programs help to increase student achievement and provide a much-needed resource for students, parents, teachers and administrators. School counselors are integral to student success.”

More than 100,000 school counselors nationwide will be participating in the week’s festivities. Many schools will be hosting special events and activities to call attention to the countless benefits of a comprehensive school counseling program.

As part of its celebration for National School Counseling Week, Carson City School District will be celebrating counselors and supports of counselors within schools. Parents or community members with specific questions or concerns about school counseling programs should contact the school counselors at their local schools. More general information can also be found on ASCA’s website, www.schoolcounselor.org.