A reader wanted to know more about a radio commercial they heard in California that was promising a student loan assistance or consolidation program. The reader said the telephone number in the radio advertisement was 800-514-9773 and they thought the company was Student Advantage.
So I called to find out what the service was all about. The telephone was answered by a very nice sales representative, Tim. Tim tells me their program allows them to consolidate federal student loan debt.
The Broadsword Student Advantage website says their services are geared towards people that need to improve their financial situation. “We have options and expertise to get you through these uncertain times and provide you with a solution to help you meet your loan obligations while you improve your financial situation.” – Source
Tim says they can consolidate my government student loans and my payment for the consolidated student loan standard program payment is $282.95. What comes to light later is that that payment includes a monthly fee of $49.95 that is not paid towards the student loan but instead paid to some financial planning product Broadsword Student Advantage is delivering or promoting.
Tim later sends me a breakdown of the available payments that shows the standard program payment to be $233.41. But what is very interesting is that the payment breakdown he emails me looks exactly like results from the payment calculator available for free on the Department of Education website. You can click here for the free government student loan consolidation calculator.
Broadsword Sales Staff Commission Compensated
From an employment advertisement online it appears Broadsword Student Advantage is looking for sales staff that “puts our customers first and can sympathize with their situation.” That quote will become more interesting as you read on. And it is quite possible that Tim is a commission compensated sales consultant.
The employment advertisement offers “a $250,000 per year potential and a career path at our sister company!”
And that sister company apparently leads to someone becoming a financial advisor.
Sales consultants are compensated with a base pay plus commission. – Source
The fact the sales staff is commission compensated is important for consumers to know because they may be pushed a product that is more in the interest of the sales person earning the commission than as a sound financial decision.
Despite repeated requests for Tim to send me an agreement for their services, which I do not get by the time of this publication, Tim does clearly say in the secret shopper call the $49.95 fee is a monthly fee.
His program estimate says the standard program is for 240 months. The total fee paid would then be a commitment for $11,988. I would be interested to know if the client agreement put the consumer on the hook for the entire amount up front.
The $49.95 a month fee is supposed to be for an added financial planning resource for all sorts of advice, who can also assist with debt settlement.
But let’s look at the true program cost.
If the consumer went directly to the government and consolidated their loans for free they would not have to pay the extra $49.95 monthly fee. Instead, that fee could be applied to their student loans.
If the full $282.95 monthly payment Broadsword Student Advantage asked for was instead paid towards the loan, the 20 year student loan would be repaid in 14 years, saving the consumer 6 years of payments. If those six years of payments were then invested after the loan was paid off early it would be worth $24,932.
Considering the lost rate of return at 6.625% if the $49.95 per month was paid into something with that rate of return, over 20 years it would be worth $24,867.
The loss of that return for the consumer seems to be horrible financial planning advice and how does that put “our customers first and can sympathize with their situation” as they represent in their employment advertisement?
Affordable Life Plans, LLC
An email from Tim tells me the financial planning company is Affordable Life Plans that happens to be located at the exact same address and suite as Broadsword Student Advantage.
7668 Warren Parkway
Frisco, Texas 75034
Interestingly, Affordable Life Plans makes available a document on their website that appears to have been filed with the United States Securities and Exchange Commission that says they do not pay any compensation for client referrals.
Yet part of the $49.95 monthly fee charged by the student loan company is for the Affordable Life Plans service. So does the disclosure indicate that Broadsword Student Advantage is selling the Affordable Life Plans service and receiving no compensation at all?
Affordable Life Plans says “management persons/executive officers; Robert W. Boyd III and Kenneth Leroy Talbert.” – Source
But what is interesting is that public records with the State of Texas reflect the management of the company is Matthew L. Winebrenner and Robert W. Boyd III. State records though say that Kenneth L. Talbert is the organizer of the company. – Source
The website for Affordable Life Plans is also on the same server with the following domains, including the Broadsword Student Advantage sites:
The administrative contact for the Debt Relief Options website is a Bob Boyd. Is it possible that is the same as Robert Boyd with Affordable Life Plans?
The website officeofstudentloans.org sure makes it sound like some special program that is affiliated with the U.S. government but it’s not till the very last line they disclose they are not a government agency. The website seems to just be a sales page and consumers are told to call 800-374-0668, the number for Broadsword Student Advantage. The advertisement appears to indicate there is an advance fee for the service as well.
Broadsword Student Advantage, LLC
State of Texas records state that Kenneth L. Talbert is the registered agent for Broadsword Student Advantage and he is the sole member. – Source
An Issue With Broadsword Student Advantage
Broadsword Student Advantage appears to be marketing and selling a service that the consumer can do for no additional charge directly through their current federal student loan servicer or the Department of Education website.
Other than the upsell or inclusion of an affiliated financial planning product, which most will probably never take advantage of, there appears to be no reason for any consumer to pay for the additional services or fee.
If Broadsword Student Advantage informed clients and potential clients they could consolidate their loans for free, consumers could then make an informed and better educated decision about if participating in the program was in their best interest.
The publication of this article is entirely coincidental to another article that was published yesterday by a former partner of Ken Talbert’s. See Former Dextral Managing Director Shares His Bold Story About Ken Talbert. I had no idea when I started this story that it would lead to some of the same individuals. I just want to make it perfectly clear there was no organization or plan to publish coordinated stories which might appear to be critical of Ken Talbert.
Additionally, it turns out that again, entirely coincidentally, this story also mentions Debt Relief Options. A video I once published about a Debt Relief Options story I wrote was the apparent basis of my YouTube account being suspended because of a complaint about the video. See YouTube Account Terminated – What In The World is Going On?