Academic counseling is a collaborative process that addresses the needs, problems, and interests of higher education students. The objective of the study was to investigate perceived problems and academic counseling benefits for students and teachers at Madda Walabu University in Ethiopia. Cross-sectional research design using quantitative methods was applied. The study selected 605 students as participants using a multi-stage sampling method. Results showed that nearly half of the students (49.9%) reported that they could benefit from academic counseling services. According to them, educational counseling improves anxiety management (66.3%), educational goal setting (69.4%) and time management (66.6%). Moreover, academic counseling turned out to be predictive for students' academic success. However, the strength of the relationship also depended on the students' socio-demographic factors. This study indicated that more than half of Madda Walabu University students had problems related to managing their time. Additionally, the students believed that academic counseling would benefit students and teachers in enhancing interpersonal relationships, improving study skills, goal setting, and understanding and managing diversity. The Ethiopian Ministry of Education and Madda Walabu University administrators need to understand the significance of academic counseling for students' academic performance. They should introduce a necessary intervention strategy that ensures students' academic success.