Author: Stacey Robb

Debt, Student Loans

COVID-19 Student Loan Relief Extended through May 2022

Last week, the U.S. Department of Education announced* a further extension of the COVID-19 emergency relief for student loan repayment, interest, and collections.  The pause was previously extended until January 31, 2022, but an additional 90 day extension was approved through May 1, 2022.

So what does this mean for you?  Eligible** loans have been granted the following relief measures:

    – Suspension of loan payments

This suspension will help 41 million borrowers save $5 billion in student loan payments per month.  There is no fee for this, and your loan servicer will automatically implement the suspension.  There is nothing you need to do on your end!

    – Temporary 0% interest rate

Your loans will not accrue (accumulate) any additional interest until May 2022.  Optional payments made during this time can allow you to pay off your loans faster, and lower the total cost of your loans over time.

    – Stopped collections on defaulted loans

Throughout the emergency relief period, tax refunds will not be withheld, wages will not be garnished, Social Security payments (including disability benefits) will not be withheld, collection calls will stop, billing statements will not be sent, and interest will not accrue.

When your student loan payments are set to resume, you may have some questions on what that will look like for you.  If you are interested in having your federal or private loans evaluated by CCCS of Buffalo’s student loan experts for various options you may have available to you (consolidation, income based repayment, forgiveness, deferment, forbearance, etc.), please give us a call at (716) 712-2060 option 1 to schedule a student loan counseling session!

Resources:

* https://www.ed.gov/news/press-releases/biden-harris-administration-extends-student-loan-pause-through-may-1-2022

** https://studentaid.gov/announcements-events/covid-19/payment-pause-zero-interest#which-loans-eligible

Debt, Student Loans

Student Loans – Huge Changes Coming to Public Service Loan Forgiveness (PSLF)!

On October 6, 2021, the Department of Education announced an overhaul that is coming for the Public Service Loan Forgiveness (PSLF) program for federally backed student loans!  For a limited time (now through October 31, 2022), borrowers may receive credit for past payments made on their student loans that would not have otherwise qualified for PSLF.

 

Key parts to this announcement include:

  • Implementing a limited PSLF waiver to count prior payments
  • Simplifying what it means for a payment to qualify for PSLF
  • Eliminating barriers for military service members to receive PSLF
  • Automatically helping service members and other federal employees access PSLF
  • Reviewing of denied PSLF applications and identifying/correcting errors in PSLF processing
  • Improving outreach and communication with PSLF eligible borrowers
  • Simplifying the PSLF application process
  • Making long term improvements to PSLF through rulemaking


Helpful links:

Press release, fact sheet on PSLF program overhaul

What borrowers need to know: summary of new rules, next steps, FAQs

PSLF help tool

Want to know what this may mean for you?  We at CCCS of Buffalo offer Student Loan Counseling!  To speak with a knowledgeable counselor about your student loan options, please give us a call at (716) 712-2060 today to schedule an appointment!

Budget

Common Financial Pitfalls… and How to Avoid Them!

It’s so easy for so many of us to fall into the trap of the little things that can set us back financially, even when we have the best of intentions to stay committed to our financial goals.  Here are 3 of some very common financial pitfalls, and even more importantly, tips on how to avoid them!

1. Impulsive Spending

Ever go to the grocery store hungry, and find yourself pulling more things off the shelves than you had initially intended?  Do you get a little click-happy when you’re shopping online, then have 10 items in your Amazon cart when you only planned on buying one thing?  Tempted by all the shiny and fun stuff on store endcaps and in checkout lines?  So much of what we buy is on impulse.  You’re not alone, and there are ways to reduce or even eliminate this!

How to avoid: Have a plan!

Don’t go grocery shopping without a pre-planned list (and stick to that list!).  Turn off “one click ordering” on your favorite online shopping sites, so you have an active barrier to just easily ordering whatever you wish (would you be as tempted to spend so much, if you knew you had to actively log in again and re-enter your payment information rather than just clicking a button?).  Set some time aside and make a budget plan for yourself.  Reward yourself when you stick to it (freely or inexpensively, of course!).

2. Using Credit Cards for Emergencies

As much as sometimes it is necessary to use a credit card for an emergency expense, it ideally should not be our first line of defense.  Credit cards can carry such high interest rates (sometimes upwards of 30%!) and if not paid in full, the balance carried over from month to month can grow very quickly.  It’s far better to use savings for emergencies wherever possible, and then use credit cards as an absolute last resort.

How to avoid: Build an emergency savings!

A good goal is to have 3-6 months worth of your monthly expenses in an emergency savings account, but don’t let that goal scare you.  START SMALL!  Saving just $50 a month into a separate savings account will get you to $1,200 in only 2 years (excluding any interest you may earn).  Once you hit a small goal (say, $250 in a savings account), challenge yourself and up your savings by 10% and see how much more quickly you can hit your next goal.  It may even be fun…!

3. Ignoring Your Retirement Fund

Planning for retirement should be part of your long term financial goals.  It takes more and more money for people to be able to retire comfortably, and if you’re not prepared, you just may end up having to work a lot longer than you had initially hoped for.

How to avoid: Start saving NOW!

It’s never too late to start!  Does your employer sponsor a retirement plan such as a 401(k) or 403(b)?  Start contributing to it TODAY!  Be sure to ask if your employer participates in company matching, and maximize your contribution to get the most out of this benefit.  Every little bit helps.  Don’t fall into the mindset where you feel like since you can’t contribute a high % of your income then it’s not worth it.  It is absolutely worth it, and even 1% of your income is better than 0%.  It helps you get into the habit of saving, and it adds up faster than you’d think!

To speak with a knowledgeable financial counselor about how to make your money situation work for you, give us a call at (716) 712-2060 today!  CCCS of Buffalo is committed to assisting our community in meeting your financial needs!

Budget

Financial Tips from CCCS Staff – Part 1

CCCS of Buffalo provides financial education and financial literacy resources to the community.


  • Our Mission: We provide our community with the best strategies to master their credit.
  • Our Vision: We are the most recognized financial counseling agency in our community that minimizes the stigma associated with debt.
  • Our Values: Integrity, Professionalism, Empowerment, Innovation


Our staff at CCCS are committed to the collective mission of our agency, and we hope that these tips for financial success from our team may help you manage your finances in a better way!

 

“An easy way to pay off your mortgage early is to send in an extra payment each year.  That payment goes straight to principal.  You can save about nine years of mortgage payments!  It works the same way as a bi-weekly mortgage, but without the commitment.”

            ~ Therese Melchiorre, Certified Financial Counselor

 

“Having trouble starting a savings fund?  Why not start little!  If you are a person who uses cash, start putting away $1 bills.  Every time you receive a $1 bill, put it away into savings.  Over time, you will find that the dollars add up!  The next year, try changing it to $5 bills.”

            ~ Krysten Goins-Singletary, Client Support Specialist

 

“Reconcile your checking account each month, especially young adults.  It’s easy to swipe and never look at your statements.  Reviewing these regularly can help reveal patterns of where you may be overspending, and can identify potential errors.”

            ~ Mike Florczak, Certified Financial Counselor

 

“Remain optimistic!  Although at times it can be very difficult and stressful managing our personal finances, try and stay positive and optimistic.  Life will throw many things at us, and in our financial lives, many problems can arise.  Think long term and big picture in order to weather the storm and get back on track.”

            ~ Robby Dunn, Vice President of Counseling

 

“One of the things that I like to do is have a separate account for paying bills and a separate account for fun.  This way I know all the bills are paid and if I have extra money in the fun account we can go out, and if not then we stay home!  I also track all my bills in an Excel spreadsheet according to how I get paid, and this way I know what to pay and when.”

            ~ Jaime Bergeron, Counseling Intake Specialist

 

Call us today at (716) 712-2060 to learn more about the services we offer, or to schedule an appointment with one of our highly qualified and knowledgeable staff!

Debt

Debt Management FAQs – Part 2

What types of debts can be included in a Debt Management Plan (DMP)?

You would be able to include any credit cards, personal loans, medical bills, or collection accounts.

What types of debts CANNOT be included in a DMP?

You would not be able to include student loans, mortgage, auto loans, or personal loans that are secured by collateral.

What are the costs associated with a DMP?

There is a monthly service charge of $35* (included in your monthly payment to us), and a one time initial set-up fee of $55* (payable with your first month’s payment only).  Unlike a debt settlement or debt relief agency, we do not charge fees based on a percentage of your debt, and the fees are nominal to cover administrative costs only, as we are a non-profit.  There are no “hidden” fees.  The only other fee you would ever see from CCCS is if your payment was returned (bounced check or returned ACH), and the amount of that fee is $25.

*The amount of the monthly service charge and set-up fee may vary depending on state requirements; however, the maximum amounts are $35 and $55, respectively.

Can I use my credit cards while enrolled in a DMP?

Any account that goes on your plan will be automatically closed out by your creditors, and you will just be paying down the balance.  Creditors reduce your interest rates and your minimum payments, so the “trade off” is that the account will be closed for future purchases.  The overall objective of a DMP is to be free from all unsecured debt, so the continued use of credit cards while on the program would be counterproductive.  If you did need to leave an account off the plan for any reason (needed for emergencies, medical expenses, home repairs, etc.), please speak with your counselor and they will be able to help you determine what your best course of action would be for your situation.

How long does a DMP last?

DMPs are designed to be paid off with regular monthly payments over the course of approximately 3 to 5 years (60 months, or 5 years, being the maximum allowed by the NFCC National Foundation for Credit Counseling).

Is a DMP a legal contract?

No.  There is no commitment, as a DMP agreement is open-ended.  You can stop your DMP at any time, and your creditors would just go back to your initial terms.  There is no penalty from CCCS to terminate a DMP.

How can I get started?

Give us a call at (716) 712-2060 to schedule a Financial Counseling Session.  You and your counselor will review your financial situation and determine what debt repayment option will make the most sense for you and your situation, and go over the details of what a DMP will look like for you.  Alternatively, you can complete our online application (click here!) and a counselor will review your situation and put together an assessment that you will be emailed within 3-5 business days.  You can then work with your counselor directly to go over your assessment and get enrolled in a DMP.  Ultimately we have YOUR best interest in mind and are here to help you!  So contact CCCS of Buffalo, Your Money Mentors, today and take that first step toward financial freedom!

Debt

Debt Management FAQs – Part 1

What exactly is a Debt Management Plan?
A debt management plan, usually just referred to as a “DMP,” is a partnership between you and CCCS of Buffalo to systematically pay down your outstanding debt through monthly payments. You would make one monthly payment directly to us, and we then disburse those funds out to your creditors each month. On a plan, you can include any unsecured debt – so credit cards, personal loans, medical bills, or collection accounts.
Why is a DMP something I’d want to participate in?
Well, there are several benefits to doing so! First, we work with your creditors to get you a lower interest rate. Depending on the creditor and the type of debt, interest rates are typically reduced to around 0-10%. We work with the creditors to make an arrangement for them to accept a lower monthly minimum payment from you, which ultimately puts more money back into your pockets on a monthly basis. Once enrolled into a DMP, creditors typically stop charging late and over limit fees, and you will no longer receive collection calls.
Many would agree that the convenience of having only one monthly payment, rather than having to pay several creditors individually, is one of the biggest benefits of doing a DMP – but the ultimate benefit is the fact that you will be DEBT FREE in 5 years or less!
How would a DMP affect my credit score?
The good news is, there is no direct impact to your credit score by enrolling into a DMP. You may see an initial drop in your credit score due to the fact that there are some changes to how your credit is reported. First, any account going on the plan will be closed out by your creditors. If you had available credit on those accounts, it wouldn’t be available to you anymore – you would just be paying down the balance. Additionally, if you include longstanding accounts on the plan, since those would be closed, it could shorten the average age of your credit history.
Another bit of good news is that we do typically see credit scores increase within about 6-12 months of being on the plan, provided that you’re making on time payments to us and also to any other credit obligations you may have outside of the plan (like your mortgage, student loans, or car payment).
How does this get reported?
Some creditors may report that you are enrolled in a DMP and repaying your debts through a third party. This could be viewed as either a negative or a positive, depending how creditors choose to interpret this information. The idea of having a notation on your credit history may initially raise a red flag for you; however, this notation may suggest to lenders that you are actively working to pay all of your debts, in full, to the best of your ability.
DMPs are designed to be paid off with regular monthly payments over the course of approximately 3 to 5 years (60 months, or 5 years, being the maximum allowed by the National Foundation for Credit Counseling). These timely payments, over the course of your DMP, will have a very positive impact on your payment history. The lower your credit score initially, the more your credit will ultimately improve by enrolling on a plan.
How much would my monthly payment be?
This depends on who your creditors are, what your balances are, what they would accept on a plan from us. Your payment would include our monthly service fee (which is nominal due to the fact that we are a nonprofit organization). Most people find that their monthly payment on a DMP is significantly lower than what it would be had they continued to make minimum payments on their own.
How do I know if this is the right solution for me?
The truth is, there are many options for debt repayment out there, and a DMP may not be the right fit for everyone. In order to find out what a plan would look like for you, and receive professional advice on whether or not it would be beneficial to you, we would recommend scheduling a Financial Counseling Session with one of our qualified credit counselors.
How can I get started?
Give us a call at (716) 712-2060 to schedule a Financial Counseling Session!
You and your counselor will review your finances and determine what debt repayment option will make the most sense for you and your situation, and go over the details of what a DMP will look like for you.
Alternatively, you can complete our online application (click here!) and a counselor will review your situation and put together an assessment that you will be emailed within 3-5 business days. You can then work with your counselor directly to go over your assessment and get enrolled in a DMP. Ultimately we have YOUR best interest in mind and are here to help you! So contact CCCS of Buffalo, Your Money Mentors, today and take that first step toward financial freedom!