CCCS Launches New, FREE Student Loan Counseling Program; Joins the Education Debt Consumer Assistance Program (EDCAP) Network

CCCS Launches New, FREE Student Loan Counseling Program; Joins the Education Debt Consumer Assistance Program (EDCAP) Network

Will Help Local Borrowers Access Loan Forgiveness & Navigate Complex Student Loan Repayment System

Shortly after the federal government kicked off their student loan forgiveness application process, Consumer Credit Counseling Service (CCCS) announced their newly redesigned, cost free Student Loan Counseling Program to assist local borrowers. While the government’s process is meant to be simple, the complexities of student loans often cause uncertainty, anxiety and frustration.

For the past ten years, CCCS has operated the only Student Loan Counseling Program in Western New York, helping thousands of besieged borrowers tackle what many felt was insurmountable debt. Student loan repayment has long been an obstacle for a significant percentage of the population, particularly for younger people. 45% of 18-35 year olds  currently have student loan debt in New York State. Right now, 2.4 million New York State residents have outstanding loans; a total cumulative debt of over $90 billion.  

In October, the Education Debt Consumer Assistance Program (EDCAP) invited CCCS to join their statewide network after the New York State Legislature increased their funding specifically designated for New York State residents with higher education debt. EDCAP–a program of the Community Service Society of New York (CSS)—and CSS work to make New York State more livable for people facing economic insecurity. CSS created EDCAP as an initiative to help New Yorkers struggling with student debt to navigate the student loan repayment system and regain financial health. In addition to CCCS, EDCAP selected nine other partner organizations throughout the state to serve all of its geographic areas. Seven of these organizations focus on legal services and the other organization is a United Way, indicating that CCCS offers unique and highly regarded services.

CCCS’ collaboration with EDCAP provides CCCS with much needed funding to deliver all student loan counseling services free of charge to WNY residents. EDCAP, in turn, gets a greater and more direct geographic reach into a targeted area. The NYS Department of Financial Services will oversee this project which comes at “a critical time as borrowers navigate the complex student loan repayment system, try to benefit from the latest relief available, and prepare for payment resumption.” EDCAP

A slew of information—including announcements of major, sweeping, long awaited changes to student loan forgiveness that require specific, precise action steps–has steadily flowed recently. We designed our Student Loan Counseling Program to guide borrowers through the complicated process that is frequently intricate and quite possibly thorny. Experienced, Certified Financial Counselors understand that many of those coming for help feel overwhelmed, are confused or just plain over it…and are ready to help all. Our new partnership with EDCAP will allow us to serve even more people. We urge everyone to take positive action that will promote financial stability…Contact us at 716-712-2060 or www.consumercreditbuffalo.org for help with student loans or for any type of financial issues. 

Details of President Biden’s New Student Loan Forgiveness Program; Announces Final Extension to Student Loan Repayment Program

Millions of Americans have waited eagerly over these past two and a half years for student loan forgiveness.

This week, President Biden issued the first of his student loan forgiveness plans. For those earning less than $125,000 a year—or couples with incomes under $250,000–up to $10,000 in federal student loan debt will be forgiven. If individuals used Pell grants to attend college (which are reserved for students with greatest financial need), up to $20,000 in federal student loan debt will be forgiven.  

President Biden also this week officially extended the “student loan payment pause” until December 31st, 2022. Interest rates will remain at 0% until repayments start in January 2023. Biden states that this will be the last extension for student loan payments.

 Mandatory student loan payments as well as interest accrual have been “on pause” since March 13, 2020, the beginning of the pandemic. 98.8% of borrowers did not make payments during this time period but those who did can receive refunds for their payments by calling their loan servicers directly. About 37 million student loan borrowers skipped nearly $200 million in payments during the pause, according to the Federal Reserve Bank of New York.

Immediately after President Biden’s announcement, Consumer Credit Counseling Service (CCCS) encouraged area residents to contact them at 716-712-2060 or www.consumercreditbuffalo.org for help with student loans or for any type of financial issues.  With just about 70% of college graduates leaving school with student loan debt, it is certain that student loans will continue to be part of the landscape for much of the WNY community. Last year, the average per person debt was $35,397 and the typical monthly payment–$393 per month. At current time, nearly 2.4 million New Yorkers have outstanding student loans totaling more than $90 billion combined.

 CCCS operates the only Student Loan Counseling Program in all of Western New York and designed its program to specifically meet the needs of the growing population segment of student loan borrowers. CCCS Certified Financial Counselors understand that many of those coming for help feel overwhelmed with anxiety and fear and often see individuals who have fallen prey to the abundance of unscrupulous companies claiming to help. CCCS urges everyone to take positive action that will promote financial stability: For those interested in any type of help–call 716-712-2060 or visit www.consumercreditbuffalo.org  

A New Approach to Tackling Debt is Needed

At Consumer Credit Counseling Service of Buffalo (CCCS), we are encouraged to see recent media attention highlighting the dubious and predatory practices of local debt collection companies. The New York State Attorney General herself visited Western New York last month to call for increased regulation of the debt collection industry. It is extremely heartening to see how she is standing up for New York residents who are often victimized (sometimes repeatedly) by dodgy businesses with underhanded motives.

CCCS has sought reform for many years — and heard hundreds of tragic horror stories — yet as critical as it is, we have been unable to attract the proper attention or receive the necessary support for this issue until now.

Debt collection companies are commonly problematic — in certain need of increased control — but the issue is much larger than just that. The average person has little understanding of the world of debt, credit and credit repair. It is no wonder that an entire world of debt consolidation and debt settlement has emerged to “help” consumers manage their debt.

If you are having problems with credit and debt, it is usually a tumultuous time in your life. You may be backed into a corner — desperate — and not sure what to do. If you google “How can I get out of credit card debt in Buffalo?” you will find nearly 30 for profit companies willing to help you “settle your debt.”

It is time for a new approach.

Debt has long been a huge problem for Americans. Currently 35% of Americans carry credit card debt from month to month with $15,561 as the average credit card debt per household. Debt is not simply a financial problem; it impacts emotional health and regularly leads to frustration, depression, embarrassment and the pervasive feeling of being completely overwhelmed.

At the same time, lack of credit similarly causes stress for countless individuals. 47% of Americans presently have low or no credit meaning they are locked out of access to safe credit, driving them into the hands of an alternate economy filled with usurious payday lenders. Without good credit, consumers pay higher interest rates on everything from credit cards to car loans to mortgages. Credit scores also play a leading role in setting home and auto insurance premiums.

In Western New York, approximately 40% of residents have either low credit or no credit. Having no credit can be as bad as having poor credit, possibly even worse because there are extremely limited resources available to help individuals establish credit. The general public is poorly educated in this area. People with poor credit, no credit or debt are worried, scared…and just want the problem to go away. They easily fall prey to the seductive messaging of settlement companies with unlimited advertising budgets.

Financial experts across the world unilaterally agree that best method to systematically pay down outstanding debt is through a Debt Management Program offered by an accredited nonprofit Credit Counseling agency, like CCCS, where certified credit counselors work in cooperation with creditors. Sadly, countless people suffer because too many people are attracted to the companies that peddle illusions. Better, safer and far more helpful options like debt management programs, run by nonprofit organizations with no advertising budgets, remain under the radar. We must make the general public aware that there are options; that there is hope…all they need to do is call us at 716-712-2060.

We truly appreciate New York State’s recent push to hold debt collection companies accountable and hope that it is just the beginning of wider efforts to help the public navigate the challenging financial world around them. CCCS is here to help all those who need us.

-Originally published in the Niagara Gazette

Loan Cancellation for Student Loan Borrowers Who Attended Corinthian Colleges

Today, the U.S. Department of Education announced the cancellation of $5.8 billion in federal student loans for 560,000 individuals who borrowed to attend schools owned by Corinthian Colleges, the for-profit college conglomerate that is now defunct.

Corinthian was a notorious repeat offender that defrauded its students and the public over many years.

This loan cancellation would not have been possible without the tenacity of so many individual student loan borrowers harmed by Corinthian’s tactics. Many of them came forward to law enforcement agencies and regulators to detail systemic abuses. Others even had the courage to make their stories public to urge government authorities to act, rather than sitting on the sidelines. Over the last decade, I had the opportunity to speak with many of them to learn about Corinthian’s conduct.

The Consumer Financial Protection Bureau and state attorney general actively pursued Corinthian for its misconduct. The CFPB filed a lawsuit in 2014, obtained a default judgement and secured $480 million in private student loan cancellation in 2015, and won another $183 million in loan cancellation in 2017. In 2016, then-California Attorney General Kamala Harris won a $1.1 billion judgement against Corinthian. Many other state attorneys general across the country also took actions to hold the company accountable for its wrongdoing.

The decision to automatically cancel these loans will be a lifeline to so many Americans whose financial lives were ruined by Corinthian Colleges. While they will never get back the time they lost, they will receive the relief under the law that they have long been owed.


via www.consumerfinance.gov


Most Medical Debt to Be Removed from Credit Reports; Student Loan Repayments Extended Until August 31st

CCCS Announces that Most Medical Debt to Be Removed from Credit Reports; Student Loan Repayments Extended Until August 31st

In a recent and welcomed policy shift, Equifax, Experian, and TransUnion announced that nearly 70% of current medical debt will be removed from credit reports, beginning this summer.

Millions of Americans are saddled with medical debt and the problem continues to grow. Studies from 2021 found that 37% of Americans had medical debt, while 23% did not currently have medical debt but had it in the past. The Consumer Financial Protection Bureau (CFPB) estimates that at this moment, some $88 billion in medical bills sits on 43 million credit reports. Equifax, Experian, and TransUnion Medical maintain reports on more than 200 million people in the U.S. Often, medical bills can be exorbitant and end up on credit reports, ruining credit scores and preventing people from accessing mortgages, car loans and even employment. Many of these people have paid their bills on time for their entire lives until forced into medical debt.

Expanding on their new policies, the three credit reporting firms have further stated that debt that was paid after it was sent to collections will be removed beginning this July. At the present time, even if these debts are paid off, they may remain on a consumer’s credit report for up to seven years. Under the companies’ new guidelines, new unpaid medical debts won’t get added to credit reports for a full year after being sent to collections—and unpaid medical debts of less than $500 will be removed in the first half of 2023. It is expected that the $500 threshold may rise.

These significant changes in the reporting of medical debt are likely due to the ongoing pressure exerted by the Consumer Financial Protection Bureau (CFPB), which earlier in March publicized that it would begin to hold credit reporting firms accountable for reporting erroneous medical debts.

The CFPB has also released research that indicates medical debt is less predictive of a person’s ability to repay than other kinds of loans.

The U.S. credit reporting system—including Equifax, Experian, and TransUnion—plays an inordinate role in determining who gets credit and who doesn’t. This is exacerbated by the fact that consumers have very little control over what is added to their credit reports which rely on information submitted by lenders, collections firms and others.

The CFPB said consumers submit more complaints to the agency about credit-report errors than any other problem and seldom receive any relief. They have made changes in the credit reporting system a major priority and the impact will be felt by consumers as early as this summer.

And while student loan forgiveness is still up in the air, the pause on student loan repayment has been extended through August 2022. Borrowers will not be asked to make payments until after Aug. 31 and interest rates are expected to remain at 0% during that period.

Anxiety was rising for many until the April 5th announcement of the extension of student loan repayments. Prior to the announcement, payments were planned to resume on May 1, 2022. For the past two years, most student loan borrowers have not been required to make payments on their balances and their interest rate has been frozen.

 

White House officials have repeatedly stressed that they would like to resolve the student loan forgiveness issue prior to the resumption of repayments, but discussions are still ongoing.

In a recent survey by the Student Debt Crisis Center, 92% of fully-employed borrowers are concerned about being able to afford their payments due to rising inflation. One in three borrowers claimed they’ve reduced spending on necessities like food, rent and healthcare in preparation for payments to resume.

With about 70% of college graduates leaving school with student loan debt, it is certain that student loans will continue to be part of the landscape for much of the WNY community. Last year, the average per person debt was $35,397 and the typical monthly payment–$393 per month. At current time, nearly 2.4 million New Yorkers have outstanding student loans totaling more than $90 billion combined.

Consumer Credit Counseling Service (CCCS) encourages anyone interested in reviewing or repairing their credit or looking for help navigating student loan repayments to contact them at 712-2060 or visit www.consumercreditbuffalo.org. CCCS is the only provider of student loan counseling in the region and has worked with hundreds of area residents struggling with all kinds of debt over the past several years.

 

Many individuals with credit card debt and/or student loans feel overwhelmed with anxiety and fear as they try to set up payment plans, with some falling prey to the abundance of unscrupulous companies claiming to help. CCCS specifically designed its program to meet the needs of this ever growing population segment.

 

CCCS can help with all financial issues and urges everyone to take positive action that will promote financial stability: For those interested in any type of help–call 712-2060 or visit www.consumercreditbuffalo.org 

Student Loan Payment Pause Extended Through Aug. 31, 2022

On April 6, 2022, the U.S. Department of Education (ED) extended the student loan payment pause through Aug. 31, 2022.

The pause includes the following relief measures for eligible federal loans:

·         a suspension of loan payments

·         a 0% interest rate

·         stopped collections on defaulted loans

Here are four steps to make sure you’re prepared for student loan payments to resume:

·         Update your contact information in your profile on your loan servicer’s website and in your StudentAid.gov profile.

·         Review your auto-debit enrollment or sign up for the first time. To do so, log in to your loan servicer’s website or contact your loan servicer directly.

·         Check out Loan Simulator to find a repayment plan that meets your needs and goals or to decide whether to consolidate.

·         Consider applying for an income-driven repayment (IDR) plan. An IDR plan can make your payments more affordable, depending on your income and family size.

You can always contact us at CCCS of Buffalo to help with your student loan questions and concerns! www.consumercreditbuffalo.org716-712-2060

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

Zombie Debt: Run, Hide or Stand Your Ground?

Have you received a call or letter demanding you pay an old debt that either you forgot about, paid off, or is simply not yours? AHH! You may be a victim of “zombie debt collection”.

Zombie debts typically show up for various reasons:

1.      Sometimes they are debts that are either very old and/or no longer owed – past the statute of limitations (SOL) for legal action in your state, which is usually between three and six years. 

2.     You may have forgotten about the debt or had previously settled on the debt with either the original creditor or another collection agency.

3.     The debt is a result of identity theft.

4.     You filed the debt with a bankruptcy filing and it was discharged.

The biggest issue with these zombie debts is that individuals are pressured into paying the debt, which they may not even need to pay! The first step is not to acknowledge the debt, but request verification that the debt is in fact yours, and that you may be required to pay. Let the collector know that you would like to “validate” the debt prior to discussing it any further; obtain their name and address…then hang up the phone and end the conversation.

o       Send a debt validation letter, certified return receipt requested (this way you know they received it). The collection agency will have to give you proof of the debt, such as the original creditor with account number, the original balance when it was sent to collections, any interest or fees that have been charged, along with any payments applied to the debt since being sent to collections. They must also provide you information on how you can continue to dispute the debt, if necessary.

BEWARE! Be advised that if you acknowledge that you owe a debt, or agree to make a payment for any amount, then it could reset the statute of limitation and you could be legally responsible for this bill, even if it’s not yours. 

Keep your zombie debts in their grave this year!

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!

Student Loans: Their Current State & What to do Next

Student Loans: Their Current State & What to do Next

At the onset of the pandemic, in anticipation of economic challenges and concerns looming for nearly 43 million loan borrowers, student loan assistance came when legislation passed within the CARES Act, providing a student loan payment pause and interest waiver through September 30, 2020 on federal education loans held by the U.S Department of Education. Fast forward over one year, three extensions later, and federal student loans are at a standstill. We want to recap the current relief that is available on student loans, as well share some strategies you can take now, and going forward as the relief expires.

Current Relief Available:

  • Interest and monthly payments on federally held loans are suspended through September 30, 2021.
  • You do not need to contact your student loan servicer or take any action on your federally held student loans.
  • Make sure your servicer has up-to-date contact information and check your mail or email so you can receive any updates or information about your loans.
  • Suspended payments through September 30, 2021 will count towards any student loan forgiveness program, as long as all other requirements of the loan forgiveness program are met.
  • The Department of Education has stopped the collection of defaulted federal student loans.
  • Private student loans are not covered by the COVID-19 emergency relief assistance

What strategies can you take at this time?

·         During this continued period of 0% interest until September 30, 2021, you can make payments which will be fully applied to the principal balance. If you are in the financial position to do so, this is encouraged, as it is always a good thing to pay down on 0% interest loan! (Albeit temporary)

·         If you are concerned about more pressing household expenses such as your mortgage, rent, insurances, medical, utilities and groceries; you may want to consider taking advantage of the student loan payment suspension to ensure that you are able to cover your basic needs during this time of uncertainty.

·         Another reason to take advantage of the student loan payment suspension is if you currently lack sufficient savings. Have some savings can be the catalyst in protecting you in the event of financial emergency, avoiding debt, as well as reducing your financial stress.

Preparing for Repayment to Resume:

·         When the payment suspension ends, you’ll receive your billing statement or other notice at least 21 days before your payment is due.

·         Check out the new tool, Loan Simulator on https://studentaid.gov/loan-simulator/ to find a repayment plan that meets your needs and goals, or to decide whether to consolidate your loans. Loan Simulator can help you estimate payments under a variety of repayment plans, including income-driven repayment (IDR) plans.

·         How can you find out how much your payments will be when payments restart? To find out what your payment amount will be, you will want to contact your loan servicer, as they are your official source for up-to-date information about your loan and repayment.

·         Are you concerned that your student loan payment will be too high when payments resume? You may be eligible to lower your monthly student loan payment by enrolling in an income-driven repayment plan. Under an IDR plan, payments may be as low as $0 per month.

 The best thing you can do at this time is review your student loans and ensure that you have a game plan for when the current student loan relief expires. Contact us for a Student Loan Counseling session if you need help managing your student loans! (716) 712-2060