Parachute Services Archives

Student Loan Update 2026: What Borrowers Need to Know

In the ever-shifting landscape of federal student loans, staying informed is the best way to protect your financial health. Recently, The Institute for College Access & Success (TICAS) released an updated guide, “The Latest Student Loan News: What Borrowers Need to Know,” detailing major changes coming from the U.S. Department of Education.

From the end of the SAVE plan to a temporary pause on wage garnishment, here is everything you need to know about the current state of student loans.

1. The Official Sunsetting of the SAVE Plan

Perhaps the biggest news for millions of borrowers is the official end of the Saving on a Valuable Education (SAVE) plan. Following a court settlement in late 2025, the Department of Education (ED) announced it will no longer enroll new borrowers in SAVE.

Current Borrowers: If you are currently enrolled, expect to be moved into a different repayment plan (such as IBR or the new RAP) in the coming months.
What to do: Log in to your StudentAid.gov account to check your status. The ED and loan servicers are currently reaching out to impacted borrowers with transition guidance.

2. Temporary Reprieve: Pause on Wage Garnishment

In January 2026, a temporary pause was announced on forced collections for defaulted federal student loans. This includes:

Wage garnishment
Seizure of federal tax refunds
Social Security benefit offsets

This pause is intended to give borrowers in default a “fighting chance” to return to good standing before the new Working Families Tax Cuts Act reforms take full effect.

Pro Tip: If you are in default, use this window to consolidate your loans or enter a rehabilitation program immediately. A new “second chance” rule now allows borrowers to rehabilitate a loan for a second time if they’ve defaulted again.

3. Major Changes to Income-Driven Repayment (IDR)

The rules for accessing repayment plans are changing significantly based on your loan disbursement date:

Existing Borrowers (Loans before July 1, 2026)

You will generally retain access to existing income-driven plans like Income-Based Repayment (IBR). Note that IBR rules have been simplified, and you may no longer need to prove “partial financial hardship” to qualify.

New Borrowers (Loans after July 1, 2026)

Options will be more limited. Many new borrowers will be placed into a Standard Repayment Plan based on their loan amount unless they proactively select the new assistance plan.

The New “Repayment Assistance Plan” (RAP)

Expected to launch in July 2026, RAP will set payments between 1% and 10% of your income. While it offers interest subsidies to prevent balance growth, it requires 30 years of payments before loans are forgiven—a longer timeline than previous plans.

4. The Return of the “Tax Bomb”

Borrowers should be prepared for a significant tax change. As of January 1, 2026, debt discharged under IDR plans is once again considered taxable income. The pandemic-era waiver has expired. If you are nearing your 20- or 25-year forgiveness mark, consult a tax professional to plan for the potential IRS bill.

5. Public Service Loan Forgiveness (PSLF) Eligibility

Public service workers must monitor new regulations effective July 1, 2026. New rules allow the Secretary of Education to disqualify employers deemed to have a “substantial illegal purpose.” * This rule is currently being contested in court.

Verify your employer’s status regularly on the PSLF Employer Search tool to ensure your monthly payments continue to count.

How to Take Action Now

The student loan system is in a period of high volatility. To ensure you don’t fall through the cracks, TICAS recommends the following:

Confirm Your Servicer: Many contracts have changed hands. Ensure your contact information is current so you don’t miss transition notices.
Use the Loan Simulator: The tool at StudentAid.gov will help you evaluate your repayment options.
Consolidate Parent PLUS Loans: To access better repayment options, you must consolidate Parent PLUS loans into a Direct Consolidation Loan before July 1, 2026 (we recommend completing this application no later than April, 2026)
Get Expert Guidance: If you’re feeling overwhelmed, reach out to a certified credit counselor for a free session to manage your budget and build a repayment plan.

The Bottom Line: Don’t wait for your servicer to call you. With SAVE disappearing and the tax waiver expired, the choices you make in early 2026 will define your financial trajectory for years to come.

Contact Parachute to schedule a FREE student loan counseling session to develop a personalized plan: https://parachutecreditcounseling.org/services/credit-budget-counseling/#student-loan-counseling

Budget, Debt, Parachute Services

Post-Holiday Budget Hacks for the New Year: It’s Never Too Early!

Post-holiday budget planning is the process of getting your finances back on track after the holiday season. This can be a challenge, especially if you overspent. But, by taking some simple steps, you can get back on the right track and avoid financial stress in the new year.

It can take some time to recover financially after the holidays, but consistency can make a huge difference over time. Be patient with the process and regroup for next year! Additionally, reading this before the New Year of 2026 rings in can also be super helpful for this year’s holiday season.

Smart Tips for Post-Holiday Budgeting

Review Your Spending

The first step is to take a look at your spending and see where your money really went during the holidays. This will help you identify areas where you can cut back in the future. You can use a spreadsheet or budgeting app to track your spending. Take your time and be thorough! It’s research and reflection—not regret.

Pay Down Debt

If you overspent during the holidays, you may have some credit card debt to pay off. Make a plan to pay down this debt as quickly as possible to avoid high interest charges. Pay more than the minimum payments required, if at all possible. Consider using all or part of any tax returns to pay down this debt, as interest on credit cards really adds up!

Revise Your Budget

Once you have a good understanding of your spending and debt, it’s time to revise your budget. Try to consider it a “spending plan” and a useful tool to support your financial wellness. This may involve cutting back on unnecessary expenses or increasing your income on a temporary basis.

Set Financial Goals

Having financial goals will help you stay motivated. Common goals include saving for a down payment on a house, retirement, or a child’s education. Be specific to help them materialize. Write out those goals and look at them frequently to help make them happen!

Planning Ahead and Maximizing Value

Create a Holiday Spending Plan for Next Year

Start thinking about your holiday spending for next year now. This will help you avoid overspending again.

Shop for Deals Throughout the Year

Compare prices at different stores and online before you buy anything. Consider dollar, thrift, and discount/liquidation stores. Take advantage of sales, coupons, and promo codes whenever available.

Leverage Post-Holiday Sales

Many retailers offer deep discounts on leftover holiday merchandise. This is a great time to stock up on items you need for next year at a reduced price. Just be sure to store them in a place you’ll remember!

Manage Unwanted Gifts

Return items: If you received gifts you don’t need, return them for a refund or exchange to get your money back.
Regift: You can regift items you don’t need, but keep a careful inventory of who gave you what to avoid a social mishap!
Sell belongings: If you can’t return an item, consider selling it online or at a garage sale to declutter and make extra cash.

Additional Strategies for Financial Wellness

Cancel Unused Subscriptions

Review your subscriptions and cancel any you’re no longer using. Be honest about what you actually use, including magazine subscriptions, streaming services, and gym memberships.

Automate Your Finances

Set up automatic transfers from your checking account to your savings account each month. This helps you reach your goals without having to think about it. Start small and increase the amount as it becomes feasible.

Use Cash Instead of Credit

When you use cash, you’re much more likely to be mindful of your spending. People tend to spend significantly less when they physically hand over bills.

Review Your Insurance Policies

At the beginning of each year, make sure you’re getting the best possible rates. You may be able to save money by bundling your policies or shopping around for new providers.

Conclusion

Getting back on track financially after the holidays can be challenging, but you’re not alone. There are many resources available to help you, and with a little effort and the right plan, you can start the new year on solid financial footing!

If you’re dealing with high interest debt payments as well, see what you can save with Parachute’s Debt Management Plan:

GET STARTED HERE

Would you like to meet one-on-one with one of our Financial Counselors to talk specifically about your budget? Check out our Financial Coaching Session https://parachutecreditcounseling.org/services/credit-budget-counseling/#financial-coaching or call 716-712-2060.

Budget, Parachute Services

💰 Mindful Spending and Financial Wellness: A Holistic Approach

Mindful spending and financial wellness go hand-in-hand. It’s not just about tracking your expenses; it’s about understanding your relationship with money and aligning your spending with your own personal values and goals.

What is Mindful Spending?

Mindful spending is about making conscious and intentional decisions about how you spend your money. It involves:

Understanding your spending habits: Tracking your expenses, identifying spending triggers, and recognizing your unique spending patterns.
Differentiating between needs and wants: Prioritizing essential expenses while also acknowledging that you deserve to enjoy life.
Considering the long-term impact: Making choices that support your financial goals, such as saving for retirement or paying off debt.
Finding joy in experiences: Prioritizing experiences over material possessions.
Practicing gratitude: Appreciating what you already have and avoiding the “keeping up with the Joneses” mentality. This can be challenging in the days of social media as a “comparison engine.”

How Mindful Spending Contributes to Financial Wellness

When you practice mindful spending, you’re not just saving money; you’re also:

Reducing financial stress: By making conscious choices, you can avoid impulsive purchases and the guilt that often comes with overspending.
Increasing your financial security: Mindful spending helps you build an emergency fund, pay off debt, and save for your future.
Aligning your spending with your values: When you spend mindfully, you’re supporting businesses and causes that align with your beliefs and what is important to you.
Improving your overall well-being: By prioritizing experiences and meaningful purchases, you can enhance your overall quality of life and find greater happiness.

Tips for Practicing Mindful Spending

Create a budget: A budget is a roadmap for your spending. It helps you track your income and expenses, and make sure your spending aligns with your goals.
Practice the 24-hour rule: Before making a major purchase, wait 24 hours to see if you still want it.
Unfollow social media accounts that trigger spending: Social media can be a major source of spending triggers. Unfollow accounts that make you feel inadequate or want to buy things you don’t need.
Find alternative ways to de-stress: Instead of turning to shopping to relieve stress, try exercise, meditation, or spending time in nature or outside.
Focus on experiences: Prioritize experiences over material possessions. Experiences often provide lasting memories and happiness. The desire for material possessions can be fleeting and result in buyer’s remorse.
Practice gratitude: Appreciate what you have and avoid comparing yourself to others.

Mindful spending is a journey, not a destination. It takes time and effort to develop mindful spending habits, but the rewards are well worth it. By practicing mindful spending, you can improve your financial health, reduce stress, and live a more fulfilling life.

If you’re dealing with high interest debt payments as well, see what you can save with Parachute’s Debt Management Plan:

GET STARTED HERE

Credit, Debt, Parachute Services

Overwhelmed by Credit Card Debt? Your Map to Financial Freedom Starts Here.

Overwhelmed by Credit Card Debt? Your Map to Financial Freedom Starts Here.

If you’re reading this, you’re likely one of the millions of people asking: “How do I get out of this credit card debt, and where do I go for help?”

It’s an overwhelming feeling, like free-falling without a safety net. The good news? You are absolutely not alone, and there is a safe landing spot. As certified financial counselors, we hear these questions every single day, and they usually boil down to three key areas.

1. The Most Common Questions We Hear

Is my debt too much?

We often talk to people who fear they’ve crossed some invisible line. The reality is, “too much” debt isn’t defined by a dollar amount, but by its impact on your life. If your minimum payments are eating up your budget, causing you to avoid phone calls, or making you choose between groceries and a payment, then it’s time to act. It’s too much when it controls you.

What’s the best way to pay this off: Snowball or Avalanche?

These are the two most popular DIY (Do-It-Yourself) debt payoff methods:

The Debt Snowball: You focus on paying off the smallest balance first, regardless of the interest rate. Once it’s paid, you roll that payment amount into the next smallest debt. This method is great for motivational wins and building momentum.
The Debt Avalanche: You focus on paying off the debt with the highest interest rate (APR) first. This is the most mathematically efficient method because it saves you the most money in interest charges over time.

Choosing the right method depends on your personality, but remember, any plan you can stick to is the right plan.

Should I consolidate my debt?

Debt consolidation—taking out a new loan to pay off old ones—is a great strategy if you can secure a lower interest rate. It simplifies your payments into one fixed monthly bill. However, if your credit history is shaky, consolidation loans may still come with high rates. This is where professional counseling can provide a safer, more effective alternative.

2. Your Safest Landing: Choosing the Right Help

When debt feels insurmountable, the search for help can lead you down two very different paths. It is crucial to know the difference between proven, consumer-first guidance (like ours) and riskier, for-profit promises.

Option 1: Nonprofit Credit Counseling (The Parachute Approach)

This is your safest, most educational, and credit-preserving path.

What it is: A meeting with a Certified Financial Counselor (free of charge) who reviews your entire financial picture, helps you build a sustainable budget, and explains all your options.
The Debt Management Plan (DMP): If you qualify, your counselor can enroll you in a DMP. This program allows you to combine all your eligible unsecured debts (like credit cards and personal loans) into one manageable monthly payment. We negotiate with your creditors to potentially lower your interest rates, allowing you to pay off your debt in full, typically within five years or less.
Why it works: It pays your debt in full, preserves your credit score better than other options, and most importantly, it comes with the financial education you need to stay debt-free for life.

Option 2: Debt Settlement (The Risky Route)

We generally advise extreme caution with for-profit debt settlement companies.

What it is: A third-party company advises you to stop paying your creditors and instead save money into an escrow account. They then try to negotiate a settlement—a lump sum payment that is less than your total debt.
The Risks:
1. Credit Damage: Stopping payments severely damages your credit score.
2. Fees and Interest: Interest, late fees, and collection calls continue until a settlement is reached, potentially taking years.
3. Taxes: Forgiven debt is often considered taxable income by the IRS, leading to a surprise tax bill.
4. Lawsuits: Creditors may sue you for non-payment before a settlement is ever negotiated.

Feature	Nonprofit Credit Counseling (DMP)	Debt Settlement (For-Profit)
Focus	Education & Repayment in full	Negotiation & Debt reduction
Interest	Works to lower your APR	Interest & fees accumulate
Credit Score	Less damage; helps recovery	Severe damage
Payment Status	Requires on-time payment	Requires stopping payments

Your First Step Today: Take the Jump

You don’t have to navigate this journey alone! The fear comes from not having a plan, and the stress comes from the mounting interest.

At Parachute Credit Counseling, our goal is to give you a clear, safe, and personalized path to debt freedom.

Ready to find out if a Debt Management Plan is right for you?

GET STARTED HERE

Credit, Debt, Parachute Services

Caught in the Debt Spiral? Why Record-High APRs and Inflation Mean You Need a Financial ‘Parachute’ Now

It’s official: U.S. consumer debt has hit a staggering, unprecedented new high.

If you’ve been feeling the pressure of rising costs, you’re not alone. Here at Parachute Credit Counseling, we’re seeing the fallout firsthand. The toxic combination of persistent inflation, soaring living expenses, and credit card Annual Percentage Rates (APRs) stubbornly holding above 22% is creating a dangerous cycle that’s pushing millions of households toward unprecedented financial distress.

The Problem: When Credit Becomes Survival

According to the latest Federal Reserve data, total credit card balances in the U.S. have soared past $1.23 trillion.

While credit cards used to be primarily for “wants,” our certified counselors are reporting a dramatic increase in clients who are using them for basic needs—groceries, gas, and housing—simply because their paychecks can’t keep up with inflation.

As Noelle Carter, President & CEO of Parachute Credit Counseling, explains:

“What we’re seeing is a dramatic shift in how people use credit. It’s no longer about discretionary spending; it’s about survival. When inflation forces families to put groceries on a credit card charging 22% interest, the debt becomes unmanageable very quickly. The interest payments are swallowing up disposable income, making it impossible to save or pay down principal.”

When you’re constantly paying 22% interest on necessary expenses, that debt quickly becomes an anchor, making it feel impossible to get ahead.

Deploy Your Financial Parachute: A Non-Profit Lifeline

The good news is that you don’t have to face this crisis alone. Professional, non-profit credit counseling is a confidential and critical lifeline designed to help you stabilize your financial future.

Parachute Credit Counseling is dedicated to helping you find solutions with personalized, non-judgmental assistance in three key areas:

1. Immediate Relief from High-Interest Debt

Through our Debt Management Plans (DMPs), our certified counselors can work directly with your creditors. The goal is to potentially lower interest rates and consolidate multiple payments into one manageable monthly bill, immediately making debt repayment achievable rather than an impossible burden.

2. Financial Education and Budgeting

We don’t just treat the symptoms; we help you fix the cause. We provide the tools and coaching necessary to stabilize your household budget, understand where your money is going, and ultimately break the reliance on credit to cover basic costs.

3. Targeted Support for Complex Debt

We offer expert guidance on areas beyond general credit card debt, including assistance with complex student loan repayment options. We know that student loan delinquency rates have seen a sharp rise since federal payments resumed, and we can help you navigate these specialized issues.

Don’t Wait for the Crisis to Worsen

If you are struggling to keep up with credit card payments, or if you feel overwhelmed by the prospect of rising debt, please know that confidential help is available.

At Parachute Credit Counseling (formerly Consumer Credit Counseling Service of Buffalo, CCCS), we have been helping individuals and families achieve stability and build better futures since 1965. We provide a non-judgmental environment focused entirely on solutions.

Ready to deploy your financial parachute? Reach out for a free, confidential consultation today.

Home

Budget, Debt, Parachute Services, Relief Programs

Financial Parachute: Essential Money Tips for the Government Shutdown

The news of a government shutdown can send a wave of panic through federal employees and contractors. The uncertainty of a delayed or missed paycheck is stressful, but you are not without options. Having a financial “parachute” plan is the single most important step you can take right now to weather this disruption.

Here is your essential guide to stabilizing your finances and finding immediate relief.

1. Act Fast: Create a Bare-Bones Budget

The first, non-negotiable step is to get a crystal-clear picture of your money. You need a shutdown budget.

Triage Your Spending

Immediately identify and prioritize your “Four Walls” (essential expenses): housing (rent/mortgage), food, utilities, and essential transportation.

Slash Discretionary Spending

Temporarily pause or cut non-essentials. This may include streaming subscriptions, dining out, entertainment, and extra payments toward debt. Every dollar you save now is a dollar you won’t have to borrow later.

Evaluate Your Emergency Fund

Know the exact number of weeks your savings can cover your essential bills. This number provides the clarity you need to move forward.

2. Contact is Key: Talk to Lenders and Creditors

Do not wait until a payment is past due. Financial institutions and service providers are well aware of the situation and often have established assistance programs for affected federal workers.

Financial Institutions

Immediately call your bank or credit union. Many, particularly those that serve the military and federal community (like Navy Federal, USAA, and federal credit unions), offer special support, including:

Interest-Free Paycheck Advance Loans.
Temporary Fee Waivers (e.g., overdraft fees).
No-Penalty CD Withdrawals.

Housing & Loans

Contact your mortgage lender or landlord. Ask about hardship programs, payment forbearance, or temporary payment plans. Do the same for your auto and student loans.

Utilities

Many electric, gas, and water companies offer flexible payment arrangements for customers facing a temporary loss of income.

3. Income Bridges: Explore All Safety Net Resources

While you wait for Congress to reach a deal, look into every available source of financial assistance for federal employees.

Unemployment Insurance (UCFE)

Furloughed federal employees are generally eligible to file for Unemployment Compensation for Federal Employees. Though back pay is usually guaranteed (meaning you’d have to repay the benefits later), filing now can provide crucial income when you need it most.

Non-Profit Assistance

The Federal Employee Education & Assistance Fund (FEEA) often activates emergency grant and loan programs for employees impacted by a shutdown. Search for local community support by dialing 2-1-1 or visiting 211.org.

Temporary Work

Consider short-term, flexible side jobs, often referred to as “gig work,” to generate income and bridge the gap until you receive your back pay.

4. The Last Resort Rule: Protect Your Future

Be extremely cautious when considering solutions that compromise your long-term financial health.

Avoid High-Interest Debt

Stay far away from payday loans or car title loans. The predatory fees will only deepen your financial hole.

Think Twice About TSP/401(k)

Tapping into your Thrift Savings Plan (TSP) or other retirement accounts should only happen as an absolute last resort. Loans or hardship withdrawals can trigger penalties and permanently damage your retirement savings growth.

Your Trusted Guide: How Parachute Credit Counseling Can Help

Facing an income disruption makes you feel like you’re in a financial freefall. That’s where non-profit credit counseling steps in to be your guide.

Certified financial counselors at an organization like Parachute Credit Counseling can provide a non-judgmental, objective view of your situation. They can specifically help you:

Refine Your Shutdown Budget

They’ll work with you to master your cash flow and ensure every dollar goes toward essentials.

Navigate Debt

If you have credit card or other unsecured debt, they can provide debt management solutions and even intercede on your behalf.

Create a Repayment Plan

They’ll help structure a realistic plan for managing bills now and repaying any short-term loans once your back pay arrives, helping you land debt-free.

Don’t wait until the stress becomes overwhelming—reach out for confidential support now at 1-800-926-9685.

By taking these steps proactively, you can deploy a robust financial parachute that protects you and your family until your regular paychecks resume. You have options—use them!

If you’re dealing with high interest debt payments as well, see what you can save with Parachute’s Debt Management Plan: