Category: Parachute Services

Parachute Services, Student Loans

Student Loan Update

45% of 18-35 Year Old NYS Residents Have Student Loan Debt

Bad News: Proposed Loan Forgiveness Program Struck Down by Supreme Court

Payments to Resume on October 1st

Good News: 12 Month Grace Period: Borrowers Will Not Be Penalized for Missing Payments

Income Driven Repayment (IDR) Plan Adjustment Extended BUT Help May Be Needed

Parachute Credit Counseling Offers FREE Assistance and Counseling, can help with IDR

Millions of Americans will soon resume paying their student loans, whether they want to or not. In a 6-3 decision on June 30th, the Supreme Court rejected the much hoped for, yet controversial, student loan forgiveness proposal.

There is hope that there may be other methods to facilitate student loan forgiveness but for now, there is much disappointment as interest will once again begin accruing on loan outstanding balances this September. Then, on October 1st, payments resume and 44 million Americans will be paying an average of $210 to $314 each month toward their loan balances (according to Wells Fargo).

In an effort to ease the transition to monthly payments, President Biden and the U.S. Department of Education stated that there will be a 12-month “on-ramp” period starting in October where “missed, partial, or late payments will not lead to negative credit reporting, default, or loans being sent to collection agencies.”

For the past three years, borrowers have had a pause in their student loan payments—with no interest accruing–due to the pandemic. This break let those with loans stay current on other bills and obligations, pay down other debt, or for some, build up their savings.  The resumption of loan payments is expected to have an adverse economic impact with a slow down in overall spending and an increase in defaults and forebearances. Never in the history of the federal student loan system have over 40 million borrowers simultaneously resumed repayment after a three-year hiatus.

According to the Consumer Financial Protection Bureau (CFPB), about 20% of student loan borrowers have risk factors that indicate they could struggle when payments resume. More than 1 in 13 student loan borrowers are currently behind on other payment obligations, a rate higher than before the student loan pause started in March 2020 during the pandemic.

Student loan borrowers owe more in other debts now as well. The CFPB found that median scheduled payments on other debt obligations have increased by 24% for borrowers whose student loans will soon become due. In percentage terms, those increases are especially notable for younger borrowers—a whopping 252% increase from $65 to $229.

Income Driven Repayment (IDR) Plan/IDR Account Adjustment

Although student loan forgiveness is not imminent, there are positive options available for student loan borrowers. One of these is the the Income Driven Repayment (IDR) Plan/IDR Account Adjustment which was recently extended until December 31, 2023. Income Driven Repayment (IDR) Plans allow borrowers to make payments on their federal student loans according to a formula based on their income and family size—the payments are deliberately meant to be smaller. Ostensibly this program had been in place prior to the pandemic but there were major issues with it, resulting in few people actually receiving the proper help to enroll in this program.

Last year, the U.S. Department of Education implemented IDR Account Adjustment to help student loan borrowers benefit from the program as it was initially intended. The Department worked to remove the confusion surrounding the program, making it more accessible and available to student loan borrowers. It also conducted a one-time adjustment of IDR payments to address past inaccuracies and improved their previous subpar tracking procedures.

In final good news, there is no application required for the IDR Account Adjustment. Borrowers will automatically receive the benefits. A critical element, however, is that borrowers with non-Direct and non-government-held federal student loans need to consolidate those loans into the federal Direct consolidation program in order to benefit from the IDR Account Adjustment.

The U.S. Department of Education advises: “Borrowers who have commercially managed FFEL, Perkins, or Health Education Assistance Loan Program loans should apply for a Direct Consolidation Loan by the end of 2023 to get the full benefits of the one-time account adjustment.” Additional info available here: https://studentaid.gov/announcements-events/idr-account-adjustment

Parachute Credit Counseling—formerly known as Consumer Credit Counseling Service of Buffalo (CCCS)— recently announced that they are now offering free Student Loan Counseling throughout the eight counties of Western New York along with expert strategies for attaining financial stability.

The experienced, certified financial counselors at Parachute will help WNY residents consolidate their loans and review other potential relief options and changes to existing programs available to help borrowers reduce or eliminate their debt. Now is the time for borrowers to seek free and unbiased counseling.

Call 716-712-2060 or visit https://parachutecreditcounseling.org/services/ for more information on our Student Loan Counseling Program and other financial counseling services we provide.

Budget, Debt, Parachute Services

National Financial Freedom Day: A Day to Celebrate Financial Independence

National Financial Freedom Day is observed on July 1st every year. The holiday aims to raise awareness about financial freedom, which is the ability to afford the kind of life you desire without having to worry about financial constraints. There are many things you can do to achieve financial freedom, such as:

  • Pay off debt. This is one of the most important steps you can take to improve your financial situation. The less debt you have, the more money you will have available to save and invest.
  • Build an emergency fund. This is a savings account that you can use to cover unexpected expenses, such as a unexpected car expense or medical bill. Having an emergency fund will help you avoid going into debt when unexpected expenses arise.
  • Invest for the future. Once you have paid off debt and built an emergency fund, you can start investing your money. Investing can help you grow your wealth over time and reach your financial goals. There are many different ways to invest, so you can choose an option that is right for you. Some popular investment options include stocks, bonds, and mutual funds.

Achieving financial freedom takes time and effort, but it is possible. By following these tips, you can take steps to improve your financial situation and achieve financial independence:

  • Create a budget and stick to it. This will help you track your spending and make sure you are not overspending.
  • Live below your means. This means spending less money than you earn.
  • Save money regularly. Even if you can only save a small amount each month, it will add up over time.
  • Invest your money wisely. Do your research and choose investments that are right for you.
  • Be patient. It takes time to achieve financial freedom. Don’t get discouraged if you don’t see results immediately.

National Financial Freedom Day is a day to celebrate your progress and to recommit to your financial goals. We at Parachute are here to help you do just that! Give us a call at 716-712-2060 to schedule an appointment to speak with one of our skilled counselors who can help you determine steps you can take to achieve financial freedom and live the life you desire!

Credit, Debt, Parachute Services

How to Improve Your Credit Score

Your credit score is a number that lenders use to assess your creditworthiness. It is based on a variety of factors, including your payment history, the amount of debt you have, and the length of your credit history. A good credit score can help you get approved for loans and credit cards with lower interest rates, which can save you money in the long run.

There are a few things you can do to improve your credit score:

  • Pay your bills on time. This is the most important factor in determining your credit score. Make sure to pay your bills in full and on time each month.
  • Keep your credit utilization low. Credit utilization is the amount of debt you have compared to your total available credit. Aim to keep your credit utilization below 30%.
  • Avoid opening too many new accounts. Hard inquiries, which are requests for new credit, can temporarily lower your credit score. Try to limit the number of new accounts you open each year.
  • Get a copy of your credit report and dispute any errors. Review your credit report for any errors, such as accounts that are not yours or late payments that you did not make. Dispute any errors with the credit bureaus.

Improving your credit score takes time and effort, but it is worth it in the long run. By following these tips, you can improve your credit score and get the best possible terms on loans and credit cards.

Here are some additional tips to help you improve your credit score:

  • Get a secured credit card. A secured credit card is a good option for people with bad credit. With a secured credit card, you will need to make a deposit, which will be your credit limit. Using a secured credit card responsibly can help you build your credit history and improve your credit score.
  • Pay down debt. The less debt you have, the better your credit score will be. Make a plan to pay down your debt as quickly as possible.
  • Be patient. It takes time to improve your credit score. Don’t get discouraged if you don’t see results immediately. Just keep working at it and you will eventually reach your goal.
  • Contact Parachute! Here at Parachute, we offer one-on-one Credit Report Review, and Financial Counseling sessions to review your specific credit situation and can offer individualized results that align with your goals.

www.parachutecreditcounseling.org 716-712-2060

Budget, Credit, Debt, Parachute Services

The Link Between Money and Mental Health

May is Mental Health Awareness Month, and there is a clear connection between financial wellness and mental health. Financial problems are a major source of worry and anxiety for many people, and can lead to mental health struggles. If you’re worried about money, then you’re not alone! Here are some ways that financial issues can affect your mental health:

  • Stress. Money worries can be a major source of stress, and chronic stress can have a negative impact on mental health, and even physical health.
  • Anxiety. Financial problems can lead to anxiety about the future, and about being able to meet basic needs.
  • Depression. Financial problems can lead to feelings of hopelessness and despair, which can contribute to depression.
  • Substance abuse. Some people turn to drugs or alcohol, or other addictive behaviors, to cope with financial stress. You are not alone, and there are resources available.
    • SAMHSA’s National Helpline, 1-800-662-HELP (4357), or TTY 1-800-487-4889, also known as the Treatment Referral Routing Service, is a confidential, free, 24/7/365, information service, in English and Spanish, for individuals and family members facing mental and/or substance use disorders. This service provides referrals to local treatment facilities, support groups, and community-based organizations.
  • Suicidal thoughts. Financial problems can be a major risk factor for suicide. Please reach out for help AS SOON AS POSSIBLE if you are having suicidal thoughts.
    • If you’re thinking about suicide, are worried about a friend or loved one, or would like emotional support, the Lifeline network is available 24/7 across the United States. The 988 Suicide & Crisis Lifeline (formerly known as the National Suicide Prevention Lifeline) is a United States-based suicide prevention network of over 200+ crisis centers that provides 24/7 service via a toll-free hotline with the number 9-8-8. It is available to anyone in suicidal crisis or emotional distress. The caller is routed to their nearest crisis center to receive immediate counseling and local mental health referrals. The Lifeline supports people who call for themselves or someone they care about.

If your finances are negatively affecting you mentally, emotionally, and/or physically, there are a number of things you can do to improve your mental health, such as:

  • Talk to someone. Talking to a friend, family member, therapist, or financial professional who can help you cope with your financial problems and develop a plan to improve your financial situation. Getting involved in your community can help you to feel more connected and supported, which can also buffer the effects of financial stress.
  • Seek professional help. If you are struggling with mental health problems as a result of financial stress, it is important to seek help from a trained professional. A therapist can help you manage your stress, anxiety, or depression.

Take care of yourself. Make sure to get enough sleep, eat a healthy diet, and exercise regularly. These things can help improve your overall mood and well-being, putting you in a better position to be able to manage the stresses in your life.

Budget, Parachute Services

How to Budget Your Money: A Beginner’s Guide

Budgeting is a key part of financial management, but it can be difficult to know where to start. This blog post will provide you with a step-by-step guide on how to budget your money, so you can take control of your finances and reach your financial goals.

Step 1: Track Your Spending

The first step to budgeting is to track your spending. This will help you see where your money is going and identify areas where you can cut back. There are a number of ways to track your spending, including using a budgeting app, keeping a spreadsheet, or simply writing down your expenses in a notebook.

Step 2: Create a Budget

Once you have tracked your spending, you can create a budget. A budget is simply a plan for how you will spend your money each month. There are a number of different budgeting methods, so find one that works for you. Some popular budgeting methods include the 50/30/20 rule, the envelope method, and zero-based budgeting.

Step 3: Stick to Your Budget

The most important step in budgeting is to stick to your budget. This can be difficult, but there are a number of things you can do to make it easier. First, make sure you have a realistic budget. Don’t try to cut back too much too soon, or you’re likely to give up. Second, automate your budget. This means setting up automatic transfers from your checking account to your savings account. This will help you save money without even thinking about it. Third, track your progress. This will help you stay motivated and see how you’re doing.

Step 4: Review Your Budget Regularly

Your budget should be a living document. That means you should review it regularly and make changes as needed. Your income and expenses may change over time, so your budget should change too.

Step 5: Make a Plan for Overspending

Everyone overspends from time to time. It’s important to have a plan for what you’ll do if you overspend. One option is to have an emergency fund for unexpected expenses. Another option is to transfer money from your savings account to cover the overspending.

Step 6: Reward Yourself

When you reach a financial goal, be sure to reward yourself. This will help you stay motivated and keep working towards your goals.

Budgeting can be a challenge, but it’s worth it. By following the steps in this post, you can take control of your finances and reach your financial goals.

If you’d like more detailed, individualized assistance, contact Parachute Credit Counseling at 716-712-2060 or www.parachutecreditcounseling.org

Budget, Credit, Debt, Parachute Services

April is Financial Literacy Month!

Financial Literacy Month is a national observance held every April to promote financial education and responsibility. Financial Literacy Month is a great time to learn more about financial literacy and to start taking steps to improve your financial well-being.

Financial literacy is the ability to understand and manage personal finances, and includes the awareness and knowledge to make informed financial decisions. Financial literacy can be improved by seeking to understand basic financial concepts such as budgeting, saving, and investing.

Financial Literacy Month is a great time to start taking steps to improve your own financial well-being. Here are some tips to get started:

  • Set financial goals.

What do you want to achieve financially? Do you want to buy a house, save for retirement, or start your own business? Once you know what you want to achieve, you can start making a plan to reach your goals.

  • Create a budget.

(…and stick to it!). A budget is a plan for how you will spend your money. It can help you track your spending and make sure you are not spending more than you earn. You can’t make progress toward your financial goals if you don’t know where your money is going each month.

  • Save money.

Start by setting aside a small amount of money each month and gradually increase the amount you save as you get more comfortable with it. Set up auto pay to direct deposit a realistic amount to a savings account out of each paycheck.

  • Start thinking about investing.

Investing money is a way to grow your money over time. There are many different ways to invest, so it is important to do your research and choose an investment strategy that is right for you. Contact a financial planner or advisor for specific advice and guidance.

  • Get help.

If you are struggling with financial literacy, there are many resources available to help you, both online and in your community. You can take a financial literacy class, read books or articles about financial literacy, follow reputable financial sources on social media, subscribe to financial newsletters, or listen to personal finance podcasts. Meeting with a financial professional is a great way to assess your own situation, and work together to create a plan on how to achieve your personal financial goals and stay on track moving forward.

Parachute Credit Counseling is dedicated to promoting financial literacy and well-being, and to help minimize the stigma associated with debt.  We offer many different services to assist individuals and families achieve their personal financial goals, and to provide financial education.

  • More information on Parachute’s Workshops and Events to promote financial literacy:
Workshops & Events
  • Essential information compiled by Parachute to promote making wise budgeting choices and maintaining good financial health:
Educational Articles

Contact us at (716) 712-2060 to speak with a certified financial counselor and review your personal situation and create a plan to take specific steps to improve your own financial literacy.  We are offering appointments all through the month of April, and beyond!