Governor Hochul introduces legislation to protect New Yorkers from “bad actors” and medical debt;
New report highlights significant issues with student loan repayment after an unprecedented 3 year period
Parachute Credit Counseling Offers FREE Assistance and Counseling
Parachute Credit Counseling, formerly known as Consumer Credit Counseling Service of Buffalo (CCCS), is the Western New York region’s premier organization providing our community with the best strategies to master their credit. Today they announce a number of notable financial news items emerging this month. Along with these new items, Parachute reminds residents that beginning the new year with a financial “check up” is an invaluable service to their families and themselves.
Call 716-712-2060 or visit https://parachutecreditcounseling.org/ for more information.
The State of Student Loans
On October 1st, Americans resumed paying their student loans, after a 3 and a half year break in payments. Financial experts predicted issues with payments after such a long period, stating that about 20% of student loan borrowers had risk factors that indicated they could struggle when payments resume. These issues have been worse than predicted, confirmed when the Department of Education announced in December that nearly 9 million borrowers–roughly 40% of the 22 million borrowers who had bills due in October–missed their first student loan payment.
Outstanding student loan debt presently exceeds outstanding auto loan debt and credit card debt.
Earlier this month, the Consumer Financial Protection Bureau (CFPB)—the federal government agency that ensures that consumers are treated fairly by banks, lenders, and other financial companies—issued a report on the agency’s monitoring activities of federal student loan servicers since the restart of required payments. Per the CFPB, many borrowers are making their first payment ever on their student loan, and many are also navigating their loan repayment options, including options that allow borrowers to make lower payments based on a percentage of their income. The report discusses challenges faced by borrowers with respect to contacting their servicer, enrolling in alternative repayment options, and billing statement errors. According to borrowers, there have been many problems navigating loan repayment since restarting on October 1st.
The CFPB pledges to work on this situation and to continue to carefully watch loan servicers and work with federal and state agencies to hold accountable those that violate laws protecting borrowers. The CFPB also has resources for student loan borrowers needing more information. Borrowers can also visit the Department of Education’s Federal Student Aid website for more information on restarting student loan payments. In addition, consumers can submit complaints about financial products or services by visiting the CFPB’s website or by calling (855) 411-CFPB (2372).
Parachute Credit Counseling recommends that borrowers contact their office to enroll in their free Student Loan Counseling program, available to all residents of the eight counties of Western New York. Parachute’s Certified Financial Counselors will help WNY residents consolidate their student loans and review other potential relief options and changes to existing programs available to help borrowers reduce or eliminate their debt as well as assist them in making payment plans. Call 716-712-2060 or visit https://parachutecreditcounseling.org/ for more information on our Student Loan Counseling Program and other financial counseling services we provide.
Proposed Consumer Protection Legislation
Governor Hochul has proposed a few pieces of new legislation designed to protect New York residents from unfair and negative business practices and from the all too common issue of medical debt.
Governor Hochul introduces consumer protection legislation
“Buy Now Pay Later” loans have become popular as a low-cost alternative to traditional credit products to pay for everyday and big-ticket purchases, but they remain unregulated and can charge hefty fees. Legislation proposed will require “Buy Now Pay Later” providers to get a license to operate in the state, and to authorize the New York State Department of Financial Services to propose and issue regulations for this rapidly growing industry.
The Governor has additionally called for increased protection measures that strengthen the state’s ability to enforce consumer protections and to penalize “bad actors”.
Medical debt is a critical issue for many, including over 700,000 New York residents who currently have medical debt in collections. Those with medical debt often forego necessary medical care and historically minimize important social determinants of health, including food, heat, and rent. Overall, this threatens the health and financial stability of New Yorkers. The proposed legislation will limit hospitals’ ability to sue patients earning less than 400 percent of the Federal Poverty Level ($120,000 for a family of four), helping to eliminate medical debt lawsuits filed against low-income New Yorkers. Per the Governor’s office, the legislation would also “expand hospital financial assistance programs for low-income New Yorkers, limit the size of monthly payments and interest charged for medical debt and implement other protections to improve access to financial assistance and mitigate the deleterious effects of medical debt on New Yorkers.”
Regional Bankruptcy Update
Bankruptcy rates up by 2.7%: first year-over-year increase for Buffalo since 2018
The Buffalo News recently reported a rise in bankruptcy filings, based on data from the federal bankruptcy court. According to financial experts at Parachute Credit Counseling, they have been seeing people with higher levels of debt which, coupled with higher interest rates, stagnant wages, and inflation can cause financial stress and instability. Bankruptcy can be attributed to some of these issues.
Parachute Financial Counselors assure the WNY community that, depite some environmental concerns, there are simple, proven techniques to facilitate economic security. Now is the time for borrowers to seek unbiased counseling.Parachute counselors will provide expert strategies for attaining financial stability including any financial assistance needed, from budgeting help to credit repair to buying a home. Call 716-712-2060 or visit https://parachutecreditcounseling.org/ for information on financial counseling services.