Reveals two new repayment options
Editorial by Consumer Credit Counseling Service
As 2016 unfolds, student loans continue to be a source of angst for many area residents. A report released last week by Generation Progress stated student debt continues to climb and millions more have defaulted, with no solution in sight.
Forty-three million people in the U.S. owe some amount of student loan debt. Exceeding $1.3 trillion, the total student debt in the U.S. surpasses both the amount of credit card debt and car loans. Students are graduating with increasing amounts of debt each year. Seven in 10 college seniors obtaining a bachelor's degree in the Class of 2014 graduated with debt, and carried an average debt of $28,950.
Now, there are two new repayment options that will provide relief for thousands of Western New Yorkers.
A new federal income-based program, Revised Pay As You Earn (REPAYE), enables borrowers to cap their monthly payments at 10 percent of their discretionary income regardless of when they borrowed or how much they owe. Another benefit is that, after 20 years of making payments (25 years for graduate students), any outstanding loan balance will be forgiven under the program. It's similar to the current Pay As You Earn (PAYE) option, but REPAYE is open to all students who borrowed directly from the federal government.
The New York State Get on Your Feet Loan Forgiveness Program provides up to 24 months of federal student loan debt relief to recent state college graduates who are participating in a federal income-driven repayment plan whose payments are generally capped at 10 percent of their discretionary income.
Consumer Credit Counseling Service wants student loan borrowers to know they are here to help. CCCS can help borrowers access these new programs while they work with a certified credit counselor to create a plan for financial security.
Three years ago, after seeing a sharp increase in new clients struggling with student loan debt, CCCS initiated the region's only student loan counseling program. Certified credit counselors work with a broad cross-section of the community, whose members are saddled with student loans. The complexity of the student loan market and options available during repayment cause many individuals with student loans to feel overwhelmed. CCCS Buffalo designed its program to meet the needs of this growing population segment.
Both new student loan repayment options address an overwhelming need to reduce student borrowers' financial stress. That stress is blamed for the delay in home purchases and other life-stage commitments. But of even greater concern is the upward trend in student loan defaults. Those defaults can have a long-lasting impact on a borrower's financial well-being. A record of late or missed loan payments impacts a borrower's credit history by making any new loan requests - for cars or homes - more expensive or just extremely difficult to qualify for.
Student loan borrowers are encouraged to reach out to an NFCC certified student loan counselor at CCCS to get help. To get started, consumers can visit www.consumercreditbuffalo.org or call 716-712-2060.
CCCS is a nonprofit, full-service credit counseling agency, providing confidential financial guidance, financial education, counseling and credit repayment assistance to consumers since 1965. CCCS helps consumers trim expenses, develop a spending plan and repay debts. Counseling is available at its main office in West Seneca, in one of its satellite offices, by telephone and via Internet. Visit www.consumercreditbuffalo.org for more information.
About the NFCC
Founded in 1951, the National Foundation for Credit Counseling is the nation's first and largest nonprofit dedicated to improving people's financial well-being. With 600 member offices serving 50 states and Puerto Rico, its NFCC certified consumer credit counselors are financial advocates, empowering millions of consumers to take charge of their finances through one-on-one financial reviews that address credit card debt, student loans, housing decisions and overall money management.
For guidance and advice, call 800-388-2227 or visit nfcc.org.