Friday, April 26, 2013

Good News!

We are receiving a $35,000 grant from the Margaret L. Wendt Foundation for our Student Loan Counseling Program. Funders are realizing that student loans are a hot issue--and we will keep pushing this agenda.

Monday, April 22, 2013

Come and check out our Student Loan Counseling Program! We can and will help us 712-2060
Survey: 50% Of High School Seniors Don't Know Student Loan Costs
WASHINGTON (4/17/13)--Nearly half of high school seniors in the U.S. don't know how much money they will need for college, and even more don't understand basic student loan terms, according to the Credit Union National Association's first annual High School Student Borrowing Survey.

Most students (70%) are confident they will receive a high-paying job upon graduating, CUNA found. That indicates they are willing to pay the cost of college tuition even if they don't understand how the borrowing will affect their financial futures. Of the 847 17- and 18-year-olds polled nationally, 83% did not know the rates and 77% didn't know the duration of their expected or existing college loans.

"These troubling findings suggest not just a lack of awareness of college cost or how debt works but also a lack of basic financial knowledge," said Paul Gentile, CUNA executive vice president, strategic communications and engagement. "The results suggest that some students could be challenged in managing basic expenses or using such payment tools as credit cards in a consistently responsible manner as they enter adulthood."

Even if students relied on parents to arrange financing, it's still important for students themselves to have a basic understanding of the level and type of college debt they are taking on, Gentile added.

The findings are of particular concern, he said, because 74% of aspiring college attendees say they will need a combination of federal and private loans, family money and jobs to support their tuition. About 20% reported that family will pay their tuition outright, 5.8% will use federal loans and grants alone, and 2.01%  will rely on private loans and grants.

Twenty-five percent expect to take out two or more student loans, while 13% expect one loan, and 60% couldn't estimate how many they would need.

Given the new reality of more loans at larger amounts for most borrowers, CUNA is lobbying the government to allow student loans of longer duration than the current 15-year standard.

"The 15-year standard student loan made sense in years past when the total debt taken out was much lower," Gentile said. "College is a lifetime investment. The value of a longer term is you can better structure the loan to allow for smaller payments in the early work years. That is typically when most borrowers struggle as their careers are just beginning. Once their careers pick up, they are better able to manage the debt, so a longer term helps marry up those two realities."

Of those who knew what they will owe after graduation, 15% said they will owe $10,000 or less; 22%, $11,000-$50,000; and 13%, more than $50,000.

Credit unions offer better interest terms due to their mutual, member-owned business model. Credit union private student loans also perform better than other student loans, with default rates at about 1.6%, compared with less than 6% for all private student loans and more than 12% for federal loans.

Monday, April 15, 2013

Looking For Help??

CCCS is hosting a free financial educational workshop on Saturday, April 27th. Call 712-2060 for details if interested in attending!

Wednesday, April 3, 2013

Nonprofits here say 24 agencies save taxpayers $200 million

Would you invest $1 to save $11?
That’s the return rate for tax dollars spent on a variety of services provided by area nonprofit agencies, according to a new study by a local group of nonprofit executives.
The study by the Agency Executives Association examined programs at two dozen area agencies to come up with its government savings estimates.
Some of the savings occur in Medicare and Medicaid from programs that prevent hospitalizations or nursing home placements.
Taxpayers also save through services that reduce the number of kids who end up in juvenile detention and that move people from welfare into jobs.
For example, Meals on Wheels for Western New York serves meals to about 3,400 clients each year with a program budget of $4.4 million and a network of more than 1,500 volunteers.
The agency estimates that about 20 percent of those clients are able to remain in their own homes because they receive daily meals. Otherwise, those 680 clients would require nursing home care at an estimated $100,000 per year per client. That amounts to annual savings of $68 million from just one agency’s work, the study found.
Despite such data, Meals on Wheels is in jeopardy of losing funds due to the federal budget sequester that took effect in March, a scenario that ultimately would cost taxpayers more money. Many nonprofit agencies also are facing possible funding reductions in the state budget.
“The need has been growing every year,” said Tara A. Ellis, president and chief executive officer of Meals on Wheels.
In 2012, the agency distributed 5.3 percent more meals than in 2011, said Ellis.
“But the funding stayed flat, so if we were a business we would have lost money,” she said.
The agency filled its $350,000 funding gap by appealing to corporate donors.
But what would have happened had Meals on Wheels simply cut off services? Would some clients have ended up in nursing homes?
“The message we want to get out is there needs to be some smart policymaking here to invest in programs that save tax dollars,” said Jerry Bartone, executive director of Community Concern of Western New York and chairman of the Agency Executive Association’s leadership forum.
The AEA, an affiliate of the United Way of Buffalo & Erie County, represents 142 nonprofit agencies.
Looking at programs run by 24 area agencies, the study found that taxpayers save an estimated $200 million per year.
Some other nonprofits in the report included: the American Red Cross, Camp Good Days and Special Times, Compass House, Crisis Services, Goodwill Industries, Habitat for Humanity and Jewish Family Services.
Jewish Family Services’ refugee resettlement program, which costs $333,812 for 150 refugees, is estimated to save the government $2.5 million. Compass House provides shelter for 307 young people at a cost of $520,590, saving an estimated $10.9 million – the expense of housing those youth in a detention facility for a year.
The programs represent a broad cross section of services provided by an estimated 6,000 nonprofit organizations. Nearly 300 of those agencies operate with revenues of more than $1 million, generating a local economic impact of $2.7 billion.
“The whole intent was not to produce a definitive study on the issue. The whole intent was to begin the discussion,” said Paul C. Atkinson, chief executive officer and president of Consumer Credit Counseling Service of Buffalo and president of the AEA.
“We’ve just kind of scratched the surface of a lot of not-for-profits.”
The AEA hopes to meet with elected officials, foundations and other community members about its study.
Erie County legislators have not yet received a copy of the study and have not yet had a chance to review it. The county is asked to fund a lot of the agencies analyzed in the study.
Bartone and Atkinson said they were not advocating to increase funding for all nonprofit programs or to stop all cuts.
Atkinson acknowledged – as many funders have argued in the past – that the area probably has too many nonprofit organizations.
But an appropriate discussion should be held to determine adequate funding levels and to find agencies and programs that can deliver services most effectively and efficiently, he said.
Elected officials, added Bartone, “need to understand where to make investments and where to make cuts that benefit both taxpayers and the people who uses these services.”