2014 has been a year of dramatic growth for NYLAG’s Financial Counseling Division (FCD), which in the last nine months has launched three significant new ventures that have doubled staff size and are expected to bring financial counseling and support to an additional 1,900 low-income New Yorkers. Founded in 2009, the division has thus far helped nearly 4,000 people reduce their debt and address personal financial crises. The caliber of FCD’s staff is unique among New York City nonprofit financial counseling providers. With an average of 15 years of experience, NYLAG’s counselors bring a diversified level of skill and applicable backgrounds from Wall Street, banking, and the nonprofit sector, including extensive experience in serving low-income New Yorkers.

Managing Student Loan Debt

Voya Financial, inspired by ING

Last year, seven out of ten graduating college students in the US left school in debt – the total bill due tops $1 trillion. The nation’s student loan debt is larger than credit card and auto loan debt, and second only to mortgage debt. Recognizing the acute challenges this crisis poses for low-income students, early in 2014 NYLAG rolled out its Higher Education Financial Counseling Project, which is dedicated to helping former, current, or aspiring college students plan and manage their student loan debt. The project is funded by the Voya Foundation, which supports innovative programs in the area of financial education. In just nine months, the project has served nearly 400 clients under the age of 30.

Thanks to this new program, clients are educated in how to budget for and manage expenses related to pursuing a higher education, with a special emphasis on those clients who are struggling with student loan debt. Financial counselors help college graduates shift to more affordable, income-based repayment plans and employ other debt management tactics. NYLAG’s financial counselors also use their broad skills to help clients successfully manage their finances while they are in school.

A unique aspect of the project is that it is open to any NYLAG client or family member of a client who was or is considering becoming a student. In particular, the project coordinates with specific in-house NYLAG legal programs where financial counseling can make a real difference in clients’ lives. This includes victims of domestic violence, clients who have been defrauded by for-profit schools, teens at risk of unmanageable debt, and young immigrants whose status makes them eligible for private loans.

A One-Stop Approach

Single StopNYLAG launched two financial counseling initiatives in 2014 as part of its partnership with the nonprofit Single Stop USA. Single Stop combats poverty by providing coordinated access to services that create economic mobility for low-income families and individuals through a unique one-stop model.

In the first of these Single Stop programs, kicked off in January, NYLAG is providing on-site financial counseling at 11 community-based organizations serving very low-income populations in Manhattan and Brooklyn, including shelters, food pantries, and work readiness programs. Under the Single Stop model, clients of these agencies who are identified as needing assistance with their finances are referred to NYLAG’s onsite Financial Counselors who meet with them one-on-one to help improve their long-term economic stability through practical budgeting and financial planning.

In addition to providing budget planning, credit improvement advice and debt management, NYLAG also helps Single Stop clients to address emerging issues that are particularly challenging for low-income populations, such as managing the financial implications of the Affordable Care Act, and dealing with student loan debt.

To further address financial barriers to completing post-secondary education, a second Single Stop program was launched in August in partnership with seven City of New York (CUNY) community colleges. Through on-site financial counseling, NYLAG is helping these students increase their financial literacy, create solid financial plans, lower their debt, establish or improve credit scores, and start on a path toward increased savings. In addition to these traditional services, NYLAG also helps students avoid future debt burdens, and prepare to manage their student loans after graduation.

NYLAG has extensive experience serving the vulnerable populations that constitute a high proportion of the community colleges’ student bodies. This includes students with limited English proficiency, who are counseled by FCD staff fluent in Spanish and other languages, or are assisted by volunteer interpreters and translators.  Another vulnerable population, victims of domestic violence, are taught the dynamics of financial abuse, and given advice and guidance about achieving and sustaining financial independence.

Delivered in tandem with the coordinated suite of Single Stop services, these financial counseling initiatives are playing a vital role in improving the overall effectiveness and duration of Single Stop’s poverty-fighting measures.