As part of National College Savings Month, NYC Department of Consumer Affairs (DCA) Commissioner Lorelei Salas is encouraging New Yorkers to take advantage of free City resources to help manage their finances and start planning for their college education.
With the rising cost of higher education, families can benefit by saving early and creating financial plans to avoid a lifetime of student loan debt. DCA offers free, one-on-one financial counseling at more than 20 Financial Empowerment Centers throughout all five boroughs. At these Centers, professional financial counselors can help New Yorkers reduce debt, build their savings, open a bank account, consider college savings options such as 529 accounts, and more. New Yorkers can book a confidential, one-on-one appointment with a professional financial counselor by calling 311, visit , or texting TalkMoney to 42033 (message and data rates may apply; check with your service provider).
“With two sons now in college, I know firsthand the best action that a family can take is to plan ahead,” said DCA Commissioner Lorelei Salas. “Students are making important financial decisions at a very young age—decisions that can have lifelong consequences. That’s why it is so important to discuss and research your options, set a budget, learn what types of aid are available, and start saving as early as possible. I encourage any New Yorker who is thinking about taking out student loans, or who already has student loans to visit one of our Financial Empowerment Centers to discuss your options.”
In December 2017, DCA’s Office of Financial Empowerment (OFE) and the Federal Reserve Bank of New York released , the first neighborhood-level examination of student loan outcomes. The report found that although New Yorkers’ delinquency and default rates are slightly lower than the national average, certain NYC neighborhoods are experiencing significantly higher rates of delinquency and default despite the fact that their residents have low average loan balances. These higher levels of student debt delinquency and default also tend to be among older borrowers and those in lower- income neighborhoods. The report was developed to provide policymakers and community leaders with the information needed for effective, targeted interventions to ease the burden for New Yorkers struggling with student debt. Following the release of the report, DCA a series of student loan debt clinics in targeted neighborhoods to assist New Yorkers who have questions or concerns in dealing with or understanding their student loan debt. DCA also released tips to help New Yorkers understand their rights and responsibilities with student loans and tips for those who are struggling with their student loan payments.
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DCA offers the following tips to help plan and protect students when applying to schools:
- Research. Research multiple schools before deciding which one is right for you. Ask for information on student loan debt, total costs, and whether the credits you get will transfer to other schools.
- Ask for the school’s tuition cancellation policy in writing. The policy should describe how you can get a refund if you need to cancel or withdraw.
- Never sign anything you don’t understand. If a school pressures you to sign a contract or agreement on the spot, walk away. You have the right to bring home important documents so you can read them more carefully with people you trust.
- Complete the Free Application for Federal Student Aid (FAFSA). FAFSA is the first step in the financial aid process and is the application students use to apply for federal grants and federal student loans. Many types of financial aid are distributed on a first-come, first-served basis, so it’s to your advantage to file as early as possible. Check with colleges and file in time to meet the earliest deadline. You must complete the FAFSA form every school year. Visit studentaid.ed.gov for information about FAFSA.
- Be wary of taking on significant amounts of debt. Some schools charge tens of thousands of dollars. Often, the “financial aid” that is available isn’t free money, but rather loans you must pay back with interest. Make sure you understand the terms, consider the projected salary associated with your education, and whether you will be able to make the projected payments.
- Do research before borrowing money. If you need to borrow money for school, always consider federal assistance programs before private lenders.
- Avoid schools that “guarantee employment” after you graduate. A school cannot guarantee that you’ll get a job when you graduate. Many times, the schools that make these types of promises don’t actually place you in a job.
DCA also offers tips for to help inform them of their rights and responsibilities when enrolling in a school or training program, using a credit card, taking out a student or car loan, and learning about credit repair scams. For more tips, visit nyc.gov/dca.
For more information about DCA and its work, call 311 or visit DCA at nyc.gov/dca