Libby Palackdharry, who manages our financial stability programs, is interviewed in this Detroit Free Press column by Susan Tompor about the NeighborWorks America Training Institute in Detroit, which offered more than 100 courses, including training financial coaches to help those struggling with student debt.
NeighborWorks event in Detroit to highlight jobs, growth
Susan Tompor, Detroit Free Press Personal Finance Columnist
August 6, 2016
Community-development professionals will visit Detroit to discuss housing, jobs and the impact of student loans on financial health.
Here’s yet another sign that the student debt load is choking young consumers: More training is in the works in Detroit this week to help financial coaches and others help these borrowers catch their breath.
The NeighborWorks Training Institute will host its national conference Monday through Friday in downtown Detroit where more than 2,000 community development professionals from around the country will attend seminars and workshops, including a new session on how to tackle student debt.
One headliner: A “Creating Places of Opportunity: Investing in Neighborhoods” symposium will be held Wednesday at the Detroit Marriott at the Renaissance Center. Speakers will include Detroit Mayor Mike Duggan; Conrad L. Mallett Jr., chief administration officer for the Detroit Medical Center, and James Fallows, national correspondent for The Atlantic.
The symposium, sponsored by the JPMorgan Chase Foundation, will examine how strategic investments in places — and the people who live there — can lead to greater prosperity and inclusive growth. Discussions will involve entrepreneurial businesses, job-creating industries and local housing.
Paul Weech, CEO of NeighborWorks America, said a key part of seminars and workshops will include a new course to teach housing counselors, financial coaches and others the ins-and-outs of managing student loan debt.
Student loan debt can influence how soon a young consumer is able to save a down payment for a new home or even a new car. But understanding one’s options — or even the how to borrow when in college — can be far more complex than many would imagine.
Weech noted that student loans — including a mix of some loans with different options for deferred payment programs, private loans with rates based on credit history, and the rules of the federal loan program — can confuse borrowers.
Many times, people don’t know what loans make sense for them or what risks they could be taking on, such as co-signing for a private student loan for a son or daughter.
NeighborWorks America, a national nonprofit community development corporation based in Washington, D.C., has an overall goal of strengthening communities by providing access to home ownership, as well as safe and affordable homes to rent.
“We support a network of more than 250 nonprofits around the country,” Weech said.
Two NeighborWorks organizations in the metro Detroit area are: Southwest Solutions in Detroit and Lighthouse of Oakland County in Pontiac. Others organizations in Michigan are: Dwelling Place in Grand Rapids, Habitat for Humanity of Michigan in Lansing, the Northwest Michigan Community Action Agency in Traverse City, Kalamazoo Neighborhood Housing Services, Metro Community Development Inc. in Flint, and Southwest Michigan Community Development Corp. in Battle Creek.
Jayna Bower, senior director for NeighborWorks Center for Homeownership Education, said sometimes students or their parents are so focused on making sure that they’ve found a way to finance college tuition and room and board that they aren’t paying attention to the details involving the types of student loans they’ve taken out.
First and foremost, she said, borrowers need to “know about the type of loan and the implications of it.”
The goal of the NeighborWorks course is to build an independent, third-party network that can talk through options for borrowers, as well as those struggling to make student loan payments.
The Michigan State Housing Development Authority said its certified counselors have been encouraged to attend training for the student loan counseling program, as such training offers a way to engage an audience within the communities they serve.
Libby Palackdharry, senior manager for financial stability programs at Southwest Solutions in Detroit, said financial coaches in Detroit see a range of clients from across the financial spectrum who have student loan debt — some are moving toward buying an affordable home, some are homeless veterans who have student loans but are trying to find meaningful employment.
Some may be paying on time; others may be in programs to defer payments because of economic hardship; others may have missed payments.
“A lot of people are either struggling to find employment or the employment they do have is not sufficient to cover the student loan debt,” Palackdharry said.
Many times, she said, people take on student loan debt because they’re trying to work toward gaining a stable economic footing.
While that works for many, everyone does not find a job that pays well enough to deal with the debt they’ve built up going to college. Or some do not finish college but have student loan debt.
“It’s just heartbreaking to see the negative consequences that come from it for some people,” Palackdharry said.
Palackdharry, 32, said she was fortunate to be in the third generation of her family to go to college. Her parents started saving for college when she was born and bought a Michigan Education Trust contract, a prepaid tuition plan. Her grandparents set aside money for her as well. She does not have student loan debt and now realizes how fortunate she was to have a family of savers.
But many do not have the same opportunities, she said, and sometimes student debt adds to their burdens.
NeighborWorks released a survey two years ago that indicated that nearly one out of four Americans knew someone at that time who had delayed buying a home because of student loan debt.
Simply ignoring the burden that student loan debt can have on some pocketbooks — particularly for African-Americans, Hispanics and women — ignores the risk that some student loan borrowers may end up at a financial loss for a long time.