Bad Credit Can Happen to Anyone

Today I am lifting from a blog post by Terri Steingrebe, CEO of the excellent nonprofit More Than Wheels. More than Wheels helps people get their finances in order and learn practices that enable them to get a car loan that doesn’t gouge them. The organization started in New Hampshire, where having a car is essential for a job. (There is no public transportation to speak of.)

“Why is it that there can be such deep shame over credit issues?” writes Steingrebe. “We’ve all felt it: That moment when your credit card is declined – even if you know it’s up to date. Even those few seconds while you wait for a charge to go through can be peppered with anxiety. It’s as if you suddenly feel like the one slacker in a room full of bill-paying rock stars. For people whose credit has fallen on hard times, these types of feelings are an everyday reality.

“Of course, it turns out that you are far from alone, even if you legitimately have a credit stumble. Over a third of all Americans fail to pay every bill on time, according to CreditCard.com. Time Magazine reported that three-quarters of young adult renters (ages 18 to 24) spend more than they earn – every month. Easily accessed credit and declining financial literacy make it likely that these trends will continue to worsen.

“So why the stigma? We live in a society that encourages us to overspend and take on credit that we can’t afford, but then shames us heavily when we miss a payment. Scan lists of the things people worry about the most, and ‘paying the bills’ consistently comes out on top.

“I believe there are two important factors that account for deep credit shame. The first is that people are fundamentally wired to be responsible. We care about keeping out commitments, especially those to our creditors. Against that, though, comes the second factor. Bill collecting practices notoriously play off our natural sense of responsibility and use shame as a powerful tool to try to get people to pay.” Read her whole post here.

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Promising Low-Income Students Get to Top Colleges

Here’s an exciting program that pays for college for the very top low-income students.

David Leonhardt has the story in the NY Times. “Arianna Trickey was opening a piece of mail in her bedroom during junior year of high school when a pamphlet fell out of the envelope. The pamphlet seemed to offer the impossible: the prospect of a full scholarship to several of her dream colleges.

“She went running out to her father, a house painter, who was sitting on the family’s porch in Grass Valley, a California city in the Sierra Nevada foothills. “You have to see this,” she told him. ‘This is the scholarship that will get me to the best schools in the country.’

“The pamphlet was from a nonprofit organization called QuestBridge, which has quietly become one of the biggest players in elite-college admissions. Almost 300 undergraduates at Stanford this year, or 4 percent of the student body, came through QuestBridge. The share at Amherst is 11 percent, and it’s 9 percent at Pomona. At Yale, the admissions office has changed its application to make it more like QuestBridge’s.

“Founded by a married couple in Northern California — she an entrepreneur, he a doctor-turned-medical-investor — QuestBridge has figured out how to convince thousands of high-achieving, low-income students that they really can attend a top college. ‘It’s like a national admissions office,’ said Catharine Bond Hill, the president of Vassar.”

Read about how it works and the successes it has seen here.

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Burlington Power 100% Renewable

A recent Associated Press story notes that Burlington, Vermont, is now using 100% renewable energy.

“Vermont’s largest city has a new success to add to its list of socially conscious achievements: 100 percent of its electricity now comes from renewable sources such as wind, water and biomass. With little fanfare, the Burlington Electric Department crossed the threshold this month with the purchase of the 7.4-megawatt Winooski 1 hydroelectric project on the Winooski River at the city’s edge.”

This is a big deal but not surprising for Burlington, which has been taking steps toward energy conservation for decades.

It all fits with the city’s sustainability efforts, detailed by former Burlington economic development officer Bruce Seifer in a book he co-authored and in a Boston Fed Communities & Banking article, here.

“In 1986, the late Blair Hamilton and his wife, Beth Sachs, approached City Hall to discuss their idea to start a nonprofit corporation, Vermont Energy Investment Corporation. Their plan was to make buildings more energy efficient and reduce the community’s dependence on fuel.

“Since the idea was consistent with all six principles in the “Jobs & People” plan, Burlington began providing technical assistance to VEIC and continued to do so over 12 years. The assistance included helping to develop a network of supporters among other local nonprofit and governmental organizations. With a small seed grant from the city, the supporters raised more than $15,000 in start-up money at a fundraiser in the Hamilton-Sachs home.

“Twenty-eight years later, VEIC has more than 320 employees and fills 50,000 square feet of a building that had been left behind by a large defense contractor. Moreover, VEIC has helped to save customers the equivalent of 120 megawatts of electrical consumption since 2000.”

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Race to Solar Workshop for Nonprofits

Nonprofits in the Boston area that are interested in the cost savings that can come from being greener, should check out this press release from Heetma.org.

“Organizations have until the end of the year to qualify into the Race to Solar program, which helps nonprofits save money and energy through solar and efficiency opportunities. Through the Race to Solar program, organized by the cities of Cambridge and Boston, along with the award winning organization HEET, eligible nonprofits can acquire a solar electric energy system at below market-rate, plus take advantage of energy efficiency savings through NStAR’s Direct Install program.

“Learn more about the  Race to Solar program at an upcoming workshop and meet the solar and efficiency experts that can help your organization save energy and money. Please RSVP to attend one of the upcoming Race to Solar workshops:

“For more information about the program, contact info at HEETma.org or call 617-HEET-350.”

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Credit Unions Get Grant for Immigrant Services

A press release that Sol Carbonell sent along has relevance for the asset-building efforts of the Boston Fed’s Regional & Community Outreach department and our New England partners.

The press release reads in part: “The National Federation of Community Development Credit Unions (Federation), Grantmakers Concerned with Immigrants and Refugees (GCIR) and the Northwest Area Foundation (NWAF) are pleased to announce the grantees selected for the Northwest Area Immigrant Asset-Building Initiative (Initiative), a project designed to connect low-income immigrants to safe and affordable financial products and quality immigration services. The two grant recipients are OneAmerica, which will collaborate with Lower Valley Credit Union in Washington State, and Ascentra Credit Union, which will partner with the Diversity Service Center of Iowa (DSCI).

“With generous support from NWAF, the grantees will conduct a year-long campaign to provide immigration and financial services for immigrants in the two states. The partnership between OneAmerica and Lower Valley Credit Union will facilitate citizenship clinics in Washington State, where credit union staff will offer financial education and financing options for the $680 naturalization application fee in tandem with immigration legal services provided by OneAmerica and its local affiliate, La Casa Hogar. In Iowa, Ascentra Credit Union and DSCI will work together to provide preferred rate financing options for those seeking assistance with immigration application fees, as well as financial education and citizenship courses.”

Read the details on how they are going about it at Northwest Area Foundation, here.

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Loan Forgiveness May Mean More Borrowing

Here’s a new angle on the student-loan forgiveness that is sometimes associated with taking public service jobs after college.

Jonnelle Marte writes for the Washington Post, “Programs that set student loan payments based on a person’s income and offer loan forgiveness after a certain number of payments are meant to encourage people with college debt to choose jobs based on the merit of the work and not the size of the paycheck.

“But they may offer an unintended benefit for people going into public sector or nonprofit jobs: the ability to borrow more heavily than is necessary.

“A paper released Wednesday by New America Foundation says many students planning to take public sector jobs, especially those earning graduate and professional degrees, can see a large chunk of their debt forgiven by the income-based repayment (IBR) program. In some cases, the debt forgiven can amount to most of the cost of a graduate degree, says Jason Delisle, the lead author.

‘‘ ‘If they think they’re going to end up working at a nonprofit or for the government, then they should borrow as much money as they can get their hands on,’ he says, ‘and go to whatever school they want to go to.’ …

“Borrowers who take qualifying jobs in the public or nonprofit sectors would be eligible to have their debt forgiven after 10 years of payments. For instance, a moderate-earning social worker earning would be responsible for the first $28,000 in loans, even if they took out the typical debt load of $49,000 — before interest — according to the foundation.” Read more here.

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Vermont’s Tight Rental Market

At the Housing Matters blog in Vermont, we learn of a new report highlighting the state’s tight rental market.

“Vermont was placed among states with the fewest apartments available for deeply low-income renters by a recent study from the National Low-Income Housing Coalition.  For every 100 renters in the state, only 11 units are affordable and available to renters making less than 15% of the area median income, the researchers estimated.

“No other New England state had as tight a rental stock as Vermont for deeply low-income apartment seekers.” Read the full report here.

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