On June 15, 2017, Jeff Bezos, Founder and CEO of Amazon, tweeted a “request for ideas” for philanthropy. Taunya Kennedy, a student loan counselor at Money Management International (MMI), the largest nonprofit credit counseling agency in the United States, offers a suggestion to the billionaire: provide transformative financial support to assist struggling student loan borrowers.
Dear Mr. Bezos,
You have received over 46,000 responses to your call for philanthropic ideas. While there are many needs, I believe the most prevalent anxieties among American households today are the economy and personal finances.
Each week, I meet with dozens of clients whose greatest concerns are the ability to retain a rewarding job and fulfill their financial commitments. They believe that higher education is the foundation of a secure financial future, but their student loans have become part of the largest consumer debt crisis in America: 44 million borrowers owe more than $1.3 trillion, and over 40 percent of them are not making payments due to default, delinquency or postponement.
Studies have shown that student loan debt has a very tangible effect on both national and personal economies: fewer consumers are starting small businesses; fewer young adults are purchasing their first home; and more young workers are putting off saving for retirement or returning to school for advanced degrees. Those who have fallen behind on their student loan payments face even greater personal challenges, ranging from higher debt and damaged credit to garnished wages and forfeited tax refunds.
While federal programs such as the Public Service Loan Forgiveness Program are controversial, empowering debt-strapped borrowers to make sound financial decisions should not be. Our clients rely on us for guidance and support in navigating the complicated and stressful world of student loan repayment plans and deferment options. This is especially evident in light of last month’s CFPB report on student loan servicing failures, and among the heartbreaking case studies we hope to share with you.
MMI has been moving clients from crisis to control for 60 years. Recently, our work was publically recognized for providing sound advice to those not fully assisted by their loan servicer or the Department of Education’s existing resources. Online entrance and exit counseling is inadequate to address broader financial concerns, and borrowers often reach us after having been targeted by scammers. Our clients seek advice on their entire financial situation, not just their student loans, and we are prepared to deliver holistic counseling --- we just need the funding to do so.
Similar to the mortgage crisis response, credit counseling from an unbiased professional is a critical component in addressing the student loan crisis. Our HUD-sponsored housing counseling has helped thousands of homeowners find viable solutions to get back on track. But unlike the housing crisis, there is no state or federal funding to support our student loan efforts. Counseling delivery honed since the last recession has positioned us to address the next challenge, but we need your help bringing this to the forefront.
MMI has the capability to leverage your financial support by helping hundreds of thousands of consumers avoid default, find the financial stability they deserve, contribute to the economy, and live their best lives. Together, we can create systemic change while enabling MMI to continue our legacy of Improving Lives through Financial Education.
Our leadership team would welcome the opportunity to discuss this need in more detail, as well as introduce you to our caring counselors and satisfied clients.
Student Loan Counselor
Money Management International