Department of Consumer Affairs Launches Student Debt Clinics in Targeted Neighborhoods to Aid New Yorkers

NEW YORK, NY—The NYC Department of Consumer Affairs (DCA) Commissioner Lorelei Salas today announced the launch of DCA’s Student Loan Debt Clinics and the release of DCA’s “Quick Tips Once You Have Student Loans” to help New Yorkers understand their student loans and how to repay them. Beginning this weekend, DCA’s Office of Financial Empowerment (OFE) will host a series of student loan debt clinics in partnership with Phipps Neighborhoods Opportunity Center at Melrose, Bedford Stuyvesant Restoration Corporation, and New York Legal Assistance Group, in targeted neighborhoods to assist New Yorkers who have questions or concerns in dealing with or understanding their student loan debt. The student loan debt clinics will include free confidential one-on-one financial counseling and legal aid professionals will be onsite to provide assistance as needed.

“Since 2014, student loan debt has increased from $260 billion to roughly $1.4 trillion,” said DCA Commissioner Lorelei Salas. “Our communities are struggling to escape the crippling cycle of debt caused by the ever-increasing cost of higher education. Our Office of Financial Empowerment will continue to develop and offer innovative programs that help ease the financial burden of those individuals struggling with student debt. I encourage all New Yorkers who are concerned about their student loans to visit one of our student loan clinics to learn about ways to tackle student debt, consider options for enrolling in repayment plans, and improve their credit.”

“We are proud to partner with the NYC Department of Consumer Affairs in bringing accurate and needed information and advice to student loan borrowers, including the lower-income clients we serve,” said Beth Goldman, President and Attorney-in-Charge of the New York Legal Assistance Group. “There is widespread confusion and misinformation circulating about student loans, repayment options, and the availability of discharges. Giving consumers the chance to attend a clinic and meet with both a financial counselor and an attorney is a great way to disseminate information and ease the burden for New Yorkers struggling with student debt.”

“Student debt affects more than 44 million Americans but students from lower income families, like too many families in the Bronx, are more likely to default on those loans,” said Jonathan Ortiz, Program Director at Phipps Neighborhoods' Financial Empowerment Center. “Before borrowing, everyone should to be aware of the impact that student loans may have on their lives and be able to chart a path to financial stability as they earn a higher degree. Thanks to our partnership with DCA, today we are empowering these residents to take control of their future.”

“Student loans are a tremendous burden that cause considerable stress and anxiety to many members of the community we serve,” said Jako Douglas-Borren, Director of Program Operations, Bedford Stuyvesant Restoration Corporation. “Fortunately, there are many options to work out a reasonable payment or deferment plan. We hope for a big turn out for the Student Loan Debt Clinic on February 16, so that our team of Financial Counselors can help you get the plan that works for you.”

OFE assists New Yorkers by developing and offering innovative programs and services to increase access to high-quality, free financial education and counseling, safe and affordable financial products, and access to income-boosting tax credits and savings. The City’s Financial Empowerment Centers offer free, one-on-one financial counseling to help New Yorkers tackle debt, save for the future, open a bank account, improve credit, and much more. NYC Financial Empowerment Centers have served more than 46,000 clients since 2009 and have conducted over 80,000 counseling sessions to date. In total, Financial Empowerment Center clients have reduced over $54.3million in debt, and increased their savings by $4.3 million. New Yorkers can call 311 or visit DCA’s website to schedule a free and confidential appointment.

In December 2017, OFE and the Federal Reserve Bank of New York released the Student Loan Borrowing Across NYC Neighborhoods, 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 tended 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.

New Yorkers who are being contacted by a debt collector about their student loans can download DCA’s Debt Collection Guide, check if a debt collector is licensed and file a complaint online at nyc.gov/dca or by calling 311. Anyone seeking to collect debts from New Yorkers is required to be licensed by DCA and must include their DCA license number in all letters sent to consumers no matter where the agency is located.