Non-profit helps students save money

By: Kyle Hansen

Posted: 3/21/07

Lenders for Community Development, a not-for-profit organization, offers low-income students matching funds to help pay for education.

Liz Givens, the organization's director of development, said that helping people to build their assets is more important than just raising someone's income.

"Our organization believes that assets, like an education or a home, are the important foundations of a future."

Lenders for Community Development helps people to build their assets by providing training in budgeting and financial management and by providing matching funds to help people fund their education, buy a home or build their own business, Givens said.

Participants in the Individual Development Account program are required to complete 12 hours of training in addition to contributing to a savings account each month for two years. The funds they contribute to the savings account are matched by the organization two for one, Givens said. The participant can save a total of $2,000 and receive up to $4,000 in matched funds.

"The underlying idea of the IDA program is to help low income people improve their lives through making changes in behavior and changes in their assets," said IDA Program Manager Gwendy Donaker Brown. "We have found that it is a winning combination to help people develop the financial skills and provide financial support to help them achieve their goals."

Givens said that the funds come from the federal government, private foundations and individual donors.

The funds are not unlimited, but the organization currently has about 100 open positions for the whole Bay Area, Donaker Brown said.

Participants must meet income requirements, Donaker Brown said. The maximum 2006 income for an independent student is $19,600, or 200% of the federal poverty limit. For a family of four, the household income limit would be $40,000.

The funds can only be used for educational expenses such as tuition, fees and books, Donaker Brown said. The money cannot be used for housing or transportation.

Donaker Brown said that some of the real value of the program comes from the educational aspect rather than the financial assistance.

"Some people come into the program thinking they just have to take the classes to get the money," she said. "But it often turns out to be the most beneficial part."

Lenders for Community Development also have a small business loan program for people who want to start or expand their own businesses.

Givens said that the business loans are for people who are not able to get a loan from a traditional bank but have a valid business plan. The organization has professionals that work with them and give advice and training for business owners.

The small business loan program is based on the same micro-loan model that is being used in third world countries, Givens said.

"The loans are for people who need a small amount, have little experience and little or no credit," Givens said.

Coleetta McElroy, the assistant director of the financial aid and scholarship office, said that there are many ways for students to get help to pay for their education.

The financial aid office, unlike lenders for community development, is focused on administering government aid, McElroy said. Students who are interested should fill out the Free Application for Federal Student Aid as soon as possible.

"It is not too late to still apply for financial aid," McElroy said. "There are more students applying for financial aid, so for maximum funding we tell students to apply right away."

"They should not delay too much longer," she said. "And reply to our requests for documents as soon as possible."

Students interested in the Lenders for Community Development IDA savings program can call 1-866-364-4391 or e-mail gwendy@L4CD.com. More information about the business loans is available at 1-866-299-8173.