On the recommendation of donors Andrew Lachman and Ruth Messinger, FJC has provided $1 million to Hebrew Free Loan Society, which will help hundreds of New Yorkers refinance credit card debt, helping them regain financial stability.

The grant funds the Fresh Start Loan program, which provides New Yorkers of all backgrounds 0%-interest, no-fee loans to pay down expensive credit card debt.  Due in part to pressures from price inflation, the Federal Reserve reports that credit card debt is at an all-time high. For lower-income households, credit cards can carry a rate of interest as high as 36%.  This can present an insurmountable obstacle to repayment, and many New Yorkers often find themselves with high monthly payments that can drag down their efforts to regain financial stability.  

Borrowers under Fresh Start are able to consolidate and pay off these expensive loans with a new, 0% interest loan.  They can pay off these new loans over five years.  Monthly payments average $300. 

To find qualifying borrowers, HFLS receives referrals from the coaching teams at four leading financial counseling organizations: Neighborhood Trust Financial Partners, New York Legal Assistance Group, Bedford-Stuyvesant Restoration, and the Community Service Society.  In this way, the loan and the financial coaching add up to more than the sum of their parts.  The program improves borrowers’ chances of success and their ability to work out money saving arrangements with their creditors.

Case in point, one program participant who gave her name as Amanda. “As a twenty-year-old living in New York City, I found myself drowning in student debt and credit card bills that only grew worse over time as the interest compounded,” says Amanda.  “Before learning about HFLS, I had been considering filing for bankruptcy. Thanks to this $20,000 interest-free loan from the Hebrew Free Loan Society, I was finally able to manage my debt and gain the financial stability needed to stay in nursing school and save for my future.” 

The revolving nature of this grant was another compelling aspect for the donors.  When borrowers pay off their Fresh Start loans, funds are recycled immediately into new loans, multiplying the impact of the original gift for decades. Mr. Lachman and Ms. Messinger intend to contribute additional funds from their DAF account over the next several years, with the goal of increasing her commitment to $3.5 million.  According to David Rosenn, President and CEO of HFLS, this level of commitment would enable the program to originate $2 million in new loans each year indefinitely, assuming continued strong repayment performance.

“Performance on the loans is excellent, and we have had no defaults in the program,” says Rosenn.

“The Hebrew Free Loan Society represents a Jewish community that serves all in need,” says Ms. Messinger. “David is a longtime friend and colleague, who has brought creativity to the organization.”  Mr. Lachman added, “We’re always looking for targeted ways that our philanthropy can help New Yorkers in need. Helping people escape the credit card debt trap seems like something very specific that we could do.”

Another borrower, Mukarramhon, faced significant financial challenges when she needed to cover her mother’s medical expenses and her daughter’s college tuition. “As an immigrant originally from Uzbekistan and a financial counselor,” she said, “I am grateful to have benefited from this program and am always on the lookout for clients who need similar help. The support from HFLS not only helped me clear my debt but also provided peace of mind and allowed me to focus on my future. I’m now saving money, working on closing out my credit cards, and even starting a new business in tourism—a project I’m passionate about.”