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Cut Through the Fog

Can your CU be a beacon of hope for consumers blanketed with student loan debt?

July 15, 2013
KEYWORDS debt , loans , mortgage
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Madison, Wis., woke up to a thick fog today on a steamy, muggy summer morning.

Traffic slowed. Moods dampened. Bad hair was inevitable.

This state of meteorological affairs brought to mind a favorite blog post I discovered some time ago, “The Fog of Life,” by business consultant Alan Weiss.

Weiss poignantly shares, “There is fog in all our lives at various times. The ‘atmospheric’ conditions cause it: family, business relationships, uncertainty, fear, lack of self-belief, and so on. Many of us can quickly remove it… But many wander around in it, waiting for it to end, bemoaning their fate, cursing the poor visibility.

“You can’t go through life, let alone your career, groping about in the fog of confusion, fear, guilt, or lack of confidence.”

Reliable information can serve as a flashlight as you navigate the fog of consumer needs, eliminate mists of uncertainty with strategic plans, and sound foghorns to prevent managerial mishaps.

“Confusion, fear, guilt, and lack of confidence” will dissipate when you “jettison the demeaning baggage” of ignorance with awareness.

‘Let us go in; the fog is rising.’—Emily Dickinson

Many college students are navigating through a fog of debt, according to this week’s research.

“Outstanding student loan balances in the U.S. total roughly $1 trillion, with student loan debt following one of every five adults,” says the Urban Institute in “Forever in Your Debt: Who Has Student Loan Debt, and Who’s Worried?” Levels of student debt vary significantly by demographic.

Such debt, for example, is “more likely to be held by people with financially dependent children…who are employed…and who are never married or are cohabiting.”

The Causes and Consequences of Increasing Student Debt” are noteworthy, according to a congressional analysis, which advises:

The need for and benefits of government involvement in student lending are further examined in a recent Huffington Post article.

Consumer Financial Protection Bureau student loan official Rohit Chopra believes if “poor loan servicing or structural impediments such as a concentrated credit sector are not addressed” there will be unfortunate consequences for not only students, but the economy and perhaps even public interest.

Those facing crippling debt shun jobs with lower income potential, such as doctors choosing not to practice medicine in rural areas. Entrepreneurs are likewise discouraged.

“Borrowers with both federal and private student loans have been frustrated with the inability to refinance fixed-rate loans to take advantage of today’s historically low interest rates and their improved credit profile,” Chopra says.

More problems in the student loan industry are found in a National Consumer Law Center report, “Searching for Relief.” “A student loan ‘debt relief’ industry has sprung up in response to the demand for student loan borrower assistance. This report documents multiple problems as well as potential violations of consumer federal and state laws.”

It is supposed that the companies in question are not “providing quality services in return for the money they are charging. Such practices severely compound the pain of vulnerable consumers seeking to find resolutions to difficult student debt problems.”

Some of the problems with the “debt relief” industry:

Can your credit union be a beacon of hope for consumers fogged in with student loan debt?

‘The fog comes on little cat feet. It sits looking over harbor and city on silent haunches and then moves on.’—Carl Sandburg

Housing news is again on the misty horizon this week.

More Than a Quarter of Working Renter Households Spend More Than Half of Income on Housing,” says the Center for Housing Policy. “Nationally, working renters saw their housing costs rise by 6% from 2008 to 2011, while their household incomes fell more than 3%. Renters are stretched so thin by growing housing costs that many face impossible choices.”

Severe housing cost issues are examined in great detail in this report at the national, state, and local levels. “The share of working households with a severe housing cost burden increased in 18 of the 50 largest metro areas between 2008 and 2011.”

Reasons for recent surges of mortgage defaults are examined in another interesting paper, “Numerical Ability Predicts Mortgage Default” from the National Academy of Sciences. “This paper presents empirical evidence showing that the ability to perform basic mathematical calculations is negatively associated with the propensity to default on one’s mortgage.

“We find no support for the hypothesis that numerical ability impacts mortgage outcomes through the choice of the mortgage contract… Results suggest that individuals with limited numerical ability default on their mortgage due to behavior unrelated to the initial choice of their mortgage.”

Another trend of note on the housing front: “As Home Sales Heat up Again, Buyers Must Resort to Cold Cash,” says The New York Times. Quick market turnarounds are creating interesting situations for buyers forced to resort to all-cash offers and higher prices to boot.

“In Los Angeles, the median price on an all-cash home this year is about $351,000, compared with $230,000 in 2009. Over the same period, the median price overall increased… Last month, home prices in Southern California hit their highest level in the last five years.”

Need a foghorn? “The kind of spikes we’re seeing…seems like history repeating itself… That’s not sustainable for the long term,” says a RealtyTrac spokesman.

To cut through the fog, Alan Weiss advises, “You need simple methods and approaches… Acquire skills, take prudent risks, understand and communicate your value, jettison demeaning baggage.”

Those who are well-informed will be well-prepared to find their way in the mist.

Know the weather forecast. Be prepared to shine through the fog that inevitably rolls in. Your members believe your credit union is a lighthouse that helps them navigate to successful financial outcomes.

Enjoy the sun!






Lora Bray is a research librarian at CUNA.

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Great article! Unfortunately, most employees don’t feel valued or appreciated by their supervisors or employers. In fact, research has shown that the predominant reason team members quit their jobs is because they don’t feel valued. This is in spite of the fact that employee recognition programs have proliferated in the workplace – over 90% of all organizations in the U.S. has some form of employee recognition activities in place. But most employee recognition programs are viewed with skepticism and cynicism – because they aren’t viewed as being genuine in their communication of appreciation. Getting the “employee of the month” award, receiving a certificate of recognition, or a “Way to go, team!” email just don’t get the job done. How do you communicate authentic appreciation? We have found people have different ways that they want to be shown appreciation, and if you don’t communicate in the language of appreciation important to them, you essentially “miss the mark”. Additionally, employees need to receive recognition more than once a year at their performance review. Otherwise, they view the praise as “going through the motions”. A third component of authentic appreciation is that the communication has to be about them personally – not the department, not their group, but something they did. Finally, they have to believe that you mean what you say. How you treat them has to match the words you use. If you are not sure how your team members want to be shown appreciation, the Motivating By Appreciation Inventory ( will identify the language of appreciation and specific actions preferred by each employee. You then can create a group profile for your team, so everyone knows how to encourage one another. Remember, employees want to know that they are valued for what they contribute to the success of the organization. And communicating authentic appreciation in the ways they desire it can make the difference between keeping your quality team members or having a negative work environment that everyone wants to leave. Paul White, Ph.D., is the co-author of The 5 Languages of Appreciation in the Workplace with Dr. Gary Chapman.

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