Brad O’Brien is working to change conversations around personal finance and debt. As the manager of financial education at GreenPath Financial Wellness, he develops and leads initiatives to help people get out of debt.
GreenPath is a nonprofit group that was founded in Detroit in 1961 aimed at helping people manage and get out of credit card debt. The group is still based in Detroit, but now has offices in 18 states and offers free, in-person and over-the-phone counseling services to anyone nationwide. It served about 200,000 people nationwide and 6,000 people in Wisconsin last year, O’Brien said.
Over the last two years, the group has increasingly focused on understanding the needs of people, why they make the decisions they do and destigmatizing debt by talking about it more, he said.
“There’s this general consensus that you don’t talk about money because it’s either embarrassing or shameful,” O’Brien said. “But by actually having the conversation, it helps people feel like they’re not alone and that there are other people who are actually in very similar situations.”
O’Brien will be featured as a panelist at a Cap Times Talk titled “What should Wisconsin do about student debt?” on Monday at 6:30 p.m. at the High Noon Saloon in Madison.
Ahead of the panel, the Cap Times talked to O’Brien about his role at GreenPath, what trends he sees among borrowers and what the organization is doing to assist them.
What does GreenPath offer and how does one become a client?
A lot of people come to us with partnership referrals, like UW Credit Union, or nonprofit organizations or word of mouth. The typical experience is to go through a one-on-one counseling session. We devise an action plan, we talk about goals and their situation and devise some sort of action steps moving forward.
It might be our simple payment plan, automating long-term payments on loans, or we might call a student loan lender with them. And some might need more support. We try to make sure the work we do is customized to the individual.
We’ve started a peer support group online and that has been a really insightful way to learn about people. I think, candidly, when we started it, we didn’t know what was going to come out of it, but it’s people who have these shared commonalities of financial challenges coming in this Facebook group together. There are about 1,000 people in the group. If you have a shred of commonality with somebody, regardless of where you live, that shred of commonality creates an environment where people are really supportive of each other and I think it’s important to create that conversation.
What has been the evolution of GreenPath?
If you knew GreenPath historically, it was mostly crisis management, where people would come to us with credit card debt.
We were in the mode of essentially counseling people through that. We had a program where we could work with creditors and negotiate an interest rate. That was our very traditional model for a long time. Then when the housing crisis happened back in 2007, 2008, 2009 and forward, a lot of our work was centered around foreclosure prevention. A lot of our work has been moving from one crisis to another. The real shift for us as an organization was about two years ago. We started to look internally and say, "We’re a very large nonprofit organization that is having an impact, but we’re not having as large of an impact as we feel like we need to have in order to solve the problems."
We are pivoting from this historical, core kind of model that we still operate within, but we started to look at it from a different perspective. Are there different groups we could partner with, different models we could use that we could think about and approach the work we do in order to better understand the needs of people? Then we could work with people internally to actually come up with person-based types of solutions to allow people to become more financially healthy.
Have you seen more people come in for counseling on student debt, specifically?
It’s still unusual for people to come to us just because of student loans but all these things are interconnected.
A lot of people used their deferments and forebearance during the recession and they don’t have that as an option now. They can’t kick the can down the road any more and more people are concerned about that.
Some people took out a lot of loans that have high payments, and you’re trying to live on it, and you have credit card debt and the student debt causing credit card debt to accumulate. It shows the complexity of the problems in how (student loan debt) pushed people in other places. People might be current on student loans but behind on credit card debt. It creates this vicious cycle overall.
Have you shifted your approach when it comes to dealing with student debt?
We’ve definitely shifted the approach at our organization around how we talk about student loans. It wasn’t as obvious of a problem 10 years ago.
I don’t think the pressure has been put on the real key stakeholders… it hasn’t hit the tipping point yet. Sure, default rates are changing and that will continue to put pressure on it because of high default rates, but it hasn’t started to hit the top level.
The universities get their money right away. The only hook for the university is if they have high default rates. The incentive to them isn’t as high on the front end to say, "Maybe we should educate these kids when they get in the door."
One of the things we’re really trying to focus on is that we want to learn and to understand how and why people are getting into the situations they’re in now, and how they feel about it so we can start working on solutions.
Can you tell me more about the pivot you’re having as an organization and changing the conversation? How does that play with student loans?
It’s not for us to tell people what their dream is, but for us to step back and try to create an environment where they can be successful.
It’s going to be this combination of actually changing the conversation and re-looking at how we give student loans and how kids are taught at a young age what is a reasonable amount of student loans to be able get an education and actually be successful.
The more that dialogue happens, it’s helpful. I think GreenPath has fallen into this bucket where we sometimes fall short in changing conversations, where we start prescribing solutions for people. We’ve done different things throughout the years to try to do something associated with student loans but were not using the person at the center of it and that’s a common thing to do.
Rather than feeling that we know the answer, we’re trying to better understand why borrowers feel the way they do and why they are doing the things they’re doing because that will better help us understand the solution to this, and solving the problem rather than just band-aiding it all the time.
What are consistent themes you see when people come to you?
One of the most consistent themes we see is people who are ashamed of their situation. They are kept up at night. There’s so much going on, they get lost in the shuffle and don’t know what to do. It’s a pretty common theme overall. It’s very overwhelming. We try to get a lot of feedback from the people we serve. That is one of the recurring themes: feeling depressed and ashamed and anxious.
What do you do about that then?
We work on helping people feel like they’re not alone. Sometimes people are even embarrassed talking to us, but the more you talk about it, the more you can accept it and move on. We really try to enter from a place of empathy. We’re not here to judge you on any sort of past decision you made.
What is challenging about the student debt issue particularly?
The real challenge is, you make these decisions when you’re young and probably have the least amount of information available to you. And then you graduate and you’re left with these decisions that you made when you were 18. When we talk about it, we say "It’s not your fault." You make decisions based on the information you have and the environment that you’re in. You make decisions about what you feel is relevant at the time and now as an adult you’re left dealing with those consequences and for some people it works out great, and for some people it’s just a real challenge.
We take people on any spectrum of their journey. Our goal is to figure out where they’re at and what is their next step. The sooner people start planning and trying to understand their situation, the better off they’ll be. Crisis management is unfortunately where a lot of people end up. It’s a stressful decision when it comes to your finances and next week keeps getting pushed out, especially when a certain decision is not what we’re looking forward to doing.
Where should one look for good financial advice, generally?
If you’re actively seeking advice, a nonprofit. The hope is that they’re able to give you objective, unbiased advice that doesn’t have an ulterior motive. Student loans are inherently complicated, too. There are subsidized and unsubsidized, that is going to affect how your student loan servicer operates with you. It’s important to know what kind of loans you have. Really, at the end of the day too, it’s making sure you have a plan to pay them off.