Success Stories

Ashley’s Story

Raised by her grandmother, eight-year-old Ashley has dealt with the tragedies of a deceased mother and incarcerated father. With numerous relatives with mental and substance abuse issues moving in and out of the home, Ashley began misbehaving and needed a full-time classroom aide to keep her in control.

A local therapist began working with Ashley and her family to help create a more positive living environment. As family members got help for their own challenges, they began to create a safe space for her to flourish. Both her behavior and school work have improved, and she is now involved in constructive social activities.

When you make a financial investment in United Way’s “Strong Families, Strong Children” initiatives, your gift has a life-changing impact on children in need like Ashley.

Mom's House, a United Way partner agency located in Dover and Wilmington, is part of a national organization that provides free, licensed daycare services to low-income parents who are full-time students. The organization gives these parents the opportunity to continue their education while ensuring that their children receive the best possible care.

Renee Bullock, executive director of the two Mom's House locations, said the Dover center opened in 1995 and helps as many as 15 children at a time. The organization offers services to parents who attend area colleges, trade schools, technical schools, and high schools.

"We want moms to succeed," Bullock said. "We are there to make sure they have the opportunity to make a better life for themselves and for their children."

Mom's House provides children with a healthy and stimulating environment in which to grow and learn.

"We have lesson plans for the children," Bullock said. "They have structured activities. We don't just baby-sit."

Daycare services are offered during the times that classes are typically offered -- from 7:30 a.m. to 4:30 p.m., Monday through Friday. The staff provides services past normal business hours if moms want to come to the location to study.

The agency has numerous success stories, Bullock said. One mother will graduate from Delaware State University in May with a degree in nursing, and another will graduate from Star Technical Institute in June.

The help provided by Mom's House is essential because many single parents who are full-time students do not have time to work long hours and often have difficulty paying their bills.

"These mothers face many financial challenges," Bullock said. "That's why the daycare is free, so we can take that stress off of them."

Mom's House, like other United Way agencies that provide daycare services, benefits from United Way Success By 6^TM support, which strives to ensure that children under six are emotionally, physically, and academically prepared to enter school.

For more information about Mom's House, visit their website at http://www.momshouse.org/index.html.

Worker’s Loan Program Helps Families Escape Spiral of Debt
By Theresa Gawlas Medoff
Published in The News Journal on January 30, 2008

José (name has been changed) was just managing to keep his family afloat on what he earned from his full-time job. Then his car broke down. He didn’t have $525 for the repair, but he needed the car to get to work.  So, José turned to a payday lender in Wilmington. Five months later, José had paid $1500 in interest and still owed the original $525 loan amount.

Unfortunately, José’s predicament is all too common among the working poor in Delaware. Faced with unexpected bills or unable to pay routine expenses, they take out excessively high-interest loans which are typically due in full within two weeks. Unable to pay back the loan that quickly, they renew the loan again. Soon they’re trapped in a cycle of debt. The average payday borrower pays $800 to borrow $325, according to the Center for Responsible Lending.

United Way of Delaware, Wilmington Trust, and others have joined to promote the new “Worker’s Loan Program,” a program of West End Neighborhood House. The program aims to combat predatory lending by offering same-day loans at competitive rates with longer repayment schedules. More importantly, the program offers borrowers financial education and access to related assistance programs.

The Center for Responsible Lending reports that the typical APR for payday loans in Delaware is 417 percent. In conducting its own local research, West End Neighborhood House found loan rates that ranged from 360 percent to 1200 percent. In contrast, loans of up to $500 provided through West End’s United Way-supported Worker’s Loan Program have interest rates of 12 to 15 percent, and borrowers have up to four months to repay.

In its first 10 weeks, the Worker’s Loan Program processed 88 applications and loaned approximately $30,000, said Barbara Reed, director of Housing and Financial Management at West End. “Our typical customer is 42 to 50 years old and has an annual income of $30,000 to $40,000,” Reed noted. “We really are dealing with the working poor here.”

In an article that appeared in an October issue of American Banker, Neil Cotiaux of the Pittsburgh Home Loan (PHL) Bank, one of the program’s sponsors, called the Worker’s Loan Program “cutting-edge.” While more and more financial institutions are offering financial literacy programs, he added, few offer payday loan alternatives. West End Neighborhood House has since fielded inquiries about its innovative loan program from Baltimore, Washington, D.C., and as far away as Des Moines.

West End Neighborhood House began researching an alternative loan program 18 months ago, after finding that 25 percent of the 1500 families seeking financial help from the organization were trapped in payday debt, Reed said. “They might have been hit with funeral, car repair or education expenses, or they may be threatened with the cutoff of utilities. Their financial situation often makes them ineligible for regular consumer loans so, despite the hazards of payday loans, many families in need feel that they have nowhere else to turn,” Reed added.

The Worker’s Loan Program requires the same documentation as a payday loan: a recent bank statement (with no overdrafts), two most recent pay stubs, a driver’s license or DMV photo ID, a current utility bill, and a blank check from the applicant’s account. Like payday lenders, the program also offers quick turnaround (45-60 minutes) and immediate cash.

Unlike payday lenders, however, West End Neighborhood House seeks to help its customers achieve financial independence. All applicants receive financial counseling, which might include tips for eliminating expenses or renegotiating bills. They are given a folder with valuable consumer financial education and are offered a credit report. They also receive referrals to supportive services that can offer long-term financial solutions.

Although the loan program is currently offered only in New Castle County, Reed said that based on its success thus far, it could be expanded throughout the state through host agencies that work cooperatively with West End Neighborhood House in six locations in all three counties.

In addition to United Way of Delaware and PHL Bank, the Worker’s Loan Program receives support from AIG, Citibank, Speer Trust and Wilmington Trust. Loans are made through Wilmington Trust.