Oakton,
Va., Oct. 16, 2006—The
national Ways to Work car
loan program has helped working
families achieve remarkable
gains in income, job retention
and quality of life, according
to a new independent evaluation.
Northern Virginia Family Service
(NVFS) has operated a Ways
to Work program in Oakton
for more than two years, helping
67 families advance.
“Ways to Work serves a critical
need in this area by providing
affordable credit to families
who would otherwise struggle
to buy a car,” said NVFS President
and CEO Mary Agee. “Having
a reliable car allows many
of these clients to move into
better paying jobs and to
have more time to spend with
their families. This national
evaluation reinforces our
on-the-ground experience in
Northern Virginia.”
Since
July 2004, the NVFS Ways to
Work program has guaranteed
67 loans totaling about $202,000
during its two years of operation.
Loans are made by Virginia
Commerce Bank and guaranteed
by Ways to Work. NVFS clients
are typically single mothers
working in service-sector
jobs. In many cases, mass
transit in the community cannot
fully meet the needs of the
population served by Ways
to Work—low-wage workers going
to jobs or taking children
to day care and school.
“The numbers show that giving
working families access to
even modest loans will lead
to higher incomes and a better
quality of life,” said Sharon
LeGrande, NVFS Ways to Work
program manager. “The loans
have a substantial impact.”
The
evaluation by the OMG Center
for Collaborative Learning
in Philadelphia documented
that Ways to Work clients
are going on to open up bank
accounts or take out new loans,
fulfilling the program’s goal
of helping clients become
creditworthy and involved
with mainstream financial
institutions.
Ways
to Work provides loans of
as much as $4,000 to qualifying
working families. Qualified
borrowers must also be deemed
non-creditworthy by mainstream
financial institutions in
order to receive the 8 percent
interest loans. More than
nine out of 10 Ways to Work
clients use the loans to purchase
used cars.
The
evaluation found that Ways
to Work clients saw their
average take-home pay increase
by 41 percent and that more
than 80 percent of the program’s
clients reported that owning
a car had helped them hold
onto a job and reduce lateness.
A significant majority of
clients also reported that
having a car had improved
their quality of life, helped
them provide better care for
their children and allowed
them to dedicate more time
to education or job training.
“The
evaluation makes clear that
these loans have led to better
jobs, more stable employment
and a better life for thousands
of families in Northern Virginia
and across the country,” said
Jeffrey E. Faulkner, president
of Ways to Work. “These are
effective investments we’re
making.”
A
key focus of Ways to Work
is to help clients establish
better credit records and
become better equipped to
handle their finances. NVFS
requires that clients take
financial literacy training
and offer money management
seminars in partnership with
Capital One.
“We
work with our clients to make
sure their spending is matching
their budget,” LeGrande said.
“We want them to have the
tools to not only pay off
our loan, but to improve their
financial situation enough
that they can take out new
loans in the future—to buy
the next car or ultimately
a home.”
Ways
to Work has achieved a strong
repayment rate, with more
than 87 percent of loan funds
having been repaid during
the past 10 years. LeGrande
added that the program’s clients
speak enthusiastically about
how owning a car has allowed
them to be more active in
their churches and communities,
or to take their children
to participate in after-school
activities.
Ways
to Work began operation in
1984 as the Family Loan Program
within the McKnight Foundation
in Minneapolis. The foundation
launched the loan program
after holding focus groups
with women who were leaving
welfare. The women made clear
that a key need was access
to low-cost loans that would
help them move to self-sufficiency.
Since
its launch, the program has
received important financial
support from McKnight and
other foundations; the federal
government, especially the
Federal Transit Administration,
which has committed $16 million
through the Job Access and
Reverse Commute program; and
major private companies, including
Bank of America, which provided
$8 million in low-interest
loan capital in 1999.
Now
based in Milwaukee, the program
operates in 48 communities
in 24 states. It has helped
more than 23,000 families
stabilize or improve their
financial situation through
over $36 million in loan funds
used to purchase vehicles,
repair them or for other work-related
purposes. For a copy of the
OMG evaluation, visit www.waystowork.org.
Ways
to Work is a unique Community
Development Financial Institution
based in Milwaukee, WI. Through
a network of loan offices
across the country, Ways to
Work provides small, short-term,
low-interest loans to working
poor families with challenging
credit histories. The program
provides an alternative to
predatory lenders for people
with a demonstrated commitment
to achieving increased self-sufficiency
and intent on pursuing a higher
degree of success in mainstream
financial markets.
Established in 1924, Northern
Virginia Family Service is
a private, non-profit community
service resource dedicated
to helping individuals and
families find new paths to
self-reliance and brighter
futures. Each year, NVFS helps
more than 20,000 people find
affordable housing, counseling
and child care; access to
low-cost medical and dental
services; foster and respite
care, job training; trauma
recovery; and much more. For
more information, visit www.nvfs.org.
