Tech loans provide alternate financing
People with disabilities and their families face a constant struggle to secure adequate funding for assistive technology and equipment. Communication devices, mobility aids, adapted vehicles and home modifications are all costly, and their purchase isn’t always covered by insurance.
Many families take on a serious financial burden as they attempt to pay for assistive technology devices and services.
A little-known funding option is the Alternative Financing Program (AFP), a federal/state loan program that grants low-interest loans to people with disabilities, their parents, relatives or advocates in order to purchase assistive technology or services. People who don’t qualify for traditional bank loans may find AFPs more receptive to their applications.
“The bottom line is that people can’t do without assistive technology,” said Susan Tachau, executive director of the Pennsylvania Assistive Technology Foundation (PATF). “There aren’t enough grants to cover all of this, and the loan program is an affordable option.”
The program, which began nationwide in 2000, continues to evolve into an important piece of the funding puzzle. Currently, AFPs operate in 33 states and U.S. territories. While the overriding purpose is the same — providing low-interest loans for assistive technology — the programs vary from state to state.
Nell Bailey, project director for RESNA’s (Rehabilitation, Engineering & Assistive Technology Society of North America) Technical Assistance Project, said the loans are commonly used to purchase big-ticket items, including adaptive vehicles, home modifications, computer hardware/software, communication devices, and mobility equipment (scooters and power or manual wheelchairs).
A Look at Alternative Financing Programs
The Assistive Technology Act of 1998, administered by the National Institute of Disability and Rehabilitation Research (NIDRR), helped establish alternative financing loan programs. The Rehabilitation Services Administration (RSA), which falls under the U.S. Department of Education’s umbrella, provides grants for states to establish, enhance or maintain loan programs for people with disabilities.
The loan programs began in 2000 with $3.8 million in federal financing. By providing a matching amount, six states established alternative, state-based assistive technology financial loan programs.
During the 2002-03 fiscal year, RESNA reported that AFPs had provided or facilitated loans totaling $15.5 million to 1,515 individuals with disabilities since the program’s inception. The largest percentage of borrowers fell between 40 and 69 years of age, and about 70 percent of loan recipients were unemployed.
Joey Wallace, a public policy analyst and executive director of Virginia’s Assistive Technology Loan Fund Authority (ATLFA), explained, “The primary reason that people apply for loans is because there’s a real dilemma that exists between the wonderful development of technology in the lives of people with disabilities and the means by which to acquire assistive technology.”
The alternative financing loan programs provide consumers with a viable option that can improve their employment, education, health care, and family and community living situations by making the technology they need available.
Benefits of obtaining an AFP loan include low-interest rates, loan guarantees, extended repayment periods, support services to keep payments current, and the opportunity to build credit or improve a low credit rating.
Nancy Meidenbauer, project coordinator for RESNA’s Alternative Financing Technical Assistance Project, said AFPs also can provide credit counseling referrals in order to help people qualify for loans in the future if they don’t qualify the first time.
Agencies must set up AFPs as consumer-controlled programs, Tachau noted. More than half the members of the board that decides on loan applications must be people with disabilities and family members of people affected by disabilities.
For example, in Pennsylvania, if the bank denies a traditional loan application for a piece of assistive technology, PATF’s board will review the application, run a credit report and review it with the consumer. If the board rules that the consumer can repay the loan, it will provide a loan guarantee for the bank.
“We offer a program that no bank will offer, and we’ll take a risk on someone if they can demonstrate an ability to repay the loan,” Tachau added.
In many cases, a person’s creditworthiness helps determine the loan amount. With the board’s guarantee, a person in Pennsylvania could borrow up to $25,000. Tachau also said that some loan programs will make rescue payments to keep people current on their loans; the consumer then repays the program once the loan is paid in full.
Sue Castles, loan program coordinator for the Illinois TechConnect Program, said that out of 276 loan applications, 259 didn’t meet bank standards on the first try. The applications, however, were approved and guaranteed by TechConnect’s board upon second review.
Many AFPs are likely to make some allowances for bad credit, especially if the credit issues are related to a person’s disability, Castles said.
Michele Seybert, the marketing coordinator for the Michigan Assistive Technology and Telework Loan Funds program, added, “It’s an important resource, and the free monies just aren’t there throughout the country. So, this is at least a viable alternative for people.”
Loans Pay Off for MDA Families
|Thanks to loan assistance from the Florida Alliance for Assistive Services and Technology, Christopher Rhoades and his family purchased a used, adapted minivan. Rhoades operates the door and ramp with a remote control.|
In Clearwater, Fla., Tracie Wiechmann and her family needed to purchase an adapted van so they could transport her son, Christopher Rhoades, who has Duchenne muscular dystrophy and uses a power wheelchair. But, like many parents in similar situations, Wiechmann and her husband already had gone through their savings and had to rely on credit cards to pay their bills.
When Wiechmann began having to support and lift Christopher, 17, in order for him to transfer from the wheelchair to the front seat of the family vehicle, she decided that something had to be done. The situation was dangerous for both Wiechmann and her son, and it was embarrassing for Rhoades.
After speaking to some people at the local MDA office, Wiechmann learned about the Florida Alliance for Assistive Services and Technology’s (FAAST) alternative financing loan program.
“We had a very positive experience with it,” Wiechmann said. “I would definitely look into whether we’d be eligible to do this again. There are no drawbacks.”
|After finding the Illinois TechConnect Program, Jordan and Jeremy Sovereign modified their bathroom by adding a new sink and counter at a more accessible level for their power wheelchairs.|
With the loan, Wiechmann purchased a used, adapted minivan that allows Christopher to be “in control because he doesn’t have to rely on me to lift him.” He simply uses a remote control to operate the side door and ramp.
“What you’re able to achieve by getting the adaptive equipment will help so much in your daily life, so it’s worth getting a loan for it,” Wiechmann said. “There are a lot of people out there who don’t have any other financial options, so there’s no reason not to look into this program.”
Wiechmann suggests that you ask as many questions as possible about the loan programs, and that it’s crucial to keep notes of all calls regarding your loan application. Staying proactive and following up with its status makes the process run smoothly.
When Albert Freedman and his family purchased a home in West Chester, Pa., that needed extensive home modifications to make it fully accessible for their son, the Freedmans stumbled upon the Pennsylvania Assistive Technology Foundation.
"I didn’t know this program existed, but we found it on a list of local support and funding agencies, and by asking questions, people made it possible,” Freedman said.
The Freedmans used the loan to transform the garage into an accessible bedroom and bathroom for Jack, 11, who has spinal muscular atrophy.
|The Freedmans borrowed funds from the Pennsylvania Assistive Technology Foundation to make their home fully accessible for their son, Jack, who has spinal muscular atrophy.|
The Freedmans borrowed funds from the Pennsylvania Assistive Technology Foundation to make their home fully accessible for their son, Jack, who has spinal muscular atrophy.
Freedman said the loan process was easy, a factor he “really appreciated because so much is so hard when you take care of kids with this kind of condition.”
His advice for families in similar situations: “Don’t be discouraged by the magnitude of what we all have to do to take care of our kids. There are resources out there, and there are people that want to help.”
In Bloomington, Ill., Jordan and Jeremy Sovereign, 23, had to “dig deep” until they discovered the Illinois TechConnect Program. The twins, who have Duchenne MD, and their parents, Steve and Debra Sovereign, lived in an accessible home, but the bathroom needed to be modified to better accommodate their power wheelchairs.
With their father as the co-signer, Jordan and Jeremy qualified for the loan and used it to rebuild the bathroom. It now has a wheel-in shower, tile on the floor and walls, easy-to-access shelves for towels, a new sink and counter at a comfortable level, and a higher toilet.
“They have made it [life] easier in order for us to do the things that most people take for granted,” Jordan Sovereign said. “Now, we can get ready for the day faster and without feeling completely exhausted after struggling with the obstacles.”
Steve Sovereign explained, “The TechConnect program gave us the freedom to make the specific modifications we needed without restrictive questioning or an inordinate amount of red tape, which other loans or grants might require.”
Sovereign also said that using a loan to make the necessary modifications feels “less burdensome than a grant would be for the taxpayers since we are repaying the loan.”
Find out more
For a list of state alternative financing loan programs, visit the RESNA Alternative Financing Technical Assistance Project Web site at www.resnaprojects.org/AFTAP/RESNA.html or call (703) 524-6686.