Funding Freedom: Tech Loans Provide Alternative Financing

Provided by: Muscular Dystrophy Association and written by Alyssa Quintero

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”.

Program Benefits

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.”

Find Support

Connect with other parents about Assistive Technology.

Visit the My Child Without Limits support communityand talk to parents, caregivers, and professionals about their experiences.

Resources:

Looking for more information on Assistive Technology and Individualized Service Plans?

Assistive Technology Industry Association (ATIA)
(877) 687-2842 (877) 687-2842
www.atia.org

Alliance for Technology Access
(707) 778-3011 (707) 778-3011
www.ataccess.org

National Assistive Technology Technical Assistance Partnership (NATTAP)
(703) 524-6686 (703) 524-6686
www.resnaprojects.org/nattap/#content

DisabilityInfo.gov (AT resources)
www.disability.gov/education/assistive_technology

Bank of America Access loans
(800) 900-9000 (800) 900-9000
www.bankofamerica.com/vehicle_and_personal_loans

Center for Medicare & Medicaid Services
(800) 633-4227 (800) 633-4227
www.cms.hhs.gov

Digital Federal Credit Union
(800) 328-8797 (800) 328-8797
www.dcu.org/loans_visa/mobility_menu.html
Independent Living Research Utilization Directory of Centers
(713) 520-0232 (713) 520-0232
www.ilru.org/html/publications/directory/index.html

Alternative Financing Technical Assistance Project (AFTAP)
(703) 524-6686 (703) 524-6686
www.resnaprojects.org/AFTAP