One of the real reasons employers are
taking notice is because of the impact
student loan debt has on recruitment,
retention and overall employee productivity. And in the war for talent, solutions
to address student debt and reduce
costs around employee turnover can give
employers a competitive advantage.
PS: What are the ramifications, not just
for retirement, but for employees’ life
overall and for workplace health?
Moorjani: From a broad perspective, if
workers are not financially well, it hurts
their performance. Stress affects their
productivity on the job—another reason
more employers are looking at this, to
help their employees be ready and fully
engaged in the job they’re doing right
PS: How do plan sponsors and
employers integrate student loan debt
into this idea of a broader financial
Moorjani: First is the student debt
program itself, which needs to include a
broad range of education and resources.
The second helps the employee apply the
first: People want to understand, “What
impact does what I just read have on my
everyday life?” So we provide quick and
easy calculators and tools to help people
assess where they are, and the education
helps them be better prepared and take
advantage of solutions.
PS: So, what do you at Fidelity say
when you discuss this with employers?
Nigam: What we’re really excited about is
bringing a holistic solution into the market
for our clients. This solution has three
major components. The first is a student
debt employer contribution. Fidelity was
one of the first to offer a student debt
employer contribution, to its own employ-
ees—we pay $2,000 a year toward their
student loans, with a lifetime cap of
$10,000. Since then, employers have
been asking, “Can you help us do that
for our workforce to help employees pay
down their debt and help with our recruitment and retention efforts?”
This piece is really a recordkeeping solution—one that’s unique in the market,
because it’s integrated with the rest of the
systems we offer our employers or clients.
It’s integrated within NetBenefits® so the
employee can track and view payments
online alongside all their other benefits.
Employers have access through the
Fidelity Plan Sponsor WebStation [PSW]
and, depending on the plan design, can
track all of the payments they’ve made
on behalf of their employees right within
We’re piloting this solution now for a few
employers and making it available to the
broader marketplace starting in 2018.
The second piece is the student debt tool.
It’s a new kind of planning and guidance
experience we hope will empower people
to get control of their student loans. A key
problem in this market is that people just
don’t understand their complete student
loan picture; they don’t understand how
much they are paying or what their interest rate is. The student debt tool helps
people understand their student loan
portfolio and guides them toward potentially the right repayment options for them.
The third is a preventative piece, which
we call pre-college planning. The goal
is to help families avoid taking on an
insurmountable amount of debt in
the first place. It’s a proactive solution, to make people smarter about
the real cost of college. One dimension is getting people to save the right
amount, to save early, and save often.
The second is encouraging high school
students and their families to have that
financial conversation, to make sure a
college is not just an academic fit but
also a financial fit.
PS: How do you get participants
engaged with the student debt
Nigam: Both the pre-college planning
piece and student debt tool are available
through our financial wellness program.
For the student debt employer contribution piece, if a plan sponsor decides to
offer it, it’s accompanied by a simple and
personalized communications program
to drive employee awareness, enrollment,
and ongoing engagement.
PS: To sum up, what do you think are
the most important points for plan
sponsors to take away?
Nigam: Understanding that student loan
debt is a huge issue in our economy
as well as in our nation, that it is affecting a majority of college graduates, and
employers are taking notice and asking
for help because it impacts their ability
to meet workforce management goals.
You also need to approach the issue with
a holistic solution to ensure you address
the broad needs of all employees.
Thompson: I’d say, when people hear
about student debt, they immediately think Millennials, but it’s so much
broader than that. So one of the things
we’re trying to do is raise awareness
among the employers that it’s not just a
Moorjani: And because the cost of
college only continues to increase, pre-college planning is critical to help ensure
families are prepared to make the best
decision possible for their specific situation, so they’re not surprised by how it
impacts their financial wellness later. n
1 Federal Reserve Bank of NY.
2 Market Watch, 2016. www.marketwatch.com/story/every-second-americans-get-buried-under-another-3055-in-student-loan-debt-2015-06-10
3 Georgetown Center on Education and Workforce
4 The Wall Street Journal; “Student Debt Is About to Set Another Record, But the Picture Isn’t All Bad,” May 2016.
5 American Student Assistance Young Workers and Student Debt Survey by Regina Corso Consulting. N=502 young workers between the ages
of 22 and 33, January 2017. 814452.1.0