PLANSPONSOR - August/September 2021 - 37

FINANCIAL WELLNESS | STUDENT LOAN DEBT
various businesses also work with tuition.
io or SoFi-companies that offer education
assistance benefits-to provide help with
loan repayment.
Akin Gump Strauss Hauer & Feld
LLP, the PSOY winner in the Corporate
401(k) Greater Than $300 Million to
$1 Billion category, launched a student loan
repayment program with SoFi, in 2016.
The program is to help attorneys at the
associate level during their first year with
the firm. Employees register their loan
with SoFi, with Akin Gump contributing
to the loan through the platform, the firm
explains. SoFi then sends the payment to
the loan provider. More than $20 million
in employee student loans has been refinanced
through the partnership.
If an employer has a budget that
allows it to set aside some money for a
student debt repayment program, it can
extend such a benefit.
Provider Fidelity Investments, for
example, currently offers clients two
student debt programs. With its directhelp
benefit program, employers can
make contributions to their workers'
loan repayment, plus Fidelity offers a
student debt retirement tool. " [With this
tool], if you pay your student loans, your
employer will make a contribution to a
retirement fund to help prepare you for
the future, " Hahnel says.
Companies yet to offer a program
might be motivated to do so by findings
of Barilla America, a PSOY finalist in
this year's Corporate 401(k) Greater Than
$50 Million to $150 Million category. The
company interviewed its employees and
found that most said they would save at
a higher rate for retirement were it not
for student loan debt. The company is
considering matching what employees put
toward their debt, or possibly making a
direct payment on it, up to 6%.
Laurel Taylor, CEO and founder of
FutureFuel.io, a technology platform that
works with clients on student debt management
and repayment needs, says she has
noticed that some employers took up a
provision of the Coronavirus Aid, Relief
and Economic Security (CARES) Act
that allows plan sponsors to make $5,250
of tax-free contributions per employee
toward eligible education expenses,
including tuition or student loan assistance,
without raising the employee's
gross taxable income.
Before the pandemic, in 2019, an
SHRM survey found that 8% of employers
offered taxable contributions to help their
employees repay student loans. Taylor
suspects that this figure has since risen and
even anticipates a new wave of employers
adopting student loan repayment programs,
given that the Consolidated Appropriations
Act of 2021 extended the CARES Act
benefit through 2025.
" I would imagine that the 8% has
grown to somewhere around 12%, " Laurel
says. " I think, moving into 2022, it's going
to be anywhere from 15% to 20%. "
Employers without a formalized or
set plan have several other options to help
their workers struggling with debt, Hahnel
says. First, they can provide a benefit that
focuses on a debt strategy.
" Employees can grab information
about their student loans, receive some
customized guidance via their employer
on what their payment options are and how
they can estimate their financial needs,
and understand how all of their student
loans come together in one picture, " she
says. Having a glimpse of their full financial
picture can relieve a portion of that
financial stress, Hahnel says.
Employers not having a budget dedicated
to student loan repayment, Taylor
says, should urge their workers to enroll in
an income-driven repayment plan, where
a monthly student loan payment is set up
based on income and family size. Doing
so encourages employees to pay off their
debt while taking into consideration other
financial needs. " Employers that don't
have the budget still want to bring meaningful
tools to their employees that help
them better manage and accelerate the
paydown of their debt, " Taylor says.
Employers can also consider implementing
tuition or wellness reimbursement
plans and use the budget from those
programs to help employees pay down
student debt, Taylor says. She has seen a
trend in tech-driven clients that work with
FutureFuel.io letting their employees
list student debt as a wellness expense
instead of electing other options such as a
gym membership or pet insurance.
-Amanda Umpierrez
Health Care Workers Battle Debt
EMPLOYEES working in the health care industry-who continue to face a tumultuous
time battling the coronavirus pandemic-have among the highest student debt burdens,
averaging $690 a month, according to Fidelity Labs' Student Debt Tool. This is $100 per
month greater than in the second-leading industry.
" With the pandemic and all other constraints and stressors, these workers average
more in student debt and are facing a lot of pressure because of the degrees they need to
do their job, " says Amanda Hahnel, of Fidelity Investments.
Laurel Taylor, of FutureFuel.io, says she has seen a number of sponsors in this
industry implement the Coronavirus Aid, Relief and Economic Security (CARES)
Act $5,250 student loan debt provision. She urges these employers to also direct their
employees to student loan repayment programs, along with public service loan forgiveness
plans, given the low income of some of these workers.
" Many caregivers that work for qualifying institutions actually make below-market
income, " Taylor says. " These hospitals are trying to figure out ways to demonstrate that
they are the best to work for and that they care about their people. " One way to do that
could be through help with student loan debt, she says. -AU
PLANSPONSOR.COM August - September 2021 37

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