PLANSPONSOR - December 2021 - January 2022 - 37

2022 INNOVATION ISSUE | STUDENT LOAN DEBT
in February, " says Jennifer Doss, senior
director, DC [defined contribution] practice
leader, with CAPTRUST in Raleigh, North
Carolina. " You're going to see much more
interest in this when people have to start
making payments again. "
That interest may have even more
employers looking to incorporate student
loan repayment into their benefits
program, as they contemplate how to up
their employer value proposition, particularly
amid the Great Resignation.
For companies offering Fidelity's
student loan products to their employees,
there was a 78% decrease in turnover
among employees with student loans.
" There are many really great recruiting
benefits for employers that want to
help with student loans, " says Amanda
Hahnel, head of student debt retirement
at Fidelity in Boston.
An Ongoing Issue
Student loans threatened workers' retirement
security even pre-COVID. A 2019
study by TIAA and the Massachusetts
Institute of Technology (MIT) AgeLab
found that nearly three out of four
borrowers said they were not maximizing
their savings, due to their student debt.
These included 29% of 25- to 34-year-olds
and 43% of parents and grandparents
helping their children or grandchildren
repay college loans.
Among Americans with student
debt, the average balance for federal
loans is nearly $37,000 per borrower, and
the average balance on private loans is
nearly $50,000, according to Education
Data Initiative. That debt can drag on a
borrower's finances for decades: Twenty
years after entering school, half of
student borrowers still owed an average of
$20,000 on their loans.
" These student loan balances prevent
workers from purchasing a home or moving
out of their parents' basement, purchasing
a vehicle, starting a family or saving for
retirement, " says Heather Garbers, vice
president of voluntary benefits and technology
for Hub International in Denver.
" We also know that poor financial wellness
affects employees both mentally and
physically, causing them to be distracted at
work, depressed and, long term, can lead to
significant health issues. "
Further, the pandemic has refocused
employers on holistic financial wellness
overall and highlighted that personal
finance challenges can have a direct impact
on employees' ability to save for retirement.
" There's a parental aspect to this for
the employers, " Doss says. " They want
folks to be able to retire, and student loans
are affecting that. The employers want to
do something to fix that. "
Moreover, the problem is only getting
bigger. Student loan debt in the U.S. is
growing six times faster than the nation's
economy, according to EducationData.org.
Different Solutions
The types of student loan programs an
employer can offer vary significantly,
depending on factors such as the demographics
of its employee population, its
benefits budget and its benefits department's
objectives.
Student loan benefits may include
some or all of the following: financial
wellness education focused on debt repayment
in general, or student loans specifically;
tools or advice regarding student
loan consolidation or refinancing options;
access to student loan refinancing platforms,
with or without employer subsidization;
direct student loan payments made
by employers; a matching student loan
repayment program tied to retirement
plan contributions; financial wellness
education and advice on saving for college
or on the best approach to borrowing-
often for employees' children; and assistance
with tuition for current students to
reduce or forestall future college debt.
The Coronavirus Aid, Relief and
Economic Security (CARES) Act allowed
employers to make tax-free payments
worth up to $5,250 per employee annually
toward student loan payments or other
education-related expenses such as tuition.
That provision is available through 2025,
but employers were relatively slow to adopt
it while the federal student loan payment
moratorium remained in effect.
" They didn't have the immediacy or
urgency while loans were on pause, " says
Dennis Elliott, head of products and platforms
at T. Rowe Price in Owings Mills,
Maryland. " Now we're seeing a significant
resurgence and significant interest from
plan sponsors. "
Some 97% of T. Rowe Price's clients
have expressed interest in student loan
benefits, with nearly two-thirds saying
they would like to implement one in the
next year, Elliott says. In partnership with
SoFi, a company that refinances student
loans, T. Rowe Price works with employers
to implement one of three levels of student
loan benefits: education; access to a SoFi
debt counselor to discuss refinancing and
other options; and employer contributions
to student loans.
Fidelity has also noticed increased
demand for its plan sponsor student loan
products. The number of new clients
signing up for the company's student debt
platform grew 149% year-to-date in 2021
compared with 2020.
The company sees the benefit firsthand.
It began offering up to $10,000
in student loan payments to eligible
employees in 2016 and boosted that lifetime
cap to $15,000 last year. More than
10,000 Fidelity employees have used the
program to date, saving an average of
$7,000 each. Half of those who joined the
company after the program launched said
it was a major factor in their signing on.
Communications
Clearly and regularly communicating
about student loan benefits to employees
is key to their success. " Hit them from
different angles, and do it periodically, not
just during open enrollment, " Doss says.
There is an even greater opportunity
to spread awareness of such benefits right
now, as employees may be giving more
thought to their student loans as they need
to start budgeting for payments again.
-Beth Braverman
PLANSPONSOR.COM December 2021 - January 2022 37
http://www.EducationData.org http://www.PLANSPONSOR.COM

PLANSPONSOR - December 2021 - January 2022

Table of Contents for the Digital Edition of PLANSPONSOR - December 2021 - January 2022

INSIGHTS
RULES & REGULATIONS
UPFRONT
ESG Interest Piqued
2021 Best in Class DC Providers
Ramping Up Offerings
Annuities Still Misunderstood
Student Loan Repayment
FIDUCIARY FORUM
INSIDE ANGLE
PLAN PROFILE
PLANSPONSOR - December 2021 - January 2022 - Cover1
PLANSPONSOR - December 2021 - January 2022 - Cover2
PLANSPONSOR - December 2021 - January 2022 - 1
PLANSPONSOR - December 2021 - January 2022 - 2
PLANSPONSOR - December 2021 - January 2022 - 3
PLANSPONSOR - December 2021 - January 2022 - INSIGHTS
PLANSPONSOR - December 2021 - January 2022 - 5
PLANSPONSOR - December 2021 - January 2022 - RULES & REGULATIONS
PLANSPONSOR - December 2021 - January 2022 - 7
PLANSPONSOR - December 2021 - January 2022 - 8
PLANSPONSOR - December 2021 - January 2022 - 9
PLANSPONSOR - December 2021 - January 2022 - UPFRONT
PLANSPONSOR - December 2021 - January 2022 - 11
PLANSPONSOR - December 2021 - January 2022 - 12
PLANSPONSOR - December 2021 - January 2022 - 13
PLANSPONSOR - December 2021 - January 2022 - 14
PLANSPONSOR - December 2021 - January 2022 - 15
PLANSPONSOR - December 2021 - January 2022 - ESG Interest Piqued
PLANSPONSOR - December 2021 - January 2022 - 17
PLANSPONSOR - December 2021 - January 2022 - 18
PLANSPONSOR - December 2021 - January 2022 - 19
PLANSPONSOR - December 2021 - January 2022 - 2021 Best in Class DC Providers
PLANSPONSOR - December 2021 - January 2022 - 21
PLANSPONSOR - December 2021 - January 2022 - 22
PLANSPONSOR - December 2021 - January 2022 - 23
PLANSPONSOR - December 2021 - January 2022 - 24
PLANSPONSOR - December 2021 - January 2022 - 25
PLANSPONSOR - December 2021 - January 2022 - 26
PLANSPONSOR - December 2021 - January 2022 - 27
PLANSPONSOR - December 2021 - January 2022 - 28
PLANSPONSOR - December 2021 - January 2022 - 29
PLANSPONSOR - December 2021 - January 2022 - Ramping Up Offerings
PLANSPONSOR - December 2021 - January 2022 - 31
PLANSPONSOR - December 2021 - January 2022 - 32
PLANSPONSOR - December 2021 - January 2022 - 33
PLANSPONSOR - December 2021 - January 2022 - Annuities Still Misunderstood
PLANSPONSOR - December 2021 - January 2022 - 35
PLANSPONSOR - December 2021 - January 2022 - Student Loan Repayment
PLANSPONSOR - December 2021 - January 2022 - 37
PLANSPONSOR - December 2021 - January 2022 - FIDUCIARY FORUM
PLANSPONSOR - December 2021 - January 2022 - INSIDE ANGLE
PLANSPONSOR - December 2021 - January 2022 - PLAN PROFILE
PLANSPONSOR - December 2021 - January 2022 - Cover3
PLANSPONSOR - December 2021 - January 2022 - Cover4
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