Student loan and college savings benefits provider Gradifi has launched a new service for companies to help employees manage their debt.
The interactive tools, developed with technology company Everfi, will entail short tutorials on topics like financial basics, financial responsibility, planning for milestones and higher education, said David Chang, CEO of Gradifi. They’ll be offered to the employers that already use any of Gradifi’s existing products, including Student Loan PayDown, Gradifi Refi or College SaveUp.
Chang, an angel investor and technology executive who was named chief executive four months ago, says the skyrocketing costs of college and student debt have been big drivers of demand for their products. Gradifi says the number of customers on its platform has doubled over the past year to about 700.
He says that seven out of 10 graduates end up with “significant debt, well into six digits.” But one of the biggest problems (aside from the sheer amount of debt) is a lack of general awareness of the issue, Chang says. “People just don’t want to talk about their student debt,” he says.
Often their general lack of financial knowledge can prevent them from taking meaningful steps, he says. “When we talk to employers, one of the surprises is the knowledge gap that [employees] can have,” he says.
To be sure, the cost of college continues to soar. A four-year, public school now averages $21,400, including tuition, fees, room and board, a 30% increase since 2008, according to the College Board, a non-profit that aims to increase access to higher education. For a private institution, the averages can be as high as $48,500, a 25% increases over the same period.
To help pay those higher costs, many students are taking on more debt. Overall, student debt level has more than doubled over the past decade
The average student debt is $32,000 per student, but that can obscure the fact that it can often climb much higher for some graduates, and can be a challenge even for
Gradifi is owned by First Republic Bank, but Chang says it has a separate customer base. The bank, he says, was one the first customers of Gradifi and the service became enormously popular with the bank’s employees almost immediately. The firm has about 60 employees, mostly in Boston. Chang would not disclose revenue.
