Creating opportunities for employees to put away money for savings or retirement is top of mind for companies. But for many workers, student loans are standing in the way of their ability to take advantage of those benefits.
Insurance company TIAA and social impact technology startup Savi recently launched a partnership to offer a new debt-management solution that guides public-service employees seeking federal student loan forgiveness through the eligibility application. Already, employees across 100 nonprofit, healthcare and university systems are slated to have approximately $286 million of their student debt forgiven.
“We are successful in helping our clients meet their retirement goals, but we also know that it has become such a burden for people to repay their student loans,” says Shelly Eweka, senior director at TIAA. “We were looking for a solution where we could really help our clients not only navigate and pay off their student loans, but become eligible to obtain forgiveness.”
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Traditionally, the Public Service Loan Forgiveness (PSLF) program — a federal program that can forgive student loan debt of qualifying employees of government organizations and nonprofits — is known for being riddled with complex rules, requirements and document management that can prohibit individuals from effectively applying. TIAA’s new solution, which is offered as an employer-provided benefit, helps participants navigate the PSLF and will identify and flag issues directly related to a borrower's eligibility, before submitting an application on their behalf.
Forgiveness is the goal, according to Eweka, but should that not be an option for any given worker, TIAA and Savi have also built solutions for employees to help them better manage paying off their loans. With the help of Savi’s software, employees at participating institutions will receive a snapshot and suggestion of the immediate savings they should aim to set aside from their current income, helping them create a repayment plan that won’t negatively impact their lifestyle.
“The algorithm is taking into account not just the amount of debt, but your individual circumstances,” Eweka says. “Things like your family and your tax situation, and it helps fit solutions based on your individual needs.”
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Clients and institutions currently offering this solution include Temple Health, Boston Medical Center and the University of Kentucky, which is currently expecting nearly $17 million in total projected forgiveness for its employees, with an average forgiveness of more than $35,000 per eligible employee, according to TIAA. Thanks to those early success stories, TIAA and Savi currently have approximately 150 more companies vying for the opportunity to add their solution to their services.
“When you're in a program like this, you have a plan and you can see the light at the end of the tunnel,” Eweka says. “It becomes something that you can afford and that alone just reduces the level of stress employees have and gives them the confidence that they’re going to make it through.”
