Tuition.io offers employers new weapons in war on student loan debt

Tuition.io, a student loan benefits provider, is launching two new features designed to help employers tackle their student loan debt.

The company is updating their paid time off conversion tool, which allows employees to allocate their paid time off toward their student debt balance. They are also introducing a public service loan forgiveness tool.

“Most HR and benefits executives believe student loan repayment assistance is simply contributing money to their employees student loan debt,” says Scott Thompson, CEO of Tuition.io. “But almost all of our new clients are implementing student loan benefits in new and innovative ways.”

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PTO exchange benefits have seen increased demand during COVID-19, Thompson says. Since employees aren’t able to go on vacation, they are looking for opportunities to utilize these benefits in other ways.

Typically, PTO comes with a “use it or lose it” clause, which can be very frustrating for employees, Thompson says. Since employers have already allocated those funds, they wouldn’t lose out if they were to repurpose those PTO dollars towards another employee benefit.

A PTO exchange offering benefits both employees and employers: Employees get the obvious benefit of lowering their debt balance, while companies can typically offer the program on a pre-tax basis. Tuition.io estimates that a worker converting 10 hours of PTO, at a rate of $50 per hour and after accounting for taxes, would be able to put $300 toward their student loan balance.

Tuition.io had previously offered a PTO exchange benefit to Montefiore St. Luke’s Cornwall Hospital. This updated version provides employer clients with a streamlined, one-stop shop where employees can view their total PTO hours, set up how many hours they want to convert and view the payment that has been made toward their student loans.

Employers will be able to customize their own plans, allowing them to place a cap on how many PTO hours employees can allot for student debt payment, so they don’t use all their time off.

“There was a lot of back and forth between us and the employer [previously],” Thompson says. “Now all of the back and forth is automated. The employee has one place to go, they can see what the available PTO balance is, they can see what the plan design is and essentially what the benefit is.”

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These same features played a part in Tuition.io’s public service loan forgiveness tool, which eliminates the remainder of an employee’s student debt on a tax-free basis, following 120 months of payments.

Public service loan forgiveness can provide major relief to employees struggling with the burden of educational debt. However, it isn’t always successfully implemented, because common mistakes can result in an employee being rejected for forgiveness.

From 2017 to 2020, just over 3,200 borrowers have had their loans forgiven under PSLF, according to Tuition.io research. About 97% of borrowers get denied due to preventable problems, including not having made enough payments, missing information on their applications and submitting loans that do not qualify under PSLF. With an employer provided benefit to guide them, more employees can apply and qualify for PSLF.

Tuition.io provides employees with a dashboard that shows their different loans and balances and the number of payments they’ve made so far. There will also be a section with a collection of all the forms they will need to fill out in order to apply for PSLF and automatic annual reminders. Employees will also have access to decision making tools and student loan coaches.

“Even though the economy is still a little uncertain and unsettled, we’re having a lot of conversations with larger employers who need to find a way to help [their] employees,” Thompson says. “These two [programs] are cost neutral and provide very big benefits.”