Maggie Ruvoldt and Will Sealy will dig into how LEARN––a leading national organization providing academic and autism services––adopted student loan benefits to better serve its employee base. With Summer, it rolled out three products (Student Loan Advisory, Student Loan Contribution, Tuition Reimbursement) to its 6,500 employees, and saw an average monthly savings of $340 and lifetime savings of $41,000 across participating employees. Their presentation will explore the complexities of student loan benefits, misconceptions around their utility and impact, how they fit into a larger benefits package, and the impact they have on employee groups.
Transcription:
Transcripts are generated using a combination of speech recognition software and human transcribers, and may contain errors. Please check the corresponding audio for the authoritative record.
Deanna Cuadra (
Hello and welcome everyone to Turning Student Debt Chaos into Opportunity. A case study on Learn the Session will dive into how to effectively help your employees manage their student loan debt and hopefully improve their overall wellness. Just a bit of housekeeping here. This event is SHR RM certified for up to 2.25, PDCs towards SHRM, CP or H-M-S-C-P recertification. If you have any questions on how to obtain your credits, please refer to the event website, the main page of the attendee hub, or send a message directly to Heather in our chat. Yes, questions are welcomed, but we will hold responses until the end of the session to get as many as possible. If you have other questions or need help during the session, again direct it into the chat, but just do not send it anonymously. Heather is managing both chat and q and a and won't be able to respond if they don't know who you are.
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Alright, well without further ado, let me introduce our wonderful speakers. We are joined by Maggie Revolt, chief Human Resources Officer at Learn Behavioral and National Healthcare Center, dedicated to children with autism and special needs. We are also joined by Will Sealey, the founder and CEO of Summer, a student loans and education benefits provider. Before we jump into questions here, just a little bit of context with Summer Learn rolled out three products, student loan advisory, student loan contribution, and tuition reimbursement to its 6,500 employees, they saw an average monthly savings of $340 and lifetime savings of $41,000 across participating employees. That's obviously a great outcome, an ideal outcome. So I want to first ask essentially, how did this all get started? How did you two first connect? What inspired this partnership and ultimately this new benefit for Learn employees?
Margaret Ruvoldt (
Well, I'll get started. First of all, thanks for having us on to be able to talk about this. I've been really pleased with how this has impacted Learn employees and I think it's a timely and important topic to be talking about. So it all started actually across a dinner table. Ironically, I was at an HR conference, HR transform, and I had been for months looking at different vendors to help us think about, we have a very complex set of needs around student loans, around all the different tuition and educational benefits that we offer our employees. And I'd also been thinking a lot about retention and attracting new employees. So all these things were kind of coming together and I happened to sit at this dinner table across from somebody from summer and just in the natural course Ted, so tell me a little bit about what you do.
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And as she began to talk about it, I thought, I've been thinking I needed to work with all these different kinds of vendors and this was going to be a multi-vendor solution, which I really didn't want to have to do. And I felt like over the course of that conversation, not only was I hearing the breadth of solutions to what I was hoping for, it was coming from a place of such incredible knowledge and sensitivity to what our employees were dealing with and what I was thinking about that I just felt like a really great connection. And I think as a leader you're looking for two things. You're looking for the right solution, but you're also looking for the right team to help you with that solution. And I felt in that conversation that I was talking to somebody who was coming from the right team. So that's how it all got started. I dunno, will if you want to add anything to that,
Will Sealy (
I just think Maggie really covered it well. The only thing I'd suggest or I'd add to that is just the fact that we're always looking for CHROs and HR leaders that like Maggie are monitoring the challenges their employees are facing and also mindful that yes, they don't have all the time in the world. Where can they bring in a solution that is almost in some ways a set it and forget it, where there's in many ways guaranteed results that they can highlight and show to their CFO, their COO, their CEO, that this is solving a real pain point for employees but is directly tied to employee performance and loyalty and longevity of those employees. And so it was just fantastic meeting with Maggie because she immediately got it as how we were connecting the dots for her in that regard. We also meet regularly with HR leaders that are, I've got 80,000 problems, why should I worry about this one? And then we do our part to share here's why it matters. But I think that's just the only thing I'd add.
Deanna Cuadra (
And then will, I would love if you could tell us a little bit more about the program Summer provides essentially how are you guys tackling the student loan crisis from all angles?
Will Sealy (
Yeah, I think student debt is one of the biggest pain points in the financial wellness umbrella. And I think HR recently, over the last decade certainly has been in the healthcare space for employees, has been asking the question, do we also need to be in the financial health space too? That's stressful. Healthcare is hard enough as it is to navigate. I don't have enough people or resources to figure out financial wellness. And I think if you're an HR leader in this audience that is asking that question, know that you are not alone. And so we entered this space because we recognize that the emergence of financial wellness benefits for employers offered to their employees were really kind of the basics. It was budgeting, it was general savings, it was financial wellness education. And while all those things are important, I sometimes ask myself, is it really the role of the employer to provide financial wellness best practices to their employees?
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Is that their job? And I said, is there actually a solution that is tied to what employers really need, which is recruiting talent, educated talent, usually degreed talent that can help them with their biggest pain point that puts real dollars in the employee's pockets right away boosting their take home, helping them stand out with a benefit package that distinguishes itself in the market so you can attract that talent. And then something that provides long-term sustained savings in real terms, not hypothetical but active savings in the employee's pockets. And then as a founder who struggled with student debt, I was a bit predisposed to seeing that this could be the thing that employers really could benefit from. I think there's been a lot of misinformation about the student loan space over the last decade as part of the financial wellness puzzle because presidential administrations keep changing the policies and student loans were paused for four and a half years.
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So if you weren't hearing it about it as an employee concern, there's a good reason it wasn't actually a concern for four and a half years now, student loan payments have just resumed for the first time in again, nearly five years, and it is a major top two pain point for your employees financial concerns. And so summer took that problem and has built a solution for everyone under the sun who has student loans or is on the college cost planning journey. So that's a 40 year life cycle. And what I mean by that is a parent you could imagine with a newborn all the way through the average age of graduation of 22 years is trying to figure out at various stages of that lifeline, how much is college going to cost me an 18 years or 10 years or five years? How do I actually enroll my children in college when they're of college age and then actually make sure year over year in college that that cost is being covered, that tuition cost, the average student loan repayment timeline is 18 years.
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So you add that to the 22 year journey. Once they graduate that individual, that child is now going into the real world and you're hoping to send them off into their journey. But the reality is is they now have a $500 a month student loan bill that hits them right after they graduate, like a slap in the face. The challenge is that that's actually really difficult and a lot of young people have been staying home with parents for longer because they can't afford rent and groceries and everything else and that student loan payment. And so as people leave college, we wanted to be able to help them find more affordable repayment options to reduce those monthly payments. And there was over 150 government, federal and state as well as private sector loan assistance solutions. And the challenges most people don't know about them. So we are solving this 40 year journey helping with as an employer, you bring us in, we have what's called Summer Save.
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This is our core offering, and whether you employees have student debt already as young or sometimes we see employees as old as 50 60, we've seen 70 year olds with student debt is the fastest growing debt load for people over the age of 50, or you're a parent navigating this for a loved one. We have a solution that can make sure that you are set up for success, finding the savings options that are going to ensure the best possible outcome for that individual. In addition, Maggie also has signed up for her employees Summer Boost, which is supplemental to our core offering where employees can provide direct contributions to student loans, further enhancing the savings benefits offered by the free government money that we're unlocking for those employees. And then in addition to that, tuition assistance, which is ongoing continuing education, not to get overly technical, but they have the same tax benefit under the IRS tax code.
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Some people note as section one twenty seven, some people call it the fifty two fifty rule, but that's how much can be contributed to an employee without federal taxes being withheld. And so being able to manage that under one roof is something that summer provides to Maggie as well. We have other solutions related to student loan retirement matching, which is a whole new category of benefit that just was created last year under the Secure 2.0 Act, but we don't have to go into too much detail on that now and that is something that we do also provide in partnership with great institutions like a DP.
Deanna Cuadra (
And then this next question goes to the both of you. Why do student loans, which arguably one could say is a personal issue for employees? Why is this something that has to be addressed at the employer level?
Margaret Ruvoldt (
Yeah, I mean, I'll tell you why I felt compelled to address it. As Will mentioned, over the past several years, the idea of financial wellness has become more and more of a conversation with employees in addition to physical wellness and mental wellness. And as an HR professional, we used to think about financial wellness specifically as four one K. Are we providing a retirement solution for people? But the financial wellness is much more complex than that. And what I was seeing happen for us in particular, but I see this in other businesses that I've been in, is the burden of student loans. Not only is that a financial wellness issue, but it's a stressor that's impacting people every day. They're worried about making that payment along with everything else they need to do and the dreams they have for their lives. People are delaying buying homes as an example.
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So the reason I think it's an imperative for employers, first of all, I don't think it's going to be addressed in the public sector. As Will mentioned, this has sort of politically kind of gone back and forth. I didn't think any new administration or in a future administration was going to address it in a meaningful way for what I saw with my employees right away. But what we do is we work with children every day, children with autism, children with a variety of special needs. And when I have an employee in front of that child every day, I want their 100% focus to be with that child. And if they're worried about something else, including their financial wellness and particularly related to student loans, that's occupying some amount of their brain cycles all day long for us too. We wanted to be able to attract really great talent in a very competitive market when it came to the master's level employees that we have, clinicians that we have here and special educators.
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And so as an employer you really look around and say, what is part of my value proposition when it comes to the benefit space? This was a way I think for us to really say, Hey, we see you. We see the effort and the amount of money that you have put in to gaining this education that you've needed to do this work and we want to help you with that. So I think we're stepping into that because we believe it benefits our employees. Ultimately, I believe it benefits our clients because the employees are much more engaged and less worried about other things that are going on.
Will Sealy (
Yeah, I think Maggie hit the nail on the head right there. I think the only thing I'd add to that is again, the point I made earlier, if you're looking to provide the top talent to your workforce, that is a steady flow of individuals coming in know that they're likely going to have student debt. You now have over 70% of graduates leaving campus with student debt. College costs are going up. We're hearing increasingly of employees taking money out of their 401k to cover the cost of college for their children. It's eating into their retirement. We know that this is a cost that unfortunately is as high as $200,000 for the average family's child, and that cost has just been going up. This isn't the norm, but Vanderbilt now costs a hundred thousand dollars a year. That's a $400,000 education for a four year college degree.
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Again, it's not necessarily the school for everyone, but that's where we're heading is you could see a world where half a million dollars per child is the cost of college in the next 15, 10, 15 years. And if you're a millennial or a Gen X employee right now and you're on that life journey, that is a very stressful thing, especially if you also are still repaying your own student loans. And so this is an issue that really attacks at the heart of individuals financial stability. And what we're seeing is employees are increasingly expecting employers to do something in this space. Polls are showing and surveys are showing employees over 80% say they would benefit from student loan or college cost assistance, and this is something that can directly impact their financial lives, but also their career decisions. And so where Maggie has been smart is she's taking this really precipitous challenging problem for the employee and turning it on its head into a way to say, I'm listening, I'm acting and I'm helping. And she's getting the credit for that among her employees, which over time we've seen results in more employee loyalty, loyalty, more productivity and more efficacy over time.
Margaret Ruvoldt (
I'd love to share one very specific story about that sort of moment that I've had. So we've talked a lot about the numbers, but it really comes down to people when at this part of the conversation, that's what we're talking about, right? The impact this has on people. And so I spend a certain amount of time every month out in our centers meeting with employees, hearing what's on their minds, and I often ask, Hey, has anybody tried the summer benefit? I ask about any number of things. And I had an employee come up to me and said, by the way, I did. And she told me this incredible story where she had refinanced her loans before and that was somewhat helpful, but that by going through the process with summer, she had been able to reduce her monthly loan payment by I think it was something like $400.
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And she said to me, I'm so grateful that you provided this, that Lauren provided this. I'm going to be able to go on vacation with my spouse for the first time. And I thought, wow. And the way her face was kind of lit up that she was going to be able to go do this thing, and I thought, well, she hasn't been able to take a vacation. And as Will mentioned, we got the credit. It wasn't that summer did this. It was that learn provided this. So when I think about employee employees feeling seen, knowing that you're hearing what their challenges are, that is somebody who really is going to have a life-changing experience because she's going to be able to save this money every month. So it's the power of what happens at the individual level, even though we're talking kind of in broad strokes,
Deanna Cuadra (
I want to next then discuss this benefit and of course this issue in the larger political context we're in. I know both of you kind of briefly touched on this, but under the current administration there is no shortage of uncertainty. And I have to ask, what advice do you have for employers who aren't looking for ways to boost financial wellness in their workforce, but against today's gets a backdrop of today's political landscape?
Will Sealy (
I think it's a great question. So I think first, just to set a high level, it's important to note there've been more changes in student loan policy in the last three years than in the last 30. And what that means is if you're an employer, it's hard enough managing all the different changes for compliance, everything you need to manage daily for your employees, employee complaints, the hiring process, everything going on. And so how can you ever keep track? And so we at summer recognize that if you're an HR leader, it's impossible to keep track and then do this in every other area of employee benefits as well. So what we offer to folks like Maggie is the expertise as former student loan government officials. So I was early on at the consumer financial protection bureaus, the student loan policy team, understanding exactly where these policies were impacting people and where they could use help being improved.
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In addition, we've recently brought on the former deputy assistant secretary from the Department of Education who leads our customer team, and he knows this area like the back of his hand, that expertise that we bring, Maggie has to translate into her daily employee's experiences and also to make sure that she knows we're doing everything by the book executing and delivering value every day, day in and day out. What that looks like is the policies that exist right now are given that student loan payments have resumed. Unfortunately, we're in a state where only about 40% of all student loan borrowers are making their payments over the last three months. And what this means is as many as 9 million of the 45 million people in this country who have student debt have been delinquent on their loans and delinquency means you've not been able to make a loan payment for over three months.
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If that continues for another six months, we will start to see a wave of defaults. And what that means is you can have wages garnished. So if you're an HR leader, know that there is a tsunami coming and it's coming for 45 million people who have student loan debt and are really struggling to figure out how am I going to pay these bills at a time where Biden loan cancellation was blocked? The current administration is not looking to do any mass cancellation. So if you owe your loans your hearing, you now have to pay them back in full. And what we're able to do is enroll those individuals that are stressed about making their payment into federal income driven repayment plans. They can lower your monthly payments by hundreds of dollars. And what it does, it allows you to stay in good standing on your loans and avoid what can be up to a 200 point credit score hit, which as Maggie noted, that will impact your ability to apply for a mortgage, apply for a car loan.
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Imagine you're an employer, your employees need to drive to work. They need ideally to be able to have a path towards home ownership. And ideally, they're buying homes where your office is located in the cities that they reside so that they can actually stay longer and be working for you for longer. And if they can't do that because they can't actually qualify for a mortgage or for a car loan because of a 200 point credit score hit, which by the way, every major publication has just reported that borrowers are experiencing up to 200 point credit score hits because of delinquency, that's going to be a major fallout. It's going to be a huge burden for your employees. And they might start looking for jobs that are helping them navigate this with student loan contributions directly and or help with these government repayment assistance programs or just frankly a higher paying job if they really need to make those bills.
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So this is a way to get ahead of that. This is a way to ensure that you can give your employees the information and knowledge about how to avoid delinquency and default on their loans and the programs that are set up to help them. And then at summer, we're doing direct enrollment into those programs end to end. Think of us a lot like TurboTax for student loans. And so we're identifying their unique situation, their family size, their A GI, and then we're filling out these complicated 15, 20 page government forms all digitally in under five minutes. We audit every form to make sure it's completely accurate, we submit it on the employee's behalf and then follow up with the employer about the enrollment. And so that's one of the major values that we're providing in this uncertain time. And if done correctly, you will make sure that not a single one of your employees defaults on a student loan, and that is a huge benefit that you can offer to your workforce.
Margaret Ruvoldt (
So I would say I'm going to take a broader view of how do you help your employees in this uncertain time with their financial wellness. The first thing I tell everybody is know your employee base. Not every employee base looks like every other employee base because we're in the healthcare space and in the education space, we have a high number of people who need master's degrees and continuing education to do the work that they do. Think about. You may have an employee base that is made up of larger people with families. So as Will mentioned, they're thinking about they're paying off their own student loans and they're thinking about their children. So thinking about what are all the pain points and what are the very practical ways in which you can create certainty in an uncertain environment. As I mentioned before, sort of 4 0 1 Ks feel like table stakes, but when it comes to financial wellness, what I was thinking about was you can only spend a dollar one time, and that's true of my benefits dollars and every other investment that I make.
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So where am I going to spend those dollars when it comes to helping my employees? And I could offer lots of financial literacy classes and things like that, but they may not get to the very practical pain point that people are experiencing. And for us and for many companies, that practical pain point is student loans. And now that it is everywhere in the news and everybody's a little uncertain about what to do, how to take the next steps, I think this is why we really wanted to focus. I wanted to focus on student loans. And as will just mentioned, a lot of people don't go down the path because it's so daunting. The forms are confusing, they don't know where to get started, they don't know where the access is. So the other piece of advice that I give people generally is you can't be smart about everything.
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So surround yourself with people who are smart about the things that are important to you. So when it came to solving the problems that I had right in front of me, I was looking for, as I mentioned at the top of our conversation, I was looking for the right team. So that's the other piece of advice I give. We'll sit this several times. I can't be good at everything. I can't have my hands on everything. As an HR leader, what I need to be able to do is get really good at bringing in people that help solve those problems for our employees and help them feel settled in the places in their lives where they can. So those are my two big pieces of advice.
Will Sealy (
I think that was well said, Maggie.
Deanna Cuadra (
Alright, well I want to give us plenty of time for questions We have. They're stacking up back here. So I'm going to go ahead and pull in our first question, just one moment. We have an audience member who says, my child is enrolled in the SAVE program. Do you have any updates on how this program is affected when payments need to begin, et cetera? Does my child need to do anything at this point?
Will Sealy (
So the administration has moved everyone who had originally signed up for one of the five, then five income driven repayment plans that was introduced under the Biden administration looking into what's called administrative forbearance where they do not owe money on their student loans. In the immediacy, it's not being charged and we're still waiting for guidance on exactly what those individuals should be doing. It's about eight to 9 million people who are in this bucket. So know that your child is not alone, it's a large number of people, but inevitably it's going to look like this individual, this child of yours should get information soon from the Department of Education on whether they should enroll in another income driven repayment plan such as the pay as you earn program or income contingent repayment. But this is something that summer really specializes in is helping each individual's unique situation navigate which plan is right for them at which time. But I think it's likely just general advice. The best thing is probably to wait. That said, if that individual, your son or daughter is looking to qualify for public service loan forgiveness, there's other actions that they might benefit from taking. So if you have more specific follow-up questions like that, we'd be happy to help you on a one-off basis.
Deanna Cuadra (
This next question addresses Maggie, they want to know how does this program, how has this program helped you retain talent and attract new talent?
Margaret Ruvoldt (
Great question. So from a retention standpoint, I would say we haven't measured it very specifically, but what we are hearing anecdotally is people are so grateful that we are seeing them that we're addressing this problem and that we're rolling out. They've been so pleased with what they've experienced with summer and the fact that we are continuing to roll out additional benefits with 'em that I always equate that with retention, people feel it creates an employee loyalty. So I think that's what we're seeing as far as what the retention is now from the attraction standpoint, when our talent acquisition team is out there talking to people, this is one of the things that they share with them. And we are finding that it is a differentiator right now when we talk about, Hey, you're probably thinking about going lots of different places, there are options for these individuals. What I'd ask you is, are they going to help you reduce your student loans, not just pay them back but actually reduce them and they tell them a little bit about the summer benefit and we get a very good reaction from that. So I think when it comes to attracting talent, this really right now is a differentiator for us.
Will Sealy (
And I can just supplement with Maggie's particular insights with more general information around retention. So we have a 20% retention average across several case studies that we've run over several years. And what we see is that when comparing employees who are utilizing summer for their student loans to employees who are not the employees who are utilizing summer are sticking around 20% improvement to the retention of those employees. Obviously we recognize that it's almost impossible to say that's causal, but at the end of the day, what we recognize is those who are utilizing summer and receiving savings on their loans versus say employees who have student loans but haven't utilized summer services are more likely to leave. The latter category is more likely. No.
Deanna Cuadra (
And our next question, what is the potential cost of the employer for the summer student debt assistance program?
Will Sealy (
Yeah, we charge a per employee per month fee for summer save our core offering. And there's an additional fee to offer Summer Boost on top, and it is a tiered pricing based on an employer's size. So we have a low minimum fee for smaller employers, but generally speaking, you could think of the cost of summer on average being around one to $2 per employee per month depending on the size of the employer.
Deanna Cuadra (
This next question asks, are there any disadvantages to offering student loan repayment as a benefit?
Will Sealy (
That's a good question. I will say, I'll answer this and I'd love to hear Maggie's perspective. One common question I get from HR leaders is this sounds like a point solution and is it fair if I'm paying student loans for a smaller number of my employees? And I think that that might be in the line of the question. So what I'll say as what I usually say in response to that is, I totally hear you. Are you also offering tuition assistance? More often than not about 40% of employers are, and I hear the employer say yes oftentimes. And then I say, well look, this is something that can be done in composition with or in attachment to continuing education. So if you're worried that employees would say, well, why are you paying for student loans? I already paid by student loans or I didn't have student loans, I would say the response back is, look, we provide financial support for continuing education.
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If you want to continue to upskill or take courses that can help you in the furthering of your education, we will provide that support to you. And if you have a student loan you're currently burdened by education that you took on to help you with your current job, we will support you as well. What I tend to find is most HR leaders find that that is a sufficient answer for that concern. For those that don't have tuition assistance, it's even better if you can roll these out in tandem and say, we will provide up to $2,000 a year for your student loans or continuing education, whichever one you need or benefit with. And you can even do both if you want to mix the match. And that is something that summer can also help provide. So I know those concerns are out there. It's something that we do see and this is how we've addressed them.
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And I'd say for all of the clients that we support and we support hundreds of clients in this regard, the success outcomes and the responses to those framings have been very positive from employees. One last thing to leave you with is another common concern that I hear from employers is, well, we polled our employee population and we asked, do you have a student loan? And only 33% of our employees said yes. And I said, I usually say that's a totally fair question to ask, but potentially a better one to ask is do you have a student loan in the household? Because if you ask the question that way, what you'll realize is a lot of your employees are putting money towards their spouse's student loan or their children's student loan. And that's not to say that if you're doing a student loan contribution program, sometimes known as a student loan pay down program, that you should pay for those individuals student loans.
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But with our core offering summer save, we include the family part of the benefit. So what that means is that TurboTax like core product, we're finding over 150 savings programs, as I mentioned earlier, for the spouse, for the children, and we will support them into those savings programs. And what that then means is that employee, when they think about their income and their take home from you, the employer, they know that part of that is going every month to their son's $300 student loan payment and maybe even their wife's $500 nursing loan or something that they've taken on. And if we can unlock three or $400 of savings a month for their loved ones, that employee benefits superbly benefits too. And so we recognize that when we've done a study on this, on average about 35% of employees have student debt, but closer to 50% of employees have student debt in the household.
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And if you include parents with a child under the age of 22 that is either heading to college or in college, that number jumps to 80, 85%. And so you really are reaching a huge majority of your employees in that regard with our core offering. And then if you choose to add the student loan contributions to just your employees on top, that's also a great benefit. And we help employers like Maggie navigate how to frame that to the employee to say, look, if you have debt in the household, summer can help see if you qualify for savings. But we only are doing student loan contributions directly to employees given that's how the program is structured. And I think most employees do get that.
Margaret Ruvoldt (
I mean, I would say that as far as disadvantage, it's the same for every benefit you think about offering. The only disadvantage of any benefit you offer is whether or not it's meeting employees needs and whether or not they value it. So just again, know your employee base really well. And to Will's point, make sure we're asking the right questions when you are finding out what they value. I've definitely offered benefits in the past where I thought this is exactly what they were asking for. And then seeing that the utilization is low, that they actually end up not valuing it, that's a disadvantage of any programs. So just know them well. And in this environment, I feel like student loans, I actually had, when I explained to our executive team what I was exploring, the specific words that one of our other executives said was, this feels like a no-brainer when it comes to what one of our pain points are.
Will Sealy (
One thing that Maggie has pointed out to me in the past, and I think it's so critical for any benefit provider to get right, is you can't just assume that rolling out a benefit is going to get utilization. And I think most HR leaders who've been in this space for years know that intently. It's like just because you roll it out doesn't mean it gets utilized. And so inevitably, because so many benefits in the past have been underutilized, including tuition assistance, which just universally has low adoption, inevitably it is something that you might presume, well, this probably will get low adoption too. Just another thing that sounds great, but I'll put it in place and then we'll see low adoption, we see 17% adoption on average, which is about six times the average voluntary benefit. And I think there's two reasons for this. I'd love to take all the credit for it, but I can't.
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I think one is just we're solving a real pain point. You can opportunistically offer continuing education to an employee, and I think it's fantastic to do it. It's an awesome program. But you imagine your employees are trying to manage the bills and the groceries and what are they, the childcare support and everything else outside of your job. It's very hard to add a course into your life even if you want to. But if you've got a, and for some of Maggie's employees, a $1,700 student loan payment, and that's real. We see student loan payments as high as $2,003,000. We've seen a month that is $36,000 a year going out of your wallet. Yeah, you're going to stop and engage on something that says that this can help you to lower that payment. And so that's a huge reason why we see, I think, higher engagement than other voluntary benefits. The second is because we really do work with our clients to promote this and make sure that there's strong marketing of this benefit so that Maggie is getting the credit. And that's what I think we really want to see is that our employer partners, and we do call them partners, we think of it as such that they are really seeing the results of the program that they want to see to justify its creation.
Deanna Cuadra (
Alright, I think we have time for one more question, and this is another technical one. How has the Secure Act 2.0 changed student loan benefits? Isn't there something about 401k matching?
Will Sealy (
Yes, that's a great question. Inevitably, as Maggie noted earlier, student debt has this domino effect in an individual's life. Imagine a 22-year-old entering their first job with a five, $600 a month student loan payment, and the employer then says, we have a 401k matching program. We actually see a lot of 20 and 30 year olds earlier in their careers are foregoing participating in their 401k match because of the high costs of really everything right now as we can all feel the pain of higher costs, but also their student loan payments. And there are 5 million people who are entering student loan repayment for the very first time. Right now they're in their twenties and they have to make a decision, do I take part in my employer's match on my 401k or 4 0 3 B if you're a nonprofit? Or do I just try to pay off my debt?
(
I want get rid of this thing, I want to just pay it off. And 99% of borrowers just want to pay off their debt. So the Secure 2.0 Act, which had over 90 provisions to reen enhance the 401k program. And 4 0 3 B retirement programs included a provision that allows for an employer to acknowledge the serious problem and be able to allow them to say, if my employees have a student loan, I can count that as if it was a participation to the 401k plan and make a commensurate match to their 401k. And so the employee pays the loan while the employer contributes to the retirement plan. And we're currently supporting hundreds of employers right now with this initiative, and we're seeing that the employers are finding it as a way to just further enhance their retirement plan and really make it more equitable for people who have major pain points earlier in their career.
(
And the stat that I find so compelling just to wrap this up, is if you forgo your 401k match in your twenties and your thirties, that's because of a $50,000 student loan that you're paying off. If you had put that $50,000 into a retirement plan in your twenties, that's worth over a million dollars by the time you retire at over the age of 65. And that's the power of compound growth that we all know is what makes retirement plans so important to get right. But if it's not being utilized by those who arguably need it most, then what's the point? And so this is really an awesome initiative to level the playing field for those that are stressed financially because they tried to educate themselves to be better for you in your job and help you in your workforce and make sure that you're aligning all the incentives in the right direction to get the results that you know want to see.
Deanna Cuadra (
Alright, I think that's all we have time for today. I'm sorry if we didn't get to your question, but I appreciate everybody who put some in the chat. These were great questions. This was a lovely conversation, very necessary one, especially right now. I'm going to go ahead and close out our session three. I want to thank everybody for joining us. I'm going to toss it over to Eben's editor in chief for closing remarks. But yeah, just want to thank everybody for joining us.
Will Sealy (
Thank you so much. Thank you to EBN.
Alyssa Place (
Thank
Deanna Cuadra (
You.
Alyssa Place (
All right, that concludes our sessions this afternoon. Thank you so much for attending. Hopefully you can all walk away with some actionable solutions and a more positive outlook on how to navigate these challenges and support employees with their financial wellbeing at any stage. And I'd like to thank our supporting sponsors once again, Ramsay Solutions, tap check, and ZA Zoom. We're grateful for your partnership in making today possible. One last reminder about PDCs. This event was good for up to 2.25 S-H-R-M-P-D-C credits. The form is now live on the event website or on the main page of the attendee hub. Certificates will be emailed within two weeks post-event by Horizon, and we'll also link to the form in a follow-up email that will go out later today with the on-demand viewing. For information on all the topics we've discussed today, please visit employee benefit news@benefitnews.com. Our incredible team of reporters is on top of all these issues impacting work and benefits each and every day, and we're touching base with top leaders in the industry, many of whom you listened to this afternoon. As such, our annual excellence and benefits award nominations were just opened yesterday. Visit benefit news.com to find the nomination form you have until Friday, May 30th to nominate an outstanding benefit manager. So please do so. Thank you again so much for attending. I'm Alyssa Place and we will see you next time.