SoFi Blog

New Survey Data from Embold Research, Sponsored by SoFi, Shows Federal Student Loan Borrower Confusion and Misconceptions Around Resumed Payments.

We’re launching a new feature that rewards our most loyal members even more–a 10% boost on cash back rewards earned for credit card members with direct deposit through SoFi Checking & Savings

The SoFi Credit Card will now offer a true, unlimited 2% cash back rewards on all purchases just in time for holiday spending, to ensure you get the most for your hard-earned money.

Many organizations are gearing up to help their employees prepare for student loan repayment. On October 1, 2023, some 40 million borrowers will be facing the return of monthly student loan bills after a three-year pause. Knowing the importance of helping employees have a smooth transition back into repayment and maintain good financial posture, many employers want to make sure their workforces are ready.

Under the Coronavirus Aid, Relief, and Economic Security (CARES) Act, payments for federal student loans owned by the Department of Education were suspended and interest rates for those loans were set to 0%. Although the pause was originally set to expire in September, 2021, the Biden administration extended the deadline multiple times. With the recent signing of the debt ceiling bill, however, the President no longer has the legal authority to extend the student loan pause.

With broad one-time forgiveness blocked by the Supreme Court, many of your employees will soon be facing a significant financial challenge — resuming college loan payments after a three year hiatus or, for more recent graduates, starting them for the first time.

Fortunately, a provision that was also introduced in the CARES Act (and that has also been extended via more recent legislation) sets employers up to ease this transition by letting them contribute $5,250 annually per employee on a tax-exempt basis toward tuition reimbursement or student loan payments through 2025. To maximize the value of this benefit, employees also benefit from zero tax liability on contributions made by their employer toward educational assistance programs (up to $5,250) under Section 127 of the Internal Revenue Code.

About 8% of large companies offered student loan repayment benefits before the pandemic. During the pandemic, however, interest in this type of benefit generally ebbed, due to the repayment pause and a shift towards programs offering more immediate help, like emergency savings and hardship payments.

Now, tax changes combined with the upcoming return to repayment has resulted in renewed interest in student debt benefits. More generally, helping with student debt is a vital part of the trend toward offering financial wellness programs that reach beyond retirement savings to build financial security in all areas of an employee’s life.

Here’s a closer look at how a handful of large employers are situated to help their employees face the restart of student loan payments.

Abbott

The healthcare company Abbott has paved the way for a creative, effective way to help employees who are saddled with college debt continue their retirement savings. Like many companies, Abbott noticed that employees struggling to pay back loans can’t afford to contribute to 401(k) and other retirement savings. So, Abbott started its Freedom 2 Save program, which allows employees with student loans to divert the 2% minimum contribution they would need to contribute to their 401(k)s to receive Abbott’s 5% match to paying off student loans.

This benefit led to the so-called Abbott rule. The IRS issued the company a private letter ruling allowing the unorthodox 401(k) match, which led other companies to adopt or consider the practice. Many other employers may rush to adopt this benefit, however, thanks to the SECURE 2.0 Act (passed in 2022). The Act permits employers to make matching contributions to retirement plans based on employees’ student loan payments and simplifies the process.

Aetna

The health insurance giant began supporting employees with student debt back in 2016, making it an early adopter. Aetna matches student loan payments up to $2,000 with a lifetime maximum of $10,000. Aetna differs from many other employers offering this benefit in that the company includes part-time employees in the program, providing them with half the amount of payment relief that it gives to full-time employees.

Google

The tech heavyweight joined the student loan repayment benefit bandwagon in the wake of the pandemic. Starting in 2021, the company began matching up to $2,500 a year per full-time employee, adding to the company’s existing tuition reimbursement program. To be eligible, you must be a full-time Google employee. To get the full $2,500, your annual student loan payments total at least $2,500.

New York Life

Another company with one of the more established student loan payment benefits, New York Life pays up to $10,200 over five years for an eligible employee’s college debt. Importantly, the program also strongly encourages employees to use the student loan advice and online planning tools the company offers, including financial planning counseling, its student loan calculator, and information on how to qualify for a mortgage while carrying student debt and other education efforts.

NVIDIA

Visual computing company NVIDIA may be one of the most generous employers offering student loan payment assistance, although only recent grads are eligible. Full- and part-time employees who have graduated within the past three years can receive up to $350 a month for a maximum total of $4,200 each year, with a lifetime maximum of $30,000. The company’s contributions are made directly to the employee’s loan servicer. NVIDIA also offers a robust suite of student loan coaching and tools at no cost to employees.

PwC

Accounting and professional services firm PwC is also one of the first companies to offer student loan repayment. If you’re an associate or senior associate with the company, PwC will pay up to $1,200 per year towards your student loans. According to the company, their student loan paydown benefit can reduce student loan principal and interest obligations by as much as $10,000, and shorten loan payoff by up to three years.

The Takeaway

Looking for ways to help your employees navigate the student loan landscape? SoFi at Work’s student loan education, refinancing, and repayment benefit platforms can offer the tools you need to support your employees and promote their overall financial wellness.

Photo credit: iStock/Ivan-balvan

Products available from SoFi on the Dashboard may vary depending on your employer preferences.

SoFi Relay offers users the ability to connect both SoFi accounts and external accounts using Plaid, Inc’s service. When you use the service to connect an account, you authorize SoFi to obtain account information from any external accounts as set forth in SoFi’s Terms of Use. SoFi assumes no responsibility for the timeliness, accuracy, deletion, non-delivery or failure to store any user data, loss of user data, communications, or personalization settings. You shall confirm the accuracy of Plaid data through sources independent of SoFi. The credit score provided to you is a VantageScore® based on TransUnion® (the “Processing Agent”) data.

Advisory tools and services are offered through SoFi Wealth LLC, an SEC-registered investment adviser. 234 1st Street San Francisco, CA 94105.

SoFi Student Loan Refinance Loans, Personal Loans, Private Student Loans, and Mortgage Loans are originated through SoFi Bank, N.A., NMLS #696891 (Member FDIC), (www.nmlsconsumeraccess.org ). The Student Debt Navigator Tool and 529 Savings and Selection Tool are provided by SoFi Wealth LLC, an SEC-registered investment adviser. For additional product-specific legal and licensing information, see SoFi.com/legal. 2750 E. Cottonwood Parkway #300 Cottonwood Heights, UT 84121. ©2023 Social Finance, Inc. All rights reserved. Information as of November 2023 and is subject to change.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

SoFi members, get ready to jet set – SoFi Travel¹ is here to make travel planning easier and more affordable than ever before, from booking flights, to hotels to travel experiences, and more. SoFi Travel is powered by Expedia, providing members an easy search and booking experience, all within the SoFi app or website. SoFi Travel will be rolling out to all members over the coming weeks.

SoFi has seen incredible demand from members in the travel sector, with SoFi Credit Card² spending on travel up 54% in the first three months of 2023 compared to the same time period in 2022³. SoFi recognizes this is an area of major interest to members, and this new offering is here to meet that demand.

SoFi Travel expands members’ benefits by offering SoFi Member Prices on select hotel bookings, made possible with Expedia’s competitive offerings. SoFi members will be able to save 10% or more at select hotels, as well as additional discounts on bookings. Members who use the SoFi Credit Card for their bookings will earn unlimited 3% cash back⁴ rewards on their purchases.

SoFi also recently conducted the first-ever SoFi Travel Habits Survey⁵, which showed 82% of members plan to travel this summer, and over 60% are willing to spend over 2 hours or more extra when booking travel to find the best deal. SoFi’s new travel portal will make it easier to make your travel plans this summer and beyond, saving SoFi members money and time when booking.

Booking with SoFi Travel
Just as members can easily manage everything from their credit card to investments in the one place, managing travel plans alongside all your financial products is now simpler with SoFi Travel.

SoFi members will be able to access the booking portal through the app or website, where they will be able to track travel details and adjust reservations and manage their travel budget throughout their whole trip.

SoFi Travel and SoFi Credit Card Rewards
SoFi Credit Card members will be able to earn an unlimited 3% cash back rewards on SoFi Travel bookings made using their credit cards. Once members receive their rewards points, they can redeem in a variety of ways, including:

•  Cash in a SoFi Checking and Savings account⁶

•  Pay down an eligible SoFi loan⁷

•  Money to invest via their SoFi Invest account⁸

With SoFi Travel and the SoFi Credit Card, SoFi is continuing to offer the best of benefits when using SoFi products together.

Preparing for Travel with SoFi
In addition to making travel booking simpler and more affordable, SoFi can make planning travel easier than ever by offering a variety of tools to help members save for vacation and track their travel expenses.

Checking and Savings Vaults
For SoFi Checking and Savings members, they can create Vaults, an extension of Savings accounts where members can save for specific goals, including travel plans. Members with direct deposit can earn 4.20% APY (Annual Percentage Yield)⁹, 10x¹⁰ the national average, on all savings balances, putting more money in their pockets for travel outings and souvenirs.

Not a SoFi Checking and Savings member yet? Sign up here.

Financial Insights
SoFi members can use SoFi Insights¹¹ to track spending before, during and after vacations, across all their bank accounts and credit cards. Before trips, members can keep an eye on all of their spending to budget ahead of a big vacation, but also easily find places to trim expenses, such as long-forgotten recurring subscriptions.

Post-vacation, members can tag expenses related to their trip and see a full breakdown of their trip’s costs, where they spent the most money, and how best to budget for their next vacation.

Travel Tips & Recommendations
With the launch of SoFi Travel, SoFi is also launching a new travel planning vertical within On the Money, a digital content hub helping members get their personal finances right with a one-stop-shop for news, trends, and tips.

In the Travel vertical, SoFi members and even non-members can access articles on financial tips for booking trips and best ways to save money while jet setting. See the new education resources here.

SoFi Travel Habits Survey
As part of the rollout of SoFi Travel, SoFi conducted the first-ever SoFi Travel Habits Survey looking at the travel plans (and travel budgets!) of over 1,400 SoFi members. When it comes to members and their travel plans, key findings include:

•  56% of SoFi members canceled their travel plans in the last year due to rising costs / inflation

•  66% make budgets for their trips, and 29% start budgeting /saving for a trip a whole year in advance

•  57% of members were inspired to book a trip based on a movie or TV show, with White Lotus serving as the ultimate inspiration

You can see more from the first-ever SoFi Travel Habits Survey here.

DISCLOSURES
1. Terms, and conditions apply: The SoFi Travel Portal is operated by Expedia. To learn more about Expedia, click https://www.expediagroup.com/home/default.aspx.

11. SoFi’s Insights tool offers users the ability to connect both SoFi accounts and external accounts using Plaid, Inc.’s service. The credit score provided to you is a VantageScore® based on TransUnion® (the “Processing Agent”) data.