To be eligible for a one-time federal initiative that could wipe out their debt from student loans, 3.5 million workers with privately-held Federal Family Education Loans (FFEL), Perkins Loans, or Health Education Assistance Loans (HEAL) should apply to consolidate by June 30, 2024.
3.5 million workers with privately-held Federal Family Education Loans (FFEL), Perkins Loans, or Health Education Assistance Loans (HEAL) should apply to consolidate their loans by June 30, 2024, to be eligible for a one-time initiative that could wipe out their student loan debt.
Employees you care about should be asking:
How do I know if I have FFEL Loans, Perkins Loans, or Health Education Assistance Loans (HEAL) that are privately held?
Given the connections among debt from student loans, employee financial stress, mental health, employee wellness and productivity, you can help them and your organization by making sure they’re aware of the June 30 deadline to apply.
Our TrustPlus personal financial coaches are making sure all of our clients are up to speed.
“Everyone who thinks there is even a possibility they may be eligible should take the time to find out,” Jane Fox, the New York chapter chair of the Legal Aid Society’s union, tells CNBC. “It is a quick phone call or a check of a website that could mean full cancellation of your student debt.”
How workers can check if they’re eligible to consolidate student loans
Here are some recommended steps to share with workers to see if they’re eligible to consolidate their student loans:
- Log in to your account on studentaid.gov.
- On your Dashboard click on “View Details.”
- Scroll down to “Loan Breakdown.”
- You only need to worry about loans with a balance and can ignore loans that show a $0 balance.
- If the name of the loan servicer starts with “Dept. of Ed” or “Default Management Collection System,” then that loan is held (owned) by the federal government and does not need to be consolidated.
- If the name of the loan servicer starts with either a company’s name or a school’s name, the loan is privately held and needs to be consolidated by June 30th in order for you to get credit toward debt relief.
- To apply for loan consolidation, go to www.studentaid.gov/loan-consolidation/, as soon as possible—but no later than June 30, 2024—to get the full benefits of the adjustment. The process typically takes less than 15 minutes.
- Note that you should only consolidate these loans into the federal Direct Loan program. Refinancing these loans with a private company will make them ineligible for the account adjustment.
Demand grows for financial wellness benefits, student loan support
Employee demand for financial wellness benefits, specifically student-loan benefits, has been growing and can give employers a leg up in recruitment, says Tony Guadagni, a director of human resources at HR advisory Gartner Inc., per Bloomberg’s Ella Ceron.
Good to know, especially as employers now have added resources at your disposal to support your workers with student debt in becoming debt free, asap.
You can now consider student loan payments as qualifying contributions toward retirement plan matching programs, thanks to the Secure 2.0 Act.
The historic legislation included dozens of provisions designed to help workers save for retirement and to help employers make it easier for workers to save.
Secure 2.0 student loan match: good for workers, employers
Enter the Secure 2.0 student loan match:
“The student debt retirement provision is particularly exciting as it directly addresses retirement savings — which is one of the top areas we see so many borrowers are forced to cut back on due to their student debt,” Jesse Moore, head of student debt at Fidelity Investments, tells Yahoo Finance.
Under the Secure 2.0 student loan match, your workers don’t have to choose between paying down student debt and saving for retirement.
Sounds too good to be true. Employers are treading cautiously.
Take for example Fidelity Investments who rolled out a program to handle the benefit January 1 to its roughly 30,000 corporate clients.
Dow Inc., News Corp., Liberty Mutual Insurance Co., and Verizon are among 100 Fidelity clients out of 30,000 to take advantage of the Secure 2.0 student loan match, so far.
A survey by the Plan Sponsor Council of America finds 64% of companies don’t plan to roll out an expanded 401(k) match, citing costs as a major reason.
That’s understandable. Not every employer is in a position to implement today.
Sharing timely info about student loans brings benefits
For you, merely sharing timely student loan information and resources demonstrates to your workers that you empathize with their challenges and care about their physical and mental health, which brings its own benefits.
A Gallup survey finds employees who strongly agree that their employer cares about their overall wellbeing are 69% less likely to actively search for a new job, 71% less likely to report experiencing a lot of burnout, and three times more likely to be engaged at work.
So, show your workers you care by making sure they know: June 30 is the deadline to apply to consolidate their student loans.
Schedule a time to speak with TrustPlus about student loans and capturing the benefits of a financially healthy workforce for your organization.
