What You Need to Know
- Some 40 million Americans with federal student loans face the return of required monthly payments and interest accrual starting Jan. 31.
- The Secure Act 2.0 would allow employers to contribute to workers' retirement accounts in the amount they are paying toward their student loans.
- Fidelity suggested that borrowers review their budget and make sure their loan service provider has current personal and financial information.
Some 40 million Americans with federal student loans face the return of required monthly payments and interest accrual starting Jan. 31.
An analysis of loans from Fidelity Investments’ Student Debt Tool shows Gen Z joining the ranks of workers increasingly burdened by debt, while baby boomers hold more than twice as much debt as these younger borrowers.
Fidelity announced Wednesday that it will expand eligibility and increase by 50% the lifetime maximum loan payment offered to its own associates who are paying down student debt, effective in December.
What Your Peers Are Reading
“We expect more than 5,000 Fidelity associates may benefit from this competitive program, which includes a waived waiting period to become eligible so new hires can enroll on day one, and a $15,000 lifetime maximum payment,” Tom Vogel, head of financial benefits for Fidelity Investments, said in a statement.
Besides relieving the financial and emotional pressure on those with student debt, analysis of new data from early adopters of the Student Debt Benefits Program for Fidelity’s plan sponsor clients shows a 78% decrease in turnover among employees with student loans, demonstrating the power of student loan assistance to attract and retain top talent.
“It’s clear that student loan borrowers are juggling multiple priorities above and beyond paying down their debt,” Jesse Moore, head of Fidelity Investments’ student debt program for workplace investing, said in the statement.
The National Conversation
As student debt gains attention at the national level, proposed legislation such as the Secure Act 2.0 could give additional support to student debt borrowers, according to Fidelity.
This legislation would allow employers to contribute to workers’ retirement accounts in the amount they are paying toward their student loans.