TIAA is working with social impact technology startup Savi to make it easier for nonprofit institutions to offer a meaningful student debt relief solution to their employees.
The companies launched a student debt solution designed to help employees of nonprofit organizations reduce their monthly student loan payments immediately, and to qualify over time for relief from the balance of their federal student loans by enrolling in the federal Public Service Loan Forgiveness (PSLF) program.
TIAA and Savi conducted a pilot of the solution from July through March with seven nonprofit institutions—four in higher education and three in health care. Within that period, employees who signed up for the solution were on track to save an average of $1,700 a year in student debt payments. Some employees’ payments were cut in half. In addition, employees had an average projected forgiveness of more than $50,000 upon successful completion of 120 months in the PSLF program. The total projected forgiveness from the pilot exceeds $53 million to date.
TIAA notes that, historically, the PSLF program has presented challenges for some borrowers, as many have had difficulty understanding the rules and managing the paperwork. In fact, 98% of PSLF program applicants have been rejected for not meeting program requirements or due to missing or incomplete information on a form. More than half of borrowers miss annual deadlines that are key to receiving loan forgiveness.
Individuals can sign up for the solution by answering a few simple questions. From there, the Savi software calculates potential savings with an income-driven repayment plan and determines whether the person may qualify for a forgiveness program. The Savi algorithm takes into account an individual’s specific circumstances, including their family and tax situation, and suggests a solution that best fits their needs. The solution acts like a concierge, helping the individual to stay in compliance with the recurring paperwork requirements of the PSLF program and reducing errors. Savi’s customer success team is also available to answer questions and act as an advocate if needed.
Employees of nonprofit institutions and their family members are also able to get an initial analysis from the tool at no cost.
TIAA is offering Savi’s solution to client institutions as a turnkey service to help them significantly expand the financial wellness benefits available to their employees.
This solution offers a client-friendly deployment model that requires no information technology (IT) involvement by the institution and enables the client to control the communication channels and frequency. A communications toolkit is provided to enable institutions to communicate information in the way that works best for them and their employees.
“Managing debt is a key step toward achieving financial wellness and it is why we are offering this solution,” says Doug Chittenden, executive vice president and president of Institutional Relationships at TIAA. “There has never been a more important time to help keep our nonprofit participants on track toward student debt forgiveness. Health care workers on the front lines of this crisis and university faculty and staff focused on administering distance learning programs are under tremendous pressure already. Together with Savi, we’re proud to help enable our participants and other nonprofit employees to take advantage of the significant benefits of the federal PSLF program.”
Savi Co-Founder Aaron Smith said, “Even the most diligent student loan borrowers face challenges navigating the confusing maze of federal student loan repayment and forgiveness options. After seeing the incredible impact during our pilot with TIAA, we are excited to expand to the broader TIAA community of client institutions and their employees.”
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