Vanguard Partners With Candidly For Student Loan Repayment Program

An estimated 44 million Americans owe $1.75 trillion total in student debt, according to 2020 Federal Reserve figures.  

Vanguard has partnered with Candidly to offer retirement plan sponsors a student loan debt repayment program option for eligible employees.

The financial wellness service will be available to Vanguard recordkeeping clients as an opt-in feature. Vanguard expects to make the Candidly platform available in the second half of 2022. 

Workers with student loan debt often have difficulty reaching their financial goals. Financial planning and saving for retirement are complicated, and can be delayed because of student loan debt, says Amber Brestowski, principal and head of institutional investor advice and client experience at Vanguard. 

“We know that student debt is not only a significant stressor for employees, but it can impact their ability to save for longer-term goals like retirement,” she says. “With the federal moratorium on student loan debt reaching a close and new regulation on the horizon with [the] SECURE 2.0 [package of retirement bills], plan sponsors and recordkeepers are in a stronger position than ever to help their employees with their student loan debt.”

Student loan debt repayment benefits have become more prevalent, and some plan sponsors are focusing on these programs so that employees can reduce their student loan debt and focus on financial goals, including accumulating sufficient retirement savings.

The debt repayment option offered by Vanguard though Candidly is designed to provide personalized guidance for borrowers, parents who borrow on another’s behalf and loan co-signers.

The Federal Reserve has found that about 30% of all U.S. adults have student loan debt. The average student loan debt reached $38,792 in 2020, according to Federal Reserve statistics cited by Vanguard in a release.

With the Candidly partnership, Vanguard aims to create a modern and intuitive client experience for participants to “free up additional money that they can seamlessly put towards their retirement and financial goals,” Brestowksi adds. By using the platform, participants may be able to reduce their student loan interest rates, save on monthly payments and reduce their loan durations, according to Vanguard.  

Plan sponsors using the Candidly platform can access a suite of services that facilitate their employer loan repayment benefits for participants, says a Vanguard spokesperson. Additionally, plan sponsors can offer participants access to live coaching through Candidly.

Participants using the platform answer a few questions, after which the platform guides them to their next best action based on goals and data. 

The platform aims to help borrowers find a repayment plan that fits their budget by helping eligible employees determine if they can qualify for government-sponsored repayment plans, or if a refinance service can help them find out how to lower their interest rate or monthly payments across multiple lenders. The platform also has a public loan forgiveness module that can provide borrowers a way to certify, manage and track their progress toward reaching the threshold for the federal government program that can erase their student loan debt after 10 years in certain kinds of jobs.

Plan participants using Candidly can also repay their loans faster by using several features: Round Up, which collects spare change from daily purchases and applies payments to debt; The Giveback, an extension for Chrome-enabled web browsers that converts cashback earned from online shopping into student debt repayments; Autocrush, which enables borrowers to make onetime and recurring student loan payments on their debt; and The Village, which enables contributions to the debt of a loved one.