Employees at 46 universities and healthcare systems are now on track to achieve a projected $155 million in student debt forgiveness using debt-management tools provided by TIAA, a leading provider of retirements, and Savi, a social impact technology startup.
These employees are already saving on average $1,900 per year from reduced monthly payments and will receive on average approximately $50,000 each in debt forgiveness, marking significant milestones in the student debt-management program’s history.
Launched in June 2020, Savi and TIAA’s offering makes it easier for nonprofit institutions to provide meaningful student debt relief to their employees. The solution helps employees of these institutions reduce their monthly student loan payments immediately and qualifies them over time for relief from the balance of their federal student loans by enrolling them and keeping them compliant in the federal Public Service Loan Forgiveness (PSLF) program.
“Nonprofit employers need to be aware that there are resources like this that can make a huge impact on the lives of their employees,” said Snezana Zlatar, senior managing director and head of financial wellness advice and innovation at TIAA. “The current federal forbearance on student loans has been a safety net for many Americans, but it won’t last forever. Employees, especially those in nonprofit roles who dedicate their careers to serving others, should have the opportunity to lower their student loan payments and ultimately work toward debt forgiveness. We want to help create financial security for people and allow them to achieve their long-term financial goals.”
The solution from TIAA and Savi helps participants navigate the often-complex PSLF program, which has historically been challenging for borrowers who have difficulty understanding the rules and managing required paperwork.
In fact, the Department of Education released new statistics in March 2020 showing that only 1.8% of PSLF applicants had been approved. TIAA and Savi currently have more than a 99% approval rate for users submitting paperwork for the PSLF program. The tool is specifically designed to identify and flag issues directly related to a borrower’s PSLF eligibility before submitting any form of application on their behalf.
The TIAA and Savi solution is like a student loan concierge service that helps educate users about their options and meet critical deadlines. This is particularly important during the current payment suspension when even the months where no payments are required still count toward forgiveness.
“With student loan payments resuming in October 2021, it is more important than ever for borrowers to get on track and be aware of their options,” said Aaron Smith, co-founder of Savi. “Borrowers should take the time while payments are still paused to check out options like income-driven repayment plans to keep their monthly payment lowered and check their eligibility for loan forgiveness options. Not waiting until the last minute is important and will help ensure a smooth return to repayment.”