Tag: Student Debt

SRP 2nd 2020 Quarter Participant Webinar

Saving for both college and retirement can be a daunting task. It’s easy to feel like these huge financial goals are in competition with one another. How does one prioritize? Let’s explore the challenges of saving simultaneously for multiple family goals. SRP’s very own Zach Morris (Financial Advisor, Providence RI) will offer specific strategies and tools – especially around 529 accounts, college cost trends, and student debt management – that can help you prepare more effectively.

All retirement plan participants and eligible employees are welcome!

Please join us on Tuesday, May 12th (1:00pm EST / 12:00pm CST / 10:00am PST) for this live Participant Education event!

REGISTER HERE:  https://tinyurl.com/SRPCollege

Limited space available so register today!

This session will be recorded.

The CARES Act and Student Loan Repayment Benefits

Did you know the CARES Act has provisions that impact student loans?

• Extends the tax benefits of Tuition Reimbursement programs under IRS Section 127 Education
Assistance Programs
• Payments by an employer to student loans are not included in an employee’s income
• Up to $5,250 is eligible
• Applies to payments made between 3/28/2020-12/31/2020
• Covers principal and interest
• Federal student loan automatic monthly payments are suspended through 9/30/2020
• Interest on federal student loans is 0% through 9/30/2020
• Any manual payments to federal student loans through 9/30/2020 will go to principal only
• Any missed payments under the CARES Act will still qualify as a payment under the PSLF Program

Student Loan Repayment Benefit Plans are one of the fastest growing employer benefits

• Number of employers offering this benefit increased 100% from 2018-2019¹
• Student loan repayment plan is the most requested financial benefit²
• Outstanding student loan debt has tripled in 12 years from 2007 to 2019³
• Average student loan debt balance is $37,172⁴
• 1 in 4 Americans have student loan debt⁵

Types of Student Loan Repayment Benefits Plans Available

• Direct Pay – Employer makes payments to a student loan provider for a fixed amount (monthly)
• Employer Matching – Company makes a matching contribution to retirement plan for employees
making student loan payments unable to contribute to the retirement plan (Abbott Labs example)
• FlexMatch – Gives employees the flexibility to use company matching dollars towards paying
down student loan debt or being traditionally matched in their retirement plan

SRP can help with the administration of Student Loan Benefit Plans.
Contact your local SRP Managing Director to learn more!


Securities offered through LPL Financial, Member FINRA/SIPC. Investment advisory services are offered through Global Retirement Partners, an SEC Registered Investment Advisor. Global Retirement Partners and Strategic Retirement Partners (SRP) are separate entities from LPL Financial.
Global Retirement Partners employs (or contracts with) individuals who may be (1) registered representatives of LPL Financial and investment adviser representatives of Global Retirement Partners; or (2) solely investment adviser representatives of Global Retirement Partners. Although all personnel operate their businesses under the name Strategic Retirement Partners (SRP), they are each possibly subject to differing obligations and limitations and may be able to provide differing products or services.



²https://www.benefitspro.com/2018/05/07/student-loan-benefits-more-popular-with-workers-th/ and https://blog.accessperks.com/2018-employeebenefits-perks-statistics#engagement;

³https://www.valuepenguin.com/average-student-loan-debt and https://www.studentloanplanner.com/student-loan-debtstatistics-average-student-loan-debt/;



Back to School… But How Are You Paying for It?

45 million Americans owe $1.48 trillion in student loan debt as of 6/30/19, a +114% increase (up +$790 billion) in just the last 10 years (source: Federal Reserve Bank of New York). We hear from many plan participants that they know they need to save more for their retirement, but they are already stretched to the limit paying for their children’s college tuition.

One way that employers are aiming to help their employees with this challenge is through flexible matching programs. These programs aid employees who have student loan debt or want to create college savings, while still helping them to save for retirement.  One of the best parts is that employers can implement these types of programs without significantly increasing their benefits budget. Employees are simply choosing how to allocate their employer match: to the retirement plan, education expenses, or both.

For more information on flexible matching programs, contact your SRP Managing Director.

Student Debt and Your Retirement Plan

For many employers student debt assistance is the next frontier in employee benefit design. And with over $1.4 trillion in student debt, second only to mortgage debt for Americans, it’s easy to see why.*

In August of 2018 a private letter ruling from the IRS that stated, under certain circumstances, an employer can link 401(k) match to student loan repayments outside the plan. You may be thinking, what does one have to do with the other. Considering that  college graduates with student debt accumulate 50% less retirement wealth in their 401(k) by age 30 than those without**, this type of program could be key in boosting this groups retirement savings.

One interesting factor is that adding student debt program like Flexmatch would likely not increase employer costs, instead just shifting them from one bucket to another, while offering an attractive option to those who may be dealing with conflicting financial priorities.

For more information on student debt matching program, contact your SRP Managing Director.

*Federal Reserve Bank of New York

** Center for Retirement Research at Boston College http://crr.bc.edu/wp-content/uploads/2018/06/IB_18-13.pdf