Finovate, 401(k)s, and the future of student loans

by Jovan Hackley | May 09, 2016

Dwolla, LearnVest, and Bazaarvoice along with giants like PayPal, IBM, and MasterCard have all stood where we’ll stand – The Finovate stage.

The stage where TIBCO’s data smarts changed the way customers are helped; the stage where Reuters launched game changing apps that improved the way we get information; and, this week, the stage where we’ll show off our new 401(k) contribution feature that changes the game for companies and employees who are behind on investing because of their student loans.

TACKLING THE REAL PROBLEM WITH STUDENT LOANS

This time three years ago, when we founded Student Loan Genius, this day seemed light years away. For years, our pitch of “the 401(k) for student loans” made ears perk up and then turn off. No one thought it was possible.

The idea that we could connect paying off debt with building wealth simultaneously seemed pie in the sky. This week, I’m looking forward to showing off that it’s not. The concept is real. The benefits are real. The customers (thankfully) are real. And, the impact is very real.

HOW MUCH GOOD CAN AN EMPLOYER 401(K) CONTRIBUTION STUDENT LOAN BENEFIT DO?

So, this nice idea coming to life is worth celebrating, but there’s something bigger at play here. A $100 contribution using our 401(k) feature does more than just put a few extra pennies in the piggy bank. Part of the reason that we prioritized this as the first feature release this year is because it does more good than anyone, outside this Genius team I get to work with, realizes.

Here’s just one example.

Say you’re “Jane,” a 23-year old college grad making $45,000, and you get the chance to use your student loan payments as a 401(k) contribution trigger with our student loan benefit. Your ability, with the benefit, to start investing on day one instead of waiting five years turns into $230,000 additional dollars when you get to retirement.

In addition, in the meantime, those growing funds could potentially help you get to the major life milestones like buying your first home or sending your future child to school and helping them avoid student loans. That’s a lot of good.

On the other side of the coin, figures like this can have a serious impact on her company. With 401(k) dollars that are already allocated, a company can reduce the likelihood that someone like Jane will jump ship because, with the benefit, her job is more than a check. It’s wealth building.

CHANGING THE STUDENT LOAN STORY

For years we’ve been conducting student loan studies for companies. Every time, we get a flood of stories from people who say they can’t live the life they want and expected because of this weight. I’ve heard, “I’ll never be able to invest or save” and “buying a home seems impossible” way too many times.

That’s why I’m excited about this week and Finovate. I’m excited that people will finally get to see that it’s possible; that the dream of crushing debt while getting ahead financially is real. Student loans don’t have to be the enemy of wealth building. With just a little help from a company, employees can change their story.

I just wanted to share why I’m excited. Stay tuned. This is the first of a few surprises we have in the works.

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by Jovan Hackley | May 09, 2016

by Jovan Hackley | May 09, 2016

by Jovan Hackley | May 09, 2016