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Student Debt Relief: 3 Financial Wellness Benefits to Support Employees With Student Loans

Student Debt Relief: 3 Financial Wellness Benefits to Support Employees With Student Loans

by | Jun 20, 2023 | Blog

Student debt relief: 3 financial wellness benefits to support employees with student loans. Many employees struggle to manage their student debt. These 3 wellness benefits can help. 

In summer 2022, the Biden administration announced its one-time student loan relief program, intended to cancel student debt for Pell Grant recipients and middle-class families. However, with ongoing litigation, the program has been blocked, leaving borrowers unsure whether they’ll receive up to $20,000 in relief or not.

Regardless, many student loan payments are set to potentially resume in 2023 and many borrowers still have remaining debt that needs to be paid off. According to a CNBC poll, most Americans feel stress and mental anguish when it comes to their student loan debt (60%). Learn how companies can help employees manage their student loan debt and dial down their overall financial stress.

important statistic about how employees are impacted by student debt

3 financial wellness benefits to help employees tackle student debt:

1. Scenario planning

Employees are increasingly worried about inflation — over 40% of employees say inflation has recently had a detrimental impact on their finances, according to PwC’s 2023 Financial Wellness Survey. With talks of a potential recession, focusing on what may or may not happen can cause employees’ fears and worries around finances to increase.

Scenario planning helps employees see how their budget will change amid different “what if” scenarios. For instance, employees can see how their finances may change if inflation continues to rise — they can also gain insight on how their loan repayments may change with or without the student debt relief program. Rather than thinking hypothetically, with scenario planning, employees can address financial uncertainty, make well-informed decisions and dial down their financial worries and stress.

2. Budgeting tools and calculators

Many borrowers haven’t paid their student loans since March 2020, when the U.S. government commenced the Covid-19 student loan repayment pause. There’s a strong likelihood of student loan repayment resuming this year and employees may need help re-integrating their loan payments into their monthly budget — online tools like budgeting calculators can help with this.

With budgeting tools, employees can manage student loan repayments and other expenses, digitally, all from their phone. Budgeting calculators can help employees put in perspective how much money is coming in versus how much money is going out. These insights can identify areas where employees can scale back spending and increase saving. Moreover, 52% of employees prefer digital financial wellness tools, including budget calculators, according to Bank of America’s 2022 survey, given their ease of use and accessibility. 

3. One-on-one financial advisors

Juggling short-term and long-term financial goals can be overwhelming. Some employees have trouble deciding how to best allocate their money across various goals, like saving for retirement while balancing student loan payments. Over 80% of people with student loans say they delayed key life milestones to pay off student loan debt, according to CNBC’s poll. And about 40% of student loan borrowers say they’ve delayed saving for retirement due to looming student debt. 

For some employees, having personalized financial advising can help them manage short-term financial goals alongside their long-term financial goals. Student loans, for example, is a long-term debt that likely involves some long-term planning. A financial advisor can help employees gradually work toward their long-term financial goals, without losing sight of short-term goals, like paying rent on time or saving for a trip. Moreover, as employees’ financial situations change, a financial advisor can provide guidance on how to best navigate such changes.

To help employees get the most out of their financial wellness benefits, consider bundling benefits together. For instance, giving employees access to budgeting tools and financial advisors can allow them to leverage both for improved financial wellness. Plug-and-play budgeting tools can be used to answer one-off questions and for more in-depth guidance, employees can speak to a financial advisor. Moreover, financial advisors can help employees learn how to best utilize calculators and other financial wellness tools for their personal financial situation.

Looking for an easy-to-use financial wellness program to target employee student debt? Try Best Money Moves!

Best Money Moves is a mobile-first financial wellness solution designed to help dial down employees’ most top-of-mind financial stress. As an easy-to-use financial well-being solution, Best Money Moves offers comprehensive support toward any money-related goal. With 1:1 money coaching, budgeting tools and other resources, our AI platform is designed to help improve employee financial wellbeing. Our intuitive, easy-to-use program platform is fit for employees of any age and level of financial literacy.

Whether it be retirement planning or securing a mortgage, Best Money Moves can guide employees through the most difficult financial times and topics. We have robust benefits options for employers, regardless of their benefits budget. 

Our dedicated resources, partner offerings and 700+ article library make Best Money Moves a leading benefit in bettering employee financial wellness. 

To learn more about Best Money Moves Financial Wellness Platform, let’s schedule a call. Contact us and we’ll reach out to you soon.

Employee Debt Is Hurting Your Workforce. Here’s How To Help.

Employee Debt Is Hurting Your Workforce. Here’s How To Help.

by | Jun 12, 2023 | Blog

Employee debt is hurting your workforce. Here’s how to help. Here’s what to know about employee debt, how it occurs and what you can do to lighten the load for your team.

Personal debt is a major issue for Americans, and it’s getting worse. According to the Federal Reserve, American household debt was at $16.9 trillion at the end of 2022, up $2.75 trillion from 2019. As the issue continues to grow, the responsibility of maintaining healthy personal finances falls on employers as well as employees.

Surprising statistic block concerning employee debt and Federal Reserve data.

How does employee debt occur?

According to EBRI’s 2022 Workplace Wellness Survey, 80% of employees are bothered by their debt level. But where does this debt originate?

Employee debt can occur from a number of different sources. Credit card debt is one of the foremost challenges for employees. According to the same EBRI survey, among employees with debt, 78% of those surveyed cited credit card debt as a ‘problem’ for their financial situation. Another survey conducted by LendingTree estimates that Americans owe a collective $986 billion in credit card debt.

Student loans and medical debt also pose a significant challenge. The U.S. owes over $1.6 trillion in student loan debt dispersed between around 43 million borrowers, according to data by Forbes. Meanwhile, data from the Kaiser Family Foundation estimates that 1 in 10 American adults owes some form of medical debt, and Americans’ collective debt totals at least $195 billion.

Addressing employee debt in the workplace

Employees with debt are three times as likely to suffer from depression, anxiety and general stress, according to AIMS Public Health, and these poor mental health outcomes have long been linked with poor performance at work. Employee stress costs an estimated $7,000 per employee per year. 

However, the nature of debt means that your employees could be suffering in silence. A recent financial well-being index from TELUS Health found that while 2 in five workers felt overwhelmed by their debt, almost 75% of those surveyed had yet to reach out to their employers for help due to embarrassment. 

It’s important that employers confront this issue head-on with accessible financial wellness tools. Providing a financial wellness solution increases workplace productivity and signals to your employers that their personal well-being is being cared for.

Workers gravitate towards the idea that their employer should play a role in relieving their debt. A 2022 Bank of America study found that 4 out of 5 employees say that their companies should be playing a role in their own financial wellness. The solution isn’t a simple paying off of debt but requires education and training in order to instill healthy financial habits in employees.

Best Money Moves could be the solution you’re looking for!

Best Money Moves is a mobile-first financial wellness solution designed to help dial down employees’ most top-of-mind financial stresses. With budgeting tools and personalized money coaching, users can easily receive comprehensive financial advice right from their phones.

Focused on user-friendliness, Best Money Moves is designed to bring financial wellness resources right to the fingertips of employees. Our dedicated resources, partner offerings and 700+ article library make Best Money Moves a leading benefit in improving employee financial wellbeing.

To learn more about Best Money Moves Financial Wellness Platform, let’s schedule a call. Contact us and we’ll reach out to you soon.

COVID-19: Forbearance and Debt Repayment Relief

COVID-19: Forbearance and Debt Repayment Relief

by | Apr 30, 2020 | Blog

COVID-19: forbearance and debt repayment Relief. If you’ve lost income due to the coronavirus pandemic there may be options to temporarily reduce or stop loan repayments.

Millions of people across America are now facing unexpected financial difficulties due to the Coronavirus/COVID-19 pandemic, and many are finding it hard to stay on top of their bills, such as rent, utilities, cell phone service and student loans. 

In the five weeks since the pandemic shutdown reached its full height in mid-March, more than 26 million Americans have applied for unemployment benefits. That number accounts for the significant number of people experiencing temporary or permanent unemployment.

If you are one of the many who have lost their jobs, been furloughed or experienced a pay cut due to the COVID-19 pandemic, you have a variety of debt repayment options available to you through your lenders and creditors. One option may be forbearance (also known as deferred payments), which is an agreement with a lender or credit allowing the borrower to postpone or stop loan payments for an agreed-upon duration of time. 

Are My Debts Eligible for Forbearance? What Does It Mean If They Are?

When most people use the term “forbearance,” it’s often linked to home mortgages, but any lending agreement you’ve entered into may be eligible for deferred or suspended payments. 

The drastic and sudden economic impact of the COVID-19 pandemic has led many creditors and lenders to offer special repayment options on a multitude of debts. This includes mortgage payments, student loans, auto loans, credit card balances, utilities, property taxes and small business loans, though this list is not all-encompassing. 

Your lenders and creditors may agree to allow decreased or delayed payments for a specific time period up to 12 months, depending on the deal you strike with them. They might also offer to reduce the interest rate you’re being charged on your debt, though there are no federal guidelines outlining detailed terms for forbearance agreements, so your options may differ.

If You Need Specific Info on Eligibility for Your Debts, Talk to Your Lender or Creditor

For forbearance agreements during the COVID-19 pandemic, each lender and creditor has created their own programs and rules. Eligibility for those programs depends on your particular lender or creditor. To learn more about setting up forbearance or about the other options available to you, including options outside of forbearance, contact your lender or creditor directly.

Importantly, you cannot simply miss a payment and expect to be off scot-free without communicating with your lender about your situation. Your credit standing could be compromised unless you work out a deal with your lender before stopping payment. 

Forbearance may help you deal with your short-term financial difficulties and assist you in getting back on your feet, but it doesn’t come without its drawbacks. If you enter into a forbearance agreement, you’re not getting a gift or “free money. You may still need to repay interest that accrues during your approved deferral period, and late fees might still apply, depending on your agreement with your lender or creditor. Ask them directly if you have more questions on how and when any fees may be applied, and how they will report your forbearance agreement to the nationwide credit reporting agencies. 

How Do Forbearance or Deferred Payments Work for Different Types of Debts?

If you’re currently facing financial hardship due to a layoff, furlough or pay cut, reach out to your lender or credit to learn more about their options for debt repayment programs and whether you’re eligible. The following details some of the special forbearance arrangements that have been prescribed by the Coronavirus Aid, Relief, and Economic Security (CARES) Act for different scenarios you may be facing now:  

  • Mortgages

Fortunately for people who are struggling to keep up with mortgage payments, federal officials have announced a temporary nationwide halt to foreclosures and evictions for federally-backed mortgages. People who have suffered a loss of income due to the COVID-19 pandemic can qualify to reduce or suspend payments for up to 180 days, with specifics depending on their particular situation. 

Borrowers whose mortgage loans are backed by Fannie Mae or Freddie Mac, which underpin the majority of loans in the United States, or by the U.S. Department of Veterans Affairs (VA), the Federal Housing Administration (FHA) or the USDA are eligible for help, including options for forbearance and delayed payments. You must contact your loan servicer to request this forbearance.

To combat ongoing misinformation, the Federal Housing Finance Agency reiterated at the end of April that borrowers in forbearance with a federally-backed mortgage are not required to repay the missed payments in one lump sum. Your mortgage servicer will contact you about 30-days before the end of the forbearance plan to see if the financial hardship has been resolved and discuss your repayment options.

You can search for your loan on the FannieMae.com and FreddieMac.com websites to determine whether one of them has purchased your loan from your original lender or call your mortgage servicer directly. In addition, Fannie Mae and Freddie Mac have halted foreclosures and evictions during the Coronavirus/COVID-19 pandemic, so visit their websites for regularly updated information on how to get relief.

If your loan is not federally backed, you will have to call your mortgage servicer to find out whether they offer any COVID-19 pandemic relief. Review your monthly statement or visit your mortgage servicer’s website for information on how to contact a customer service agent.

If you’re a homeowner who doesn’t know what company backs your mortgage, you can find more information about the federal foreclosure and eviction moratorium and related Coronavirus/COVID-19 actions on the U.S. Department of Housing and Urban Development website. 

  • Student Loans

For most federally held student loans, payments and interest are automatically suspended through September 30, 2020, though that date may be extended with additional legislation. You do not need to take any action for this to take effect. 

However, some student loans do not qualify for this benefit, including loans under the Federal Family Education Loan (FFEL) Program, private student loans that are owned by commercial lenders and some Perkins Loans that are held by the institution you attended. To request a forbearance agreement or delayed payments on these loans, contact your loan servicer. 

(And remember: If you find yourself with additional cash and are able to continue making your payments, even though none are required for the time being, you’ll chip away at your debt and better position yourself for financial security after the COVID-19 pandemic is behind us.)

  • Auto Loans

A significant number of auto lenders are offering forbearance agreements or deferred payment plans during the pandemic. This includes options for existing customers as well as those looking to purchase a new vehicle. Contact your lender or automobile manufacturer to learn more about their specific deals. 

  • Credit Cards

Every credit card company has different options and eligibility requirements for forbearance or payment deferrals on your credit card debt. Some may allow you to defer payments while interest continues to accrue over a set period of time, while others may offer to reduce your interest rate or principal payments temporarily. Go to your credit card issuer’s website to learn what options are available and what you have to do to get help. Even if your credit card company isn’t offering a plan that works for you today, it might add new options in the near future, so check back frequently for updates. 

  • Utilities and Property Taxes

Many cities and states across America are offering relief options for utility bills and property taxes to those impacted by the COVID-19 pandemic. This may include forbearance or deferred payments. Call your local municipality or utility provider for details. 

  • Small Business Loans

The federal government has committed a significant amount of disaster relief money to small business owners who have been impacted by the COVID-19 pandemic. The original CARES Act included a provision called the Paycheck Protection Program, which provided small business loans that are fully forgivable in many circumstances, making the money similar to a grant. Businesses have to apply for the loan, which was designed to cover about two months of payroll expenses. Although the initial tranche of money has run out, Congress recently passed another bill with hundreds of billions of dollars in additional funding for small business loans.

If you are a struggling business owner, the Paycheck Protection Program may give you an alternative to requesting forbearance or deferred payments, and buy you some time to get back on your feet. Read more about small business relief options at the U.S. Small Business Administration website.

This information may change as the COVID-19 pandemic evolves, and we’ll continue to provide up to date information as it does.

More on Topics Related to COVID-19: Forbearance and Debt Repayment Relief 

CARES Act: 4 Key Pieces for You

Coronavirus/COVID-19: Where to Get Help

How COVID-19 Impacts Your Student Loans

COVID-19 Information Center: What to Understand

Coronavirus: Financial Stress Statistics 2020

Financial Wellness Research Warrants Worry

Financial Wellness Research Warrants Worry

by | Sep 24, 2018 | Blog

Research from Prudential reveals just how far Americans are from reaching financial goals, like having enough savings to get through retirement years, as well as how optimistic or pessimistic they are about their financial future.

More than half of Americans believe their financial wellness is below average based on their level of income, savings, assets and debts, according to Prudential’s first-ever Financial Wellness Census. Out of 22 common financial goals, most Americans only have two under control: staying in their home when they retire and keeping up with current expenses.

“Our relationship with money can affect our physical health, stress levels and state of mind, family dynamics and even our performance at work,” says Stephen Pelletier, executive vice president and chief operating officer of Prudential’s U.S. based businesses. “Only by listening can we truly learn what people need to help them get on the path to financial wellness and stay on the right track throughout their lives.”

Almost a third of Americans think they are better or worse off financially than they actually are. Nearly 20 percent perceive themselves to be in good financial shape despite having a low level of objective financial health. Over 10 percent of those with high levels of objective financial health are still pessimistic about their finances.

Respondents ranked having enough savings to last through retirement years and the ability to pay for future healthcare needs as the most important financial goals. Surprisingly, for more than 70 percent simply keeping up with current expenses is their primary financial focus.

Even though less than half of Americans are on track to achieve their financial goals, more than 50 percent are optimistic that they will eventually achieve them. Prudential’s report offers a reason for this positivity discrepancy, finding that working with a financial advisor correlates with a more positive outlook on financial health.

It’s not enough to offer retirement benefits if employees don’t know how to manage and grow their 401(k) (or finances in general). “The journey to financial wellness is deeply personal,” says Niharika Shah, Prudential Financial’s vice president of brand marketing. Financial wellness benefits that include personalized support features help employees learn more about improving their financial health, reduce their financial stress and bring them closer to achieving their financial goals.

Debt Stress Kills Employee Engagement. But You Can Fix It.

Debt Stress Kills Employee Engagement. But You Can Fix It.

by | May 3, 2017 | Blog

In this week’s Best Money Moves roundup, we take a look at news stories and new research studies that may impact employee benefits and HR issues. We hope you find this news roundup helpful, and we’d love your feedback.

Debt is one of the biggest sources of employee financial stress and when workers are stressing out over their latest credit card bill, you can bet employee engagement in the office will suffer.

In a consumption-oriented society that values the instant gratification of a big purchase and encourages us to go into debt to live the “good life,” it’s no wonder employees are struggling.

That’s where employers can step in. Teaching basic money management and savings strategies helps them dial down their financial stress and focus on other things — like their jobs.

Here’s how reducing debt-related stress can improve employee engagement at work.

Financial stress has additional consequences for women. A new study by the Institute for Behavioral Medicine Research at The Ohio State University Wexner Medical Center found that pregnant women who faced higher levels of financial stress were more likely to have a baby with a low birth weight – which often brings additional medical issues and stressful medical bills.

What drives employee retention? Good leaders. But how can you tell if the leaders in your company are helping or hurting your effort to hang onto your best employees? Look for these 10 red flags.

Spring cleaning applies to your finances, too. But many Millennial employees struggle with basic financial practices. Are your employees asking these questions about budgeting?

You just found out your new hire stole trade secrets from their last employer. Now what? Read on for three tips to avoid this situation from the outset and four steps to take when you discover the theft.

LinkedIn is a great resource in the search for new hires. These profiles are like digital resumes, but they can also drop hints that a candidate isn’t right for you. 10 LinkedIn red flags to avoid.

Flexible scheduling is a hot employee benefit this year, but many employees feel that taking advantage of it makes them look lazy. Ending the flexible scheduling stigma.

Companies benefit from having a financially secure workforce. A survey of financial industry CEOs found 82 percent think a financially secure workforce helps their bottom line. Why financial wellness is key to employee retention.

Only about 30 percent of employees are engaged at work, which means a stunning 70 percent are disengaged. What can you do to help employees find meaning in their jobs and re-engage? 15 actionable ways to make work more meaningful.

The pain of getting fired can follow you for a long time. In fact, the heartbreak that comes with losing a job may be worse than divorce. Why pain and stress follow fired employees.

Have something to add? Email info@bestmoneymoves.com.

It’s hard to stay on top of everything in the news. That’s why each week our Best Money Moves newsroom will bring you the most important news in financial wellness, employee benefits and financial stress. We hope you like the information and, if you do, please spread the word. For midweek developments, follow us on Twitter and on Facebook.