The new programs are available through MassMutual’s MapMyFinances and powered by Tuition.io
“More than 40 million Americans are burdened by a total of $1.5 trillion in student loan debt , which amounts to an average of $37,000 in outstanding indebtedness per worker upon graduation ,” said Tina Wilson, Head of MassMutual’s Investment Solutions Innovation. “Carrying such a heavy debt burden makes it difficult for many people to address other financial needs, particularly saving for retirement.”
With those sobering statistics in mind, MassMutual has launched a new student loan repayment and a management program for the workplace. The student loan program is available to employers through Tutition.io, a leading online platform for student loan contributions. The Tuition.io program offers two levels of support for debt repayment, both aimed at helping borrowers to better manage their student debt.
An innovation approach to attracting and retaining Millennials
“Companies that want to attract the newer generations of workers should consider that 51 percent of young employees said help with student loan repayments would be their most important benefit [3] ,” said Scott Thompson, CEO of Tuition.io. “A student loan benefit can also encourage employees to stay at the company longer, and build stronger company loyalty.”
According to the latest figures from the Federal Reserve Bank of New York’ Quarterly Report on Household Credit and Debt, outstanding student loan debt “…increased to $1.49 trillion in the First Quarter of 2019, a rise of $29 billion for the quarter, while the student loan debt in 2018 rose by a total of $79 billion.”
“The thousands of dollars in student loans that many Americans shoulder is proving to be a real barrier to financial wellness, both in the short and long term,” Wilson said. “MassMutual is introducing Tuition.io to workplace customers as part of our overall mission to enhance the financial wellness of all Americans.”
A quick primer on how it works
The following is an quick explanation from MassMutual on how it works:
The student loan repayment option available through Tuition.io is called “Student Loan Contributions” and allows employers to make payments towards an employee’s student loan indebtedness. Some employers elect to provide student loan repayment assistance to employees with the goal of enhancing their employees’ overall financial wellness and freeing up money for longer-term financial goals such as saving for retirement, according to Thompson. Employers can also choose to make payments towards student loans that parents have taken out for their children, known as Parent PLUS loans.
Additionally the Tuition.io student loan wellness section of the portal helps borrowers manage their debt by creating a consolidated summary of all student loans for each participating employee by pulling in data from multiple loans and loan servicers. The Tuition.io platform works with every US loan servicer – including both federal and privately held loans — to generate automatic real-time updates whenever loan payments are made.
With all loan data available in one place, employees can more easily model different loan repayment options as well as determine if paying extra to certain loan providers can potentially save on the amount of interest paid in the long run. Employees can also more easily assess whether refinancing makes sense for their personal situation. The student loan wellness section of the portal can be made available to eligible employees’ family members as well to provide the same loan management tools and capabilities.
Once the Student Loan solution has been elected by an employer and implemented through Tuition.io, MassMutual integrates the program as part of its MapMyFinances financial wellness tool. Employees can use the tool to add student debt repayment to their financial “To Do” list and use an actionable link to Tuition.io’s employee online experience, leveraging single sign-on from MapMyFinances.
The student loan program has a cost associated with it. Tuition.io helps employers project both the program and loan repayment potential costs, and weigh them against the projected benefits.
MassMutal’s New MapMyFinances Tool
The MapMyFinances tool launched earlier this year as a new free tool for employers who use MassMutual’s “401(k) or other defined contribution retirement plan services, voluntary insurance benefits or both.” The online tools provides a personalized financial wellness score to help workers correctly assess both their short-term and long-term financial goals in order to better manage their unique financial situation.
“MapMyFinances is breakthrough financial wellness technology designed to help all Americans secure their financial futures and protect the ones they love,” said Tina Wilson, Head of Investment Solutions Innovation. “Whether you’re starting your career, preparing to retire or somewhere in between, MapMyFinances can help you make the best choices about saving for retirement, protecting your family and securing your financial future.”
The tool replaced MassMutuals’ MapMyBenefits tool, now offers the ability to provide users with a personal financial wellness score as well as to offer additional retirement services and protection benefits and can offer services not offered by MassMutual, such as the new student repayment loan program with Tuition.io.
The Need is Acute
According to a MassMutual study on Middle America Financial Security, the insurer compiled the following statics after conducting an online poll of 1,010 working Americans, ages 25-65 who participated in their household’s financial decisions and had an annual household income between $35,000 and $150,000.
- Thirty-seven percent of respondents to reported feeling “not very” or “not at all” financially secure, while the majority (54 percent) described themselves as “somewhat secure”2.
- Money worries accompany many Middle Americans to work. Four in 10 study respondents (40 percent) said they worry about money at least once a week while at work.
- Half (51 percent) of Americans who are less affluent – those earning less than $45,000 – reported bringing their financial concerns to work at least once a week and 20 percent said daily.
- Overall, nearly two-thirds (65 percent) of the respondents to the study said a financial emergency or major expense was one of their top worries. Overall, 22 percent of respondents cited debt as their top financial problem with more millennials and Generation Xers saying so. As Middle Americans age, healthcare costs rise in importance, becoming the No. 1 concern for baby boomers.
“Sadly, financial struggles weigh heavily on many middle-income Americans,” Wilson said. “With the introduction of MapMyFinances, MassMutual is working to lighten their loads and help guide them to the path towards greater financial security.”
