Fintech and 401k-related ancillary services were front and
center of the Global Retirement Partners Advisor Alliance (GRPAA) annual
conference in Haines, Alaska.
Laurel Taylor, the founder of FutureFuel.io, began with a
stark illustration surrounding student debt, a crushing issue with which many
Americans currently wrestle. It wreaks havoc with so many other financial
planning and saving goals, and she was called to address the problem due to
“Why did I found the company?” she rhetorically asked during
her Sunday morning opening session. “I went to Texas State, accumulated
$150,000 in student debt, and my mother was a social worker earning $24,000 a
It was never a question of if she would receive student
loans; it was always assumed. Her mother applied for and received a Parent-Plus
student loan with a 9% interest rate.
Taylor’s education continued with a master’s degree from the
prestigious Massachusetts Institute of Technology. Upon graduation, she went to
work for Google, had over an 800 on her credit score, and still had the same 9%
interest rate on her student loans.
“I knew at that moment figuring this out would be my
passion,” she added. “The average borrower takes 17 to 20 years to retire their
student loan debt. Americans hold $1.7 trillion in total student loan debt, the
second largest debt behind mortgages. I couldn’t believe there were no digital
solutions to help.”
Women and people of color hold two-thirds of student debt
only compound the problem, and the repayment periods are longer for those
demographics due to the wage gap.
“If you’re in your 20s, you shouldn’t need a Ph.D. to figure
out how to pay down student debt,” Taylor lamented.
A recent anecdote illustrated the scope of the issue.
COVID caused the suspension of loan payments for 46 million
Americans, and in October, they will once again be required to pay. The
Department of Education sought experts to help understand the potential impact.
“The day I testified, the federal student loan program
tweeted, ‘If you have questions, fax your caseworker,'” she said, emphasizing
the antiquated technology. “Every decision I’ve made, from the job I accepted
to the number of roommates I had, was influenced by my student debt.”
Thankfully, the Consolidated Appropriations Act allowed for
several relief provisions to assist employees currently struggling with student
debt. For example, plan sponsors can now use tuition reimbursement budgets,
which often go unused, to help pay down student debt., 84 percent of employees.
“Fully 84% of workers say student debt negatively impacts
their ability to contribute to their retirement plan,” Taylor concluded. “MIT’s
Age Lab found that it doesn’t matter if it’s $60,000 or $6,000, the mere
presence of debt is enough to block them from saving for retirement.”
FutureFuel.io is a student debt toolbox that empowers
businesses, their customers, employees, and partners to “crush student debt in
your own native experience, or ours.”
Click here for the