Data & Research April 25, 2017

Parents Unaware of Options to Help With Student Loan Debt

Twenty-seven percent of parents surveyed say they have withdrawn from retirement savings to help cover student loan payments.
Reported by

Among parents surveyed by Student Loan Hero, nearly three in 10 (27%) say they have withdrawn from retirement savings to help cover student loan payments.

Thirteen percent indicate this was for their own student loan debt, 10% for a child or children’s student loan debt, and 4% for both. A similar percentage of parents (24%) say they considered using retirement savings to pay student debt.

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The survey also reveals that a majority of parents are unaware of options that can help. Fifty-six percent of parents don’t know about options like a cosigner release or an income-driven repayment plan. Nineteen percent of parents surveyed are unaware they can put Parent PLUS loans on an income-driven repayment plan (called Income-Contingent Repayment), and 12% don’t know how to refinance student loans into their child’s name.

In addition, nearly two out of five parents (19%) surveyed are unaware of Public Service Loan Forgiveness, which can help eliminate debts for parents and students who hold government jobs or work for certain nonprofits.

Looking at both their student loans and student loans they used to pay for a child’s education, 23% have more than $50,000 in student loan debt; 32% have more than $40,000 in student loan debt; and 43% have more than $30,000 in student loan debt.

The survey was conducted via Google Consumer Surveys on behalf of Student Loan Hero from April 5 to April 9, 2017, with a nationally representative sample of 1,001 adults living in the United States. Full survey results are here.
Compliance April 24, 2017

DOL Wins Settlement Over Withheld Contributions

Fiduciaries of the Weinhagen Tire Company 401(k) Plan agreed to an order resolving the DOL's lawsuit claiming the fiduciaries allowed the misdirection and misuse of employee contributions.
Reported by

The Department of Labor (DOL) has collected more than $41,000 for participants of the St. Paul, Minnesota, based Weinhagen Tire Co. Inc. 401(k) Plan.

According to a consent order and judgement obtained in the U.S. District Court for the District of Minnesota, an investigation by the U.S. Department of Labor’s Employee Benefits Security Administration found from at least February 1, 2010, to May 27, 2015, plan fiduciaries withheld $35,363 from employee’s pay for voluntary contributions to the plan.

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During that same period, the company retained approximately $29,058 of those contributions in its corporate bank account and used them for general operating expenses, in violation of the Employee Retirement Income Security Act (ERISA).

Weinhagen and Weinhagen Tire Co. restored $4,000 to the plan on September 22, 2016, and an additional $37,754 on November 4, 2016. These actions restored to the plan all losses, including lost opportunity costs, resulting from fiduciary breaches for which they are liable.

Under terms of the consent judgment, the company is “enjoined from violating ERISA in the future,” and Larry Cumpston, Lawrence Cumpston & Associates, is appointed as plan co-administrator, recordkeeper and fiduciary.

The company must also file all delinquent Form 5500 Annual Reports for the plan.

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