Thrive is offering a new student loan debt repayment program that enables employees to use existing employer 401(k) contribution matching dollars. Employees can determine how they want to allocate these dollars—be it to their retirement account, to their student loans or to a combination of both.
“Direct contributions to student loan debt by the employer can be a major expense for an organization, but we knew there had to be a better way,” says David Krasnow, president of Thrive. “I’d heard from my clients for the past several years that they needed a way to help employees struggling with student loan debt. Thrive provides exactly what organizations have been searching for and gives them an edge in hiring and retaining top talent.”
Thrive takes care of all of the administrative work, handling all back-end administration, including education, enrollment and making payments to each participant’s student loan provider from both employee contributions and employer match. Thrive notes that currently, $24 billion in employer matching dollars is unused every year.
Furthermore, Thrive says that 44 million Americans have student loan debt amounting to $1.5 trillion, and $32 billion in student loan debt is in default. More than a million borrowers default every year. By 2023, it is expected that nearly 40% of borrowers will default on these loans.
Thrive also points to research that shows that 76% of employees say that student loan repayment programs would be a deciding factor in accepting a job, and 86% would feel compelled to stay with an employer that offered such a program for at least five years.