A relatively new company, FutureFuel.io, is helping companies offer student loan debt repayment as an employee benefit.
Founded in 2016, FutureFuel.io makes the implementation of a student loan debt repayment program easy for employers. Companies that work with FutureFuel.io are able to employ the SaaS platform that enables employers to contribute payments to their employee’s student loan debt total.
The company was founded by Laurel Taylor with the goal of lessening the $1.41 trillion national student loan debt in the United States. Taylor was convinced that young Americans covet an employee benefit that works to pay down an employee’s educational debt. Currently, only about 4 percent of employers offer some sort of student loan debt repayment benefit.
While speaking with Business Insider, Taylor stated the following: "Users today prefer student debt repayment over food, foosball, and a 401(k). What we see, in general, is that 50% of employees opt-out of their 401(k). They're saying, 'My student debt is crushing. I have to pay down my debt first.’”
How does FutureFuel.io make money if they are simply a vehicle for employers to contribute to their employee’s student loan debt total? The company charges transaction fees to any company that uses FutureFuel’s software to control employee benefits. FutureFuel will also charge consulting fees if they assist a company in determining which benefits best fit their employees. Finally, the company will take a percentage of any student loans that are refinanced through FutureFuel’s app.
As the student loan debt crisis continues to worsen in the U.S., more and more employee benefit companies are integrating student loan repayment into their bundle of services. For example, just last week The Student Loan Report covered the story regarding Fidelity Investments who offered a new student loan benefit to employers. Fidelity will pilot the benefit in the fourth quarter of 2017 and will fully roll-out the product in early 2018. Fidelity’s Student Debt Employer Contribution program will enable employers to make after-tax payments to an employee’s educational debt.
On September 8th, The Student Loan Report discussed Fifth Third Bank’s new app, the Fifth Third Momentum app, which allows bank customers to make automated micropayments to their student loan balance. Any purchase made with a Fifth Third debit card will round up the purchase amount to the next dollar, and the amount that was used to round-up the purchase will go towards the borrower’s student loan debt balance.
Finally, Gradifi, a company that specializes in offering student loan benefit programs to employers, recently announced that 18 more companies have signed up to offer Gradifi’s Student Loan Paydown Plan.