NEW YORK, November 9, 2021 / PRNewswire / – According to TIAA Nonprofit Student Debt Survey 2021.
The vast majority (95%) of public sector and nonprofit employees surveyed who have benefited from the CARES Act say they will have at least some difficulty in dealing with student loan debt repayments once the program dies. relief completed, two in five (40%) saying they will have “a lot” of difficulty keeping up with payments. Almost half (45%) say it would have been “very difficult” or “impossible” to pay off their student loan debt without the relief from the CARES Act in the past 18 months.
“Almost two-thirds of workers in the public and non-profit sector say their incomes are lower today than they were at the start of the pandemic,” said Snezana Zlatar, Head of Financial Well-Being, Consulting and Innovation at TIAA. “With the upcoming restart of student loan payments, these workers need tools and resources that can help them feel more confident about their finances and achieve their goals. ”
More than a third of these workers (36%) say they will not be able to make their payments from their take-home pay or savings. Eleven percent say they will have to look to their friends and family for financial help. Another 11% say they will reduce or stop their contributions to the pension plan. Ten percent will have to request an additional abstention. The remaining 4% say they have no idea where the money will come from.
Not surprisingly, student debt is a major source of negative emotions. Just over half of these workers (55%) are still worried about their student debt. Three in ten have only negative feelings about their student loans (31%).
For help, employees turn to their employers as changes to the Public Service Loan forgiveness program (PSLF) create confusion.
The new TIAA Student Debt Survey found that three in five respondents (60%) believe their employer has a responsibility to help them with their student debt.
Employers have the opportunity to provide timely and meaningful assistance, as the federal PSLF program has now become eligible for more people. Confusion also exists, as there have been continuous changes in the student debt service market. The survey results underscore the need for all borrowers to have access to resources to better understand their current student loans and potential avenues for relief.
The innovative TIAA program launched in 2020 at nonprofit education, health and research institutions across the country is one example. TIAA works with a social impact startup Savi to help nonprofit workers successfully obtain student loan forgiveness through the PSLF program. The solution acts as a janitor, helping the individual stay in compliance with recurring and new administrative requirements of the PSLF program while reducing errors.
“Expanded eligibility for the PSLF has the potential to have a life-changing impact for borrowers,” said Lindsay clark, Director of External Affairs at Savi. “For many borrowers, even if they are not entirely eligible for immediate forgiveness, they will become considerably closer to obtaining forgiveness.”
Under new federal policies, this solution helps borrowers determine if they qualify for retroactive credit for student loan payments made before enrolling in an income-based repayment plan.
TIAA and Savi have helped individuals secure $ 200 million forgiveness planned since the deployment of the program in mid-2020. TIAA participants using Savi save on average $ 1,880 per year in student loan payments and on average an expected remission of more than $ 51,300 per person.1
A previous TIAA survey found that nearly 70% of these workers said they would use their savings to buy a home, contribute to their retirement, or save for a child’s college education.
For more information on how to help your employees cope with their student loan debt, visit tiaa.org/savi.
Methodology of the study
The 2021 TIAA Nonprofit Student Debt Survey was conducted by KRC Research from August 20 to September 9, 2021, via an online survey of 810 Americans aged 21 to 64 who have at least a bachelor’s degree, are employed and currently work for a nonprofit or government entity, and have student loan debt. Additional results are available here.
TIAA is a leading provider of secure pensions and results-driven investment solutions to millions of people and thousands of institutions. It is the leading provider of the non-profit retirement market,2 paid more than $ 3.6 billion to retired clients in 2020 and $ 1.3 trillion in assets under management (at 06/30/2021).3
Savi is a social impact technology startup in Washington DC work to resolve the student debt crisis affecting 46 million borrowers by helping them discover new loan repayment and cancellation options. Founded by longtime student loan experts and advocates, Savi is a public benefit corporation that works with employers, member organizations, and financial institutions to provide our service as a one-stop student loan benefit.
This material is for informational or educational purposes only and does not constitute fiduciary investment advice under ERISA, a recommendation of securities under any securities laws or a product recommendation. insurance under national insurance laws or regulations. This document does not take into account the specific objectives or circumstances of any particular investor and does not suggest any specific course of action. Investment decisions should be made on the basis of the investor’s own objectives and circumstances.
TIAA-CREF Individual & Institutional Services, LLC, member of FINRA, distributes securities products. Annuity contracts and certificates are issued by Teachers Insurance and Annuity Association of America (TIAA) and College Retirement Equities Fund (CREF), New York, New York State. Everyone is solely responsible for their own financial situation and their contractual obligations.
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1 The results obtained may not be typical of all participants.
2 Based on data from 56 providers in the DC Recordkeeping Survey 2019 from PLANSPONSOR magazine, combined data 457, 403 (b) and defined contribution plans as of December 31, 2018.
3 Based on approximately $ 1.3 trillion in assets under management in Nuveen affiliates and TIAA investment management teams as of 6/30/2021.