Preparing for Student Loan Payment Restart: A Guide for Benefits Providers

On October 1st, 2023, 43 million Americans will have to start paying down their student loans for the first time in over three years. According to the New York Times, more companies than ever before are offering student loan assistance as a benefit to their employees. For benefits providers, there’s a lot you can do to help your customers and their employees get prepared for the restart. 

What your customers need to know

Recent legislation, the CARES Act and Secure 2.0, enables employers to financially support their employees with federal student loans. The CARES Act allows employers to make contributions, tax-free on both sides, toward an employee’s student loans up to $5,250 per year. 

Secure 2.0 allows employers to offer matching 401(k) contributions to employees who don’t have the means to put money into their retirement account because they are paying so much toward their student loans. In order to be eligible for this match, employees must be making qualified payments to their federal student loans. 

These are amazing benefits to be able to offer to employees, but the process for verifying that an employee’s loans are eligible is tedious and cumbersome. Not only does the employee need to provide lengthy, manual data about their loan in order for you to verify their eligibility, but they will also need to provide monthly updated statements to ensure they are still eligible. 

Fortunately, Spinwheel can seamlessly verify eligibility behind the scenes for you. Our API covers 99%+ of student loan connections in order to provide you with the exact data you need in real time. You’ll have access to key indicators like eligible payments, outstanding balances, loan types, and repayment plans in order to ensure the employee is eligible for your program. You’ll also be able to verify that the employee’s student loan accounts are open for payment and make payments directly into their account. If you’d like to learn more Spinwheel, sign up for a demo here.

Action items for borrowers 

Over the past three years of the payment pause, there have been countless servicer migrations. This means many users have been unenrolled from auto-debit and had their loans disconnected from apps/services. 

Here’s a list of 5 specific steps your customers will want to pass along to their employees.

Spinwheel powers all five of these steps in your existing app or interface, making it super simple for employees to get back on track.

For Providers Already Using Spinwheel

If you’re already using Spinwheel, the most important step is getting employees to connect their student loans to Spinwheel. Once connected, you’ll have access to all the necessary data to make eligible payments. 

We’re created a few resources that will make it easy to communicate all of this information to your customers. Use this sample email template to inform your customers about the upcoming changes and encourage their employees to connect their loans. This comprehensive FAQs document will address any questions the employee may have. 

If you’re not using Spinwheel yet 

If you’re not already using Spinwheel, it’s really easy to get started. Within a few hours, you can integrate and start testing so that you can offer student loan benefits to your customers before October 1st. 

Spinwheel offers a comprehensive developer portal where you can quickly test and integrate, drop-in modules that make it easy for you to create end user experiences, and a wonderful partner success team ready to make sure your program is as successful as possible. 

Here’s an example of how one of our partners, Betterment, has created a Student Loan Management portal within their existing interface, powered by Spinwheel. 

We’d love to help you get started! Click here to schedule a demo with our team or get APIs to start testing right away. 

Staying Up To Date

Borrowers may also be eligible for lower monthly payments with the new SAVE repayment plan. Legislation regarding student loans is rapidly evolving so borrowers should check studentaid.gov for the most up-to-date information. They can also subscribe to emails specifically tailored to Federal Loan Borrowers at https://www.ed.gov/subscriptions.