SAN FRANCISCO, March 29, 2016 /PRNewswire/ -- SoFi, a modern finance company taking an unprecedented approach to lending and wealth management, announced today it has funded more than $1 billion in student loan refinancing to borrowers entirely through corporate and association partnerships. More than 400 partners, from the Fortune 10 and fastest-growing startups to top professional services firms, banks and membership groups, are helping employees pay down their student debt with SoFi. SoFi also announced today that it is joining these companies in adopting student loan assistance as a employee benefit; the company will now contribute $200 per month to help repay the student loan debt of its own eligible employees.
As one facet of its radical approach to financial services, SoFi is helping these companies lead a shift in employee benefits that reflects the current needs of early-stage professionals. These workers are more concerned with their student debt than they are with saving for retirement, and SoFi saves borrowers $18,000, on average, over the lifetime of their loans. That savings can enable employees to participate in other important voluntary benefits like 401(k) plans and health care savings accounts that they are otherwise forsaking.
A significant percentage of SoFi's more than 130,000 members are introduced to the company via these partnerships, who range in size from 200 to 200,000+ employees. Participants include Microsoft; Skadden; Workday; Akin Gump; Weil Gotshal; Orrick, Herrington & Sutcliffe and hundreds of others. SoFi offers two employer options, both at zero cost to the employer:
- Employer Contribution Model: administered by SoFi, companies can contribute a regular amount (e.g., $100/month) to their employees' existing student loans. For those employees SoFi can't underwrite, SoFi will still administer the employer contribution for their existing loans.
- Classic Partner Model: an entirely free program to employers and associations who offer SoFi as a benefit to their workers and members, generally with a special welcome bonus or other sign-on incentive.
"Student debt has reached crisis proportions in this country, and borrowers – especially Millennials – are struggling to repay their loans and put aside even the smallest amount for their future," said Catesby Perrin, Head of Business Development at SoFi. "So it makes sense that we're seeing a lot of excitement about the benefit. It's truly the hottest employee benefit since the 401(k), and it signals to employees that their companies are invested in their success and addressing the most pressing financial concerns they have right now, not just forty years down the line. Beyond the excitement from borrowers themselves, the positive feedback we've received from companies is overwhelming. They see that helping to ease the burden of student loans is an especially meaningful and differentiating benefit to both current and prospective employees," said Perrin.
The SoFi milestone comes on the heels of news that legislators are also working to make it easier and more appealing for employers to help workers pay down debt. The Employer Participation in Student Loan Assistance Act (also known as H.R. 3861) was recently introduced in the House with bipartisan co-sponsorship, and the Employer Participation in Repayment Act was introduced concurrently in Senate. The bills would revise tax law to prevent workers from getting taxed on employer-sponsored student loan repayment plans.
These efforts aren't surprising, given that more than 70 percent of employees reporting they're stressed about money. And, according to a survey of more than 5,000 job seekers by job search and application site Beyond, nearly 90% of of those with debt said they think companies should offer student loan repayment as part of their benefits package. The benefit is a natural fit for leading companies looking to strengthen recruitment, reduce turnover and increase employee satisfaction.
SoFi's nontraditional underwriting approach considers an individual's financial well-being to determine creditworthiness, with factors such as employment history and free cash flow. SoFi also offers borrowers benefits that can't be found elsewhere, such as unemployment protection, an entrepreneurship program, career counseling and member events.
SoFi is a modern finance company taking an unprecedented approach to lending and wealth management. We've replaced the impersonal, transactional bank experience with a long-term partnership, enabling our members to realize the full potential of their money, careers and relationships. Our members constantly push the limits of what life has to offer. Whether looking to refinance their student loans, buy their dream home, or simply seek advice as they ascend in their careers, SoFi provides the products and tools to match their ambitions and propel them to new levels of financial greatness. For more information, visit SoFi.com and check out these fast facts.
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