Companies have to get smarter about employee benefits if they want to attract the best talent in 2022.
That might bring to mind concepts like flexible work hours, gym memberships, or competitive retirement matching plans. But a team of Nashville-based entrepreneurs thinks it is time to add education payment options to the mix.
SavvyFi’s platform is doing just that by giving employers the tools they need to help employees pay off student debt faster or save for college earlier. Without the need for payroll integration, SavvyFi helps HR teams easily add student loan repayment or saving options as part of a benefit package that can better attract and retain talent.
It also helps employees think more holistically about their finances, says founder Jeffrey Hull.
“We set out to say that we could do finances the right way,” he told Hypepotamus. “When you look at the [student loan] problem holistically, you have to ask things like: How can we get people to start saving? How can we get creative about the way that they save? How can you get them to be thoughtful about where they plan to go to get their education? And if they wind up taking on debt, let’s get a good solution to pay it off and to manage it.”
THE CHANGING LANDSCAPE OF EMPLOYEE BENEFITS
As companies compete for talent, the onus ultimately falls on HR and executive teams to ‘sweeten the pot’ for current and potential employees.
529s, prepaid college savings accounts, have been around since the 1980s to help people save for their kid’s college tuition. But setting up such an account requires consumers to shop around and do a good amount of research.
For graduates, the burden of student loans has changed the calculus on how many young professionals plan out their financial future.
Recent federal regulation changes have worked to help with that burden. The Biden administration made headlines this summer with a plan to forgive a certain amount of debt. And now through 2025, employers can offer employees up to $5,250 annually in student loan repayment benefits tax-free.
Yet education-related benefits are still not widely adopted across American companies. A survey by the Employee Benefit Research Institute suggests that only 17% of employers currently offer student loan debt assistance.
SavvyFi believes working on both saving and repayment options can help both employees and employers.
“We are addressing student debt for every single generation in the workplace,” added Hull. “If you have debt and you want to get rid of it, we have a tool for you. If you have a loved one that you want to protect from debt in the future, we have tools for you.”
SavvyFi is currently targeting companies with under 1,000 employees with plans to expand through strategic partnerships with financial brands and benefits brokers.
Getting Smart About SavvyFi
Last week, the company closed a $4.9M Series A as it looks to scale up. The funding round was led by Aligned Partners, a Silicon Valley-based venture capital firm.
Susan Mason, Co-founder of Aligned Partners, said that the team was attracted to SavvyFi because it “fills a critical gap in the marketplace for better tools to alleviate the burden of college savings and student loan repayment.”
Hull said the team is growing from its core in Nashville with an increasingly remote workforce.
The platform is wasting no time getting to work following the funding announcement. SavvyFi is moving into its “busy season,” added Hull, since 70% of employee benefits decisions are finalized and implemented during Q4.