SoFi is entering the employee benefit space in its latest bid to lay siege to the US’ colossal student debt market. The new benefit programme – entitled SoFi at Work – is comprised of two core products. The first is a student loan contribution, administered by SoFi, but paid for by employers as a regular contribution towards paying off student debt. The second is SoFi’s standard student loan refinancing solution, which partner companies make freely available to employees.
The 600 participating companies include seven of the top 10 tech firms in the Fortune 500, 58 of the Vault Law top 100 law firms and 11 of the 2017 Vault Banking 50. Recent additions include Meredith Corporation and Northrop Grumman.
"When it comes to employee benefits, we believe student loan help is the next 401(k)," said Mike Cagney (pictured above), CEO, chairman & co-founder at SoFi."This is especially true for the Millennial generation, now the largest percentage of the workforce, who are starting their careers with record-setting student loan debt and deferring important priorities like retirement savings or buying their first home."
SoFi is not the first student lending platform to take on the employee benefit market. Rival lender CommonBond acquired personal finance platform Gradible in July with the express purpose of breaking into the 401(k) student loan market. CommonBond CEO David Klein at the time touted this as a major growth area for the company. While only 4 per cent of companies in the US at that time were contributing to paying off student debts for their employees, that figure has been projected to grow to over 26 per cent by a Willis Towers Watson survey – a growing market that both SoFi and CommonBond will jostle for a part in.