Employee benefits platform Highway Benefits announced it has raised $3.1 million in seed funding.
The company, founded in 2021, provides help to plan sponsors wanting to offer student loan repayment benefits to their workers by allowing employers to make tax-free contributions to employee student loans through the Highway Benefits platform.
With the platform, employers can create and manage customizable contribution and eligibility rules, while Highway’s automated system ensures tax compliance and verifies benefit eligibility and qualified loans for participating employees. The company also allows employees to connect their student loans through integrations with all loan servicers. The platform’s pricing ensures employers only pay for employees who have enrolled and are actively receiving contributions each month.
“Student loan repayment as an employer benefit is the single best dollar-for-dollar benefit since the introduction of the 401(k), with 86% of borrowers saying they’d commit to a company for five years if it helped them pay off their loans,” said Highway Benefits Co-Founder Cory Micheel, in a statement. “It’s a fantastic way for companies to attract and retain top talent while also differentiating themselves from competitors in hiring. Unfortunately, less than 10% of companies today offer this benefit because many either don’t realize that these contributions are now tax free or don’t recognize how much their employees value it.”
While we won’t know the Supreme Court’s decision on President Biden’s student loan forgiveness program for the next few months, Mick MacLaverty, co-founder and CEO of the company, forecasts repayments will start up again in 2023.
“Borrowers are wholly unprepared for this looming liability – 89% admitted to this in a recent survey and 27% said that one-third of their income will go towards loan repayment – but employers can play a critical role in the financial wellness of their employees,” said MacLaverty.
Biden’s forgiveness program is up in the air for the following months, or at most until the end of June. The Supreme Court heard arguments Tuesday on whether the administration has the authority to cancel federal student loans under the HEROES Act of 2003.
Over 26 million people have applied for debt forgiveness since Biden announced his program last August, with 16 million having been approved since. Due to court rulings, the relief is currently on hold. In November, the Department of Education (DOE) paused applications due to legal challenges concerning the plan.
President Biden extended his pause on student loan payments for the sixth time since the beginning of his presidency, and the ninth time since it was initially halted by former President Donald Trump during the onset of the COVID-19 pandemic in 2020.
Payments will resume 60 days following a verdict by the Supreme Court. If a decision is not made before the June 30 deadline, payments will resume 60 days after, in September 2023.
SEE ALSO:
- Supreme Court Hears Arguments on Biden’s Student Loan Forgiveness Plan
- Tackling Student Loan Debt Relief Issues with Candidly’s Laurel Taylor
- Biden Administration Extends Pause on Student Loans Payments Until June
Amanda Umpierrez is the Managing Editor of 401(k) Specialist magazine. She is a financial services reporter with over six years of experience and a passion for telling stories and reporting news. Amanda received her degree in journalism and government and politics at St. John’s University. She is originally from Queens, New York, but now resides in Denver, Colorado with her partner. In her free time, Amanda enjoys running, cooking, and watching the latest drama show.
