Preparing for student loan repayments with Highway Benefits
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What
Highway Benefits is a CA-based employee benefits platform offering student loan repayment and tuition reimbursement solutions for employers, as well as a refinancing market for employees.
Founded in 2020, Highway Benefits has raised more than $6 million in venture funding, including a $3.1 million Seed round in March 2023, which saw participation from XYZ Venture Capital and Roger Ferguson.
Why
According to Mick MacLaverty, Co-Founder & CEO of Highway Benefits, student loan repayment as a benefit is an effective and efficient piece of compensation that creates multiple stakeholders. Employees can receive up to $5,250 in payments tax-free for addressing their largest personal debt; for employers, this benefit is a better dollar spent than a salary dollar or bonus dollar.
Landmark regulatory changes have made Highway Benefits useful but also necessary, MacLaverty elaborated. The debt ceiling agreement, notably, stated that loans would resume for the first time in three years. In addition, the Supreme Court struck down the Biden Administration’s plan to partially cancel student loan debt.
“Both of these two macro events have turned the conversations we’ve been having with companies [into action],” MacLaverty said.
How
Highway Benefits has attempted to address the needs of the suite of stakeholders affected by this major regulatory shift. In part, this involves giving employees the tools they need to make their employers offer student loan repayment as a benefit.
“We’re in a unique position, not just within our industry, but within B2B, to use B2C tactics to engage with B2B,” MacLaverty said. These efforts include a toolkit for employees, as well as extensive work on social media to help employees with student loan debt understand the existence and implications of this benefit.
Highway Benefits is also able to onboard its clients outside their open enrollment period. This is especially important at present, given that student loan repayments resume on October 1. Nevertheless, most companies take a more methodical approach to benefit-related decisions; Highway Benefits can help employers carry out anonymized employee surveys to gauge the financial health, debt, and needs of workers. From there, Highway Benefits can tailor the kinds of solutions it offers to employers.
“A lot of companies are astounded by the amount of employees that say a student loan benefit would be very desired,” MacLaverty said.
Highway Benefits’ refinancing marketplace is a core component of its efforts to address student loan debt. At the same time, keeping the marketplace running—as well as its repayment platform in general—requires ongoing understanding of the lending landscape.
Getting data from loan servicers requires regular interfacing as well as adjusting to sudden shifts, such as when lenders altogether drop out of servicing student loans, or when servicers sell their business to another provider. “It’s not at all insignificant in terms of effort and skill that it takes to get that right,” MacLaverty noted.
Ultimately, Highway Benefits sees its efforts as part of a larger sector-wide mission. “In order to make a dent in this problem, not only does Highway have to succeed, but our competitors have to succeed, and student loan companies have to succeed,” MacLaverty said. “All these solutions have to work in order to chip away at the problem.”
