E-Trade has acquired student loan benefits provider Gradifi in a $30 million deal that enhances the company’s financial wellness product offerings.
Student loan debt has reached $1.6 trillion in 2019, according to the Federal Reserve. About one-third of adults under the age of 30 and one in five adults age 30 to 44 say they have student loan debt, according to Pew Research Center. Despite the prevalence of student loan debt in the U.S., only 8% of employers offer a repayment benefit, according to the Society for Human Resource Management, that figure doubled since 2018.
“When we look at the Gradifi deal, it enables us to expand our leadership position in employee benefits beyond stock plan administration and more into financial wellness,” says Craig Rubino, vice president of E-Trade Financial Corporate Services. “The specific focus is on tackling the challenges of student debt and saving for education.”
Gradifi takes on the challenges of student loan debt by offering a suite of financial wellness solutions, including employer-sponsored student loan paydown, 529 plan contribution solutions, access to student loan refinance options, loan counseling, educational resources and digital financial planning tools.
“Student loans are the fastest growing form of consumer debt — there’s a huge need for this,” Rubino says. “This is a growing benefit and one that is tied to attraction and retention of talent for the corporate clients that we work with.”
Gradifi’s services will be immediately available to E-Trade’s clients and will eventually be rolled out to E-Trade employees.
Employers are becoming more aware of the impact of student loan debt.
“Tackling student debt is vital today if we hope to set employees up for long-term financial success,” Scott Whatley, president of E-Trade Corporate Services, said in a statement announcing the deal. “We play a significant role in helping employers meet the financial needs of their participants, and innovative offerings like Gradifi help us deliver even more firepower to plan sponsors.”
