Forward Focus

Insights for our times

Roger W. Ferguson, Jr., President and CEO of TIAA, reflects on leadership lessons learned in earlier crises, considerations for navigating our current challenging times—and what to think about as we look toward the future.

Forward Focus: Solving the student debt crisis

Episode 7

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Forward Focus Episode 7 – Solving the student debt crisis

Hi – I’m Roger Ferguson, President and CEO of TIAA. We recently polled nonprofit workers with student debt and learned that the vast majority are finding it overwhelming. This is important because these are the people who are putting their lives at risk, taking care of the sick or keeping our schools open. And at the same time, they’re dealing with financial uncertainty.

The numbers are staggering. Among the 600 nonprofits workers we surveyed, nearly 3 out 5 – 58% - reported having more than $50,000 in debt. It’s a source of stress and emotional challenge for nearly two-thirds – 61% - of those with student loans.

In many cases, it’s blocking them from taking steps toward a better financial future. If they can save some and get some relief, nearly 70% said they would buy a home, contribute to retirement or save for a child’s college education.

The Public Service Loan Forgiveness program can grant loan forgiveness to certain borrowers who make 120 qualifying monthly payments. However, staying compliant in today’s challenging economic climate can be difficult. More than 2/3s – 69% - of the nonprofit workers we surveyed, for example, have seen their household income drop during this pandemic.

TIAA is working with a number of nonprofit employers to offer their employees a student debt solution. The program is a collaboration between TIAA and the social impact start up called Savi, that’s designed to help nonprofit workers immediately reduce their monthly student loan payments.

This could be a crucial step because lowering that bill can help nonprofit workers stay compliant with their payments and also work towards their goal of achieving loan forgiveness down the road.

Let me give you an example – at Temple Health, employees are expected to save an average of $222 a month in payments and over $51,000 each on forgiveness. With student debt out of the way, nonprofit workers can focus on improving their financial wellness by saving for an emergency or other important goals.

DISCLOSURES: 2020 Nonprofit Student Debt Survey by TIAA, November 2020

Savi and TIAA are independent entities. A portion of any fee charged by Savi may be shared with TIAA to offset marketing costs for the program. In addition, TIAA has a minority ownership interest in Savi. TIAA makes no representations regarding the accuracy or completeness of any information provided by Savi. TIAA does not provide tax or legal advice. Please contact your personal tax or legal adviser.

This material is for informational or educational purposes only and does not constitute fiduciary investment advice under ERISA, a securities recommendation under all securities laws, or an insurance product recommendation under state insurance laws or regulations. This material does not take into account any specific objectives or circumstances of any particular investor, or suggest any specific course of action. Investment decisions should be made based on the investor’s own objectives and circumstances.

We strongly recommend that you consult with a financial, tax, or legal advisor before taking any action based on an opinion or other information you obtain from this video series so that all of your personal circumstances can be taken into consideration. The TIAA group of companies does not provide legal or tax advice. Certain products and services may not be available to all entities or persons.

The views expressed in this material may change in response to changing economic and market conditions. Past performance is not indicative of future returns.

Investment, insurance and annuity products are not FDIC insured, are not bank guaranteed, are not deposits, are not insured by any federal government agency, are not a condition to any banking service or activity, and may lose value.

TIAA-CREF Individual & Institutional Services, LLC, Member FINRA, distributes securities products.

©2020 Teachers Insurance and Annuity Association of America-College Retirement Equities Fund, 730 Third Avenue, New York, NY 10017

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This material is for informational or educational purposes only and does not constitute fiduciary investment advice under ERISA, a securities recommendation under all securities laws, or an insurance product recommendation under state insurance laws or regulations. This material does not take into account any specific objectives or circumstances of any particular investor, or suggest any specific course of action. Investment decisions should be made based on the investor’s own objectives and circumstances.

We strongly recommend that you consult with a financial, tax, or legal advisor before taking any action based on an opinion or other information you obtain from this video series so that all of your personal circumstances can be taken into consideration. The TIAA group of companies does not provide legal or tax advice. Certain products and services may not be available to all entities or persons.

The views expressed in this material may change in response to changing economic and market conditions. Past performance is not indicative of future returns.
 
Any guarantees under annuities issued by TIAA are subject to TIAA’s claims-paying ability.
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