The Perks of Employee Loan Repayment: Akhil Nigam Explains Why Fidelity Helps Their Employees Pay Back Student Loans
This episode is part of the EdTech Times series called Challenges and Solutions for Student Financial Aid and Debt.
For decades, parents have been scrambling to help save for their children’s college education, often starting before said children are even born. But as more organizations address student debt, parents today are presented with more options than simply stockpiling for college.
Earlier in this series, we interviewed students and graduates about student loan debt. Ron, a parent that we interviewed, even suggested that his daughter should look for an employer to pay back her student loans.
“We’re going to help them pay of the debt, a little bit,” said Ron, “And then one of the other things I’ve trained her on is that she may have a job offer from one or two companies, and ask them if they would help pay for any of the debt.”
The idea of an employer paying off his daughter’s loans might sound like wishful thinking. But as more college graduates graduate with significant loan debt and make employment decisions around that factor, more employers are offering loan repayment programs in their benefits packages.
One of the companies offering such programs today is Fidelity, a financial investment firm headquartered right here in Boston, Massachusetts.
To learn more about Fidelity’s loan repayment program for employees, we interviewed Akhil Nigam, Managing Director of Fidelity Labs. Listen in to the podcast episode above, or read the interview transcript below, to learn about how Fidelity is helping their employees with student loans.
HESTER: This is Hester Tinti-Kane with EdTech Times. This episode is part of the EdTech Times series called Challenges and Solutions for Student Financial Aid and Debt.
HESTER: Today we’re speaking with Akhil Nigam, managing director of Fidelity Labs and the Fidelity Center of Applied Technology.
HESTER: Our topic is student financial aid and debt. Akhil, could you start off by introducing yourself and telling us a little bit about Fidelity Labs and FCAT?
AKHIL: First of all, thank you for having me here. We are an organization within Fidelity which is charged with thinking about the next generation of products, as well as business ideas for the forums. So what you can think about this is an innovation unit within Fidelity itself. Whereas the core business is very focused on today, and how do we serve our customers today, we look at a few years down the road, like three to five years down the road, and see what’s coming in terms of technologies, in terms of business problems, and in terms of how we can be serving our clients better in different areas.
HESTER: So tell us just a little bit about how long this part of Fidelity’s been around.
AKHIL: Yeah, absolutely. I mean this has been around for more than about 10 to 15 years. So it was actually started by our chairman, Ben Johnson, who was very focused on new emerging technologies. So I think the first focus of FCAT or Fidelity Labs was to think about new emerging technologies, that could potentially serve our customers better, or possibly disrupt the core businesses as well. But as we have evolved we have also…it’s not just about technology it’s also about new products, new services, as well as new businesses that we can create within Fidelity itself.
HESTER: Great. So, can you tell us a little bit about your personal background, and how you ended up in this role?
AKHIL: So before this I was the founder and president of Mass Challenge. I started Mass Challenge in 2009 and ran it for about six years across the US. After I left Mass Challenge—I’m still on the board there, but I’m not running it on a day to day basis—I was just figuring out what to do next. And I knew people at Fidelity, and when I came here, I looked at all the exciting ideas that were being incubated here, and really fell in love with both the firm as well as the vision of Fidelity Labs, as well as what they were incubating here.
HESTER: That’s great. So you represented Fidelity in a working group on student debt, started by the Boston Chamber of Commerce. Can you tell us a little bit about that experience?
AKHIL: So as most of the people know, student loans has become a big issue in our nation. So 1.4 trillion dollars of debt makes it the second largest consumer debt category in the country, only behind home mortgages, but more than credit cards more than auto loans, currently affecting 44 million Americans. That number seemed to be rising at a pretty fast rate, mainly because the cost of education keeps going up, and more and more people are using student loans to finance their education.
AKHIL: Let me just talk about why Fidelity got interested in this. So we got interested in this because the noise around student loans kept getting stronger and stronger, both from our clients, as well as our own employees, about how this is becoming a big issue in their life. Right. And I can talk more about the Fidelity story a little bit later on in the podcast. But…but the key thing is we started looking at that and I think the Boston Chamber of Commerce as well as the attorney general also started looking at this from the same lense in the sense that this is becoming a big issue in a lot of constituents. Whether you’re talking about employees whether you’re talking about clients across different areas.
AKHIL: And so it was a great effort, both by the Chamber of Commerce, as well as the attorney general’s office, to bring a diverse set of people who are looking at the same issue from different angles, but might not actually meet each other, or discuss ideas across a common forum that they provided.
AKHIL: And they were kind of like the catalyst or the instigator to bring this group together and task us with looking at this problem from a multi-dimensional angle. So, not just thinking about it from my employer point of view, not just thinking about it from a educational institution point of view, but from every different angle that we can think about. Get those opinions on the table. But more importantly, I think we as a state can do something about it, and lead the nation in thinking about how we can tackle this issue of student loans across the US. And I mean given the fact that Massachusetts itself has led it on a number of issues, whether that’s health care, whether it’s other kinds of issues that we have been a leader in, I think the goal there is to say that, can we lead the nation in thinking differently about these student loans?
HESTER: Great. And from a personal experience, what was it like to be connecting with the attorney general’s office and other employers and things in the Boston area.
AKHIL: Yeah I think it was fabulous in the sense that—first of all, I mean if you think about this the number of education institutions just in the state is amazing. Right. So we are a big education state in terms of the number of people coming from all over the world into these educational institutions. But given that there are so many parties and so many different representations around this issue of education—and it was really really great to, first of all, get to meet a lot of the different constituents—what challenges are they facing? And to look at the different perspective of student loans from…from different angles and how people think about it, how people are tackling it, and really it gave us a good opportunity to collaborate with some of those people to at least discuss ideas and recommendations about how we can work together to form solutions as opposed to building solutions in our little silos.
HESTER: That’s a really exciting opportunity. Let’s focus back on your role here at Fidelity. You told me a little bit about how you are reshaping the benefits program here for the next generation of employees. So, can you share a little bit about that, and some of the details?
AKHIL: Yeah, absolutely. So there are two things—so one is the fact that, I’ll…I’ll talk it in two different dimensions. Right. Which is what we are doing internally for our own employees. And the second thing is some things that we are releasing for our clients across the US.
AKHIL: So for our own employees, we understood that student loans is a big issue with our own employees, and we hear it time and time again across the US, and we will always like to be on the forefront of benefits. And we really want people, when they think about Fidelity, as being thinking about the best place to work, not just as far as part of the career, but throughout their whole career across that.
AKHIL: So if you look at our suite of benefits, we definitely want to be at the very cutting edge of these benefits, and making sure that every segment of our workforce population is being catered to.
AKHIL: So some of our senior executive team felt, when they went around to our different locations, they heard more about the student loan issue, how this was affecting some of our younger workforce. Right. And they tasked our H.R. people to really think about what can be done about the student loan issue. So about a year ago—and this has been in the works for about two years, but we implemented about a year ago—we decided to launch what is called a step ahead program, where we said that we are actually going to be contributing directly to our employee student loans.
AKHIL: So our benefit is that we paid $2,000 a year, and that is paid monthly. About a hundred and sixty seven dollars. With a lifetime cap of about $10,000.
AKHIL: So this is actually making a direct impact on people’s student loans as an employer. We want to indicate that we understand that this is a big issue, and we want to play our part in alleviating this problem.
AKHIL: And also if we can help them with the student loan issue, our own employees, what we are also hoping is they will take good long-term economic decisions, like using some of that money to save for retirement, and other important priorities in their life. And ever since that, we released this, this has become one of our most popular benefits, and its been very, very well received. And what I would say is that we were one of the earliest adopters in the industry of this benefit itself and it has had a huge impact on the people that have signed up for the program intimately.
HESTER: So how many employees do you have at Fidelity?
AKHIL: So overall between both our full-time as well as our part-time workforce I think the number is somewhere directionally around 50,000. Don’t quote the exact number.
AKHIL: But like directionally.
HESTER: And you’re saying this is one of the most popular benefits. Do you have any idea what percentage of your employee population has opted into this.
AKHIL: Yes. I mean so the thing is we have some eligibility criteria for this based on that eligibility criteria. I think the uptake rate of whoever is eligible for this took this benefit. So the uptake rate has been close over 95 to 100 percent across that rate and it has really also helped us in recruitment and retention also.
AKHIL: I’ll give you some examples of even people in my team. They were not full time, they were contractors and they were on the fence whether they should join full time or not. And when Fidelity introduced this benefit they actually converted to full time. We had been trying to recruit them for a while. So just because of this benefit, a lot more people have decided to join fidelity.
HESTER: That’s great. We’ve talked about a lot of different things and it sounds like you’ve done some really rich work in this area so I wanted to say thank you for sharing everything that you’ve shared your work with Fidelity Insaf your work with the working group sounds super exciting. Is there anything else you wanted to mention today?
AKHIL: Absolutely so. So the thing is, I think one thing that I failed to mention is the fact that I addressed in our own internal employees, but for our clients also we understand that this is a big issue. So what we are launching is a Fidelity student debt tool that can help those who have student debt and now have to repay back get a better control of their debt not fuel or well. Look at the different choices that they have based on their own numbers and their own goals and life situations and figure out what is the best path forward. Because we really want to help people to have the right information and make the right choices. As far as student debt is concerned.
HESTER: That’s great.
HESTER: So is there a name of the tool, or somewhere if people want to learn more about it, that they could go.
AKHIL: That’s right. So you can either look at it either on our Fidelity Web site or or what you can also do is just Google for that Fidelity student debt tool and they will be able to get to it.
HESTER: Great. Well thank you Akhil, so much for your time today.
AKHIL: Thank you very much. It was a pleasure.
This podcast episode is sponsored by Inversant, a Boston-based nonprofit that helps lower- to middle-income families plan and save for college.
If you would like to donate to Inversant,visit Inversant.org/donate.
To learn more about how Inversant can help you prepare for your child’s future, visit inversant.org/educationlibrary.
Listen to the full series, “Challenges and Solutions for Student Financial Aid & Debt.”
Hannah Nyren is the General Manager of EdTech Times. A Texan by birth but a Bostonian at heart, Hannah is an educational writer, AmeriCorps alum, and one-time StartupWeekend EDU (SWEDU) winning team member. She started her career at a Pearson-incubated edtech startup, but has since covered travel, food & culture, and even stonemasonry in addition to education.