Betterment launches student loan and 529 college savings programs

Betterment, the digital investment advisor, debuts two new features to help customers with the cost of higher education – a burgeoning economic dilemma – whether it’s paying off student loans or setting up 529 college savings funds.

The Student Loan Management Program can be offered by employers with the Betterment at Work 401(k) package and gives employees personalized recommendations for balances to reduce first, repayment projections and follow-up services for matching employers. The program is partnered with Spinwheel, a tech infrastructure startup that creates embedded modules with debt data, which can be embedded into many popular apps.

On the other side, Betterment’s new 529 program makes it smart for customers to save for college. Also offered as part of the workplace enhancement 401(k), it advises employees to invest their pre-tax dollars in college funds over time, whether for themselves or their children. . This solution stems from Betterment’s acquisition of Gradvisor, an education savings advisor.

Both reinforce Betterment’s quest for personalization, as passive investors demand more personalized options for their money in today’s era of Robinhood traders. Such solutions broaden the company’s appeal to customers with different needs at different stages of life, from recent graduates to mid-career workers with families, to those approaching retirement.

In another recent initiative to meet the needs of the moment, Betterment unveiled in early February it will offer cryptocurrency wallets through its acquisition of crypto investment adviser Makara. “It definitely matures into an alternative like gold or precious metals,” Dan Egan, director of behavioral finance and investing at Betterment, said of Bitcoin in a segment on CNBC. “You should have a small portion of it in your portfolio just for the sake of diversification.”

But Betterment’s debt program looks even more urgent: It comes amid political debate over what some see as a looming student loan crisis, with the nation’s collective student debt standing at around 1.5 trillion dollars. This number represents an increase of nearly 150% over the past 15 years. As many of the country’s estimated 45 million borrowers have struggled to repay seemingly insurmountable debt burdens during the COVID pandemic, fears are growing that this is the next bubble about to burst. And on Capitol Hill, lawmakers are already speculating that debt relief could become a key issue in the 2024 presidential election.

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