Recent surveys have shown that 529 college-savings plans are one of the least-used options for financing a child’s higher education because parents said they don’t know much about them, but Social Finance Inc.’s newest offering could change that.
The San Francisco-based online lender and personal finance site has enhanced its “SoFi at Work” program with the addition of 529 contributions, which include automated payroll deduction and employer contribution capabilities, according to a company release.
It also plans to provide an investment tool that will provide employees with 529 college savings plans that best fit their individual financial situation.
SoFi said the “forthcoming 529 selection tool” will enable employees to input basic information about their expected college costs and household financial status and then receive a personalized recommendation for two college savings plans.
Employees also will be able to link their existing 529 plans with SoFi's portal and make contributions from their paychecks via payroll integration with their employer's payroll provider. Employers can elect to make monthly contributions toward their employees’ 529 plans as well as their student loans, the release said.
SoFi said it has acquired LEAF College Savings, a higher education benefits company, to facilitate the contribution and payroll deduction capabilities for SoFi at Work partners.
In addition to 529 contributions, employers also can elect to add student loan refinancing and student loan contributions to their benefits portal through the SoFi at Work program.