To capture a piece of the growing financial wellness market through student loan and college savings options, Vestwell announced that it has entered into an agreement to acquire student loan benefits provider Gradifi Solutions.
The acquisition adds several new products to the Vestwell platform, including programs to help employees manage and pay down student debt, contribute to education savings accounts and refinance student loans, according to the firm’s announcement.
The firm notes that the strategic acquisition solidifies its commitment to offering best-in-class workplace financial benefits. In addition to its state savings programs, Vestwell now powers both workplace retirement and education benefits, providing employees with a modern and holistic approach to saving.
Gradifi Solutions offers workplace education solutions including financial literacy and student loan refinancing tools, as well as student loan repayment programs. Focused on financial wellness, these tools enable employees to access resources designed to help them achieve their holistic financial goals through the workplace.
“As millions of Americans carry student loan debt, it’s essential for employers to provide accessible tools and programs that enable individuals to pay down their student debt while saving for retirement simultaneously,” Aaron Schumm, founder and CEO of Vestwell, said in a statement. “Bringing Gradifi Solutions into Vestwell accelerates our product roadmap initiative alongside a top-tier client base.
In recent years, employees have had to choose between contributing to their retirement or paying off student loans, rarely given the option to do both at the same time. However, with the recent enactment of the SECURE 2.0 Act, students don't have to sacrifice their retirement future for their loan obligations today, the firm notes. In their workplace retirement plan, an employer can recognize an employee’s student loan payments towards their matching formula. This allows employees to build retirement savings while also making their student loan payments. Currently, an estimated 43.5 million individuals carry federal student loans in the United States.
Both Morgan Stanley and Vestwell are focused on providing the best workplace savings and wellness solutions to mutual clients. Vestwell acquired Gradifi Solutions from Morgan Stanley, which inherited the business as part of its acquisition of E*TRADE Financial.
“We’ve partnered with Vestwell for white label recordkeeping, and we’re thrilled to extend that relationship through their acquisition of Gradifi,” said Brian McDonald, head of Morgan Stanley at Work. “We look forward to bringing our clients and participants a more robust and comprehensive education savings offering as part of this deal.”
The terms of the deal were not disclosed, but will include the technology, clients and team members.
