HOUSE LEGISLATION TO ADD RETIREMENT PLANNING TO FEDERAL STUDENT LOAN RECIPIENTS’ FINANCIAL LITERACY COUNSELING PROGRAM

Posted on November 1, 2021

Initiative Included in IRI’s Federal Retirement Security Blueprint

WASHINGTON, D.C. – Legislation introduced recently would add retirement planning and saving information to required financial counseling programs for federal student aid recipients. The Insured Retirement Institute (IRI) announced its support for the measure.

The bill, the Financial Fitness Act, would require the Secretary of Education to create a centralized personal finance education portal for federal financial aid recipients to provide information about core personal financial concepts such as budgeting, saving, and investing. The bill specifically calls for information about retirement planning and saving to be included in its financial literacy content.

In its 2021 Federal Retirement Security Blueprint, IRI called for an expansion of mandated financial literacy counseling for federal student loan borrowers to include information about workplace retirement savings choices they may face after graduating college and entering the workforce.

In a letter of support to Rep. Teresa Leger Fernandez (D-N.M.) and Rep. Victoria Spartz (R-Ind.), the bill sponsors, IRI Chief Government and Political Affairs Officer Paul Richman wrote, “Adding a requirement to include counseling information about planning and saving for retirement will provide a helpful new tool to those who have received federal student aid. It will empower them as they enter the workforce with valuable information about the different types of retirement savings accounts and help them make well-informed financial decisions about their retirement years during their working years.”

IRI noted that while student loan debt is held by workers of all ages, workers younger than 45 owe nearly 84 percent of all student debt in this country. IRI research found that less than 40 percent of Millennials contribute to a workplace retirement savings plan, demonstrating that student loan debt significantly impacts retirement savings.

“By creating a federal student aid counseling portal that includes critical information about the intersection of saving for retirement and repaying student loans, this legislation will help provide federal student aid recipients with the opportunity to build economic equity, strengthen their financial security, and lay the groundwork for protecting their income during their retirement years,” Richman said.

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Contact: Dan Zielinski