Spinwheel CARES Launch Coincides with Biden’s Debt Forgiveness — How It Benefits Those With Student Loans
Spinwheel, a consumer debt management technology that lets companies embed debt solutions in their applications, launched Spinwheel CARES on August 24 to help Americans prepare for the potential end of the Biden Administration’s payment pause and “take the wheel of their student debt.”
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The launch coincided with the Biden Administration’s announcement to forgive $10,000 in federal student debt for most borrowers, up to $20,000 for recipients of Pell Grants, as well as extend the pause “one final time” to Dec. 31., according to a tweet from President Joe Biden.
“This is welcome news for many borrowers but will fall short of many expectations,” Tomás Campos, CEO and co-founder of Spinwheel, told GOBankingRates. “At the same time, one-time cancellation fails to address underlying issues: Rising costs, difficult-to-manage payments, and little transparency in the servicing market. Our hope is that this will at least provide the certainty that encourages government and industry to come together to address this in a way that fosters responsible innovation in the space.”
Campos explained that the new Student Debt API (application programming interface) Solution provides reliable access to student loan data, with the reporting that employers need to take advantage of all of the benefits associated with the CARES Act and Secure 2.0.
Spinwheel has now been live for more than two years and has billions of dollars of debt connected, Campos said, adding that when federal student loan servicers started to change and borrowers were migrated to new servicers, Spinwheel configured its platform to help make these transitions as seamless as possible — including the migration of Public Service Loan Forgiveness (PSLF) data.
“We launched Spinwheel CARES once the new servicer was announced for all PSLF borrowers. Improving the financial outcomes of borrowers comes first for us and we care about how these loan servicer transitions, and the borrower data migrations therein, are handled,” he told GOBankingRates. “That’s where the name comes from — and it also ties into the CARES Act which was signed into law in March of 2020.”
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Campos said that Spinwheel has dozens of companies signed up on the platform, which range from 401k providers and employee financial benefits providers to consumer financial services, apps, lenders and even grocery loyalty programs.
“While the general audience is any company that wants to engage and help Americans with debt, Spinwheel CARES is specifically for programs that wish to embed financial technology which helps borrowers and their loved ones impacted by student debt,” Campos said.
In April, the Department of Education announced an extension of the pause on student loan repayment, interest, and collections — which went into effect in 2020 due to the pandemic — through Aug. 31. It will now be extended through Dec. 31, as part of the administration’s announcement on Aug. 24.
Campos said that while the moratorium temporarily paused payments and set interest rates to zero for federal loans, the dynamics that cause student loan debt to be the most complicated and fastest growing consumer debt remain.
“That’s why I’m excited to debut our most comprehensive student loan solution yet. Spinwheel CARES makes it easier than ever for businesses to build debt solutions into their products,” Campo said. “Student debt is a crushing burden, and this period is the perfect time for businesses to build solutions to support students who are focused on getting out of debt.”
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Campos also added that Spinwheel CARES includes support for borrowers being migrated to new servicers.
“They won’t get disconnected or dropped from our partners’ programs,” he said. “Without Spinwheel, providers need to cobble together three to six disparate solutions that do not offer the coverage or capabilities that borrowers need. Solutions that are not purpose-built can hurt borrowers with broken connections, poor coverage, missing data, and the inability to take smart and timely action.”
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