Saving for college or paying it off? Betterment wants to help with both

Betterment, the digital investment advisor, is debuting new features to help customers wrangle the cost of higher education—a burgeoning economic quandary in these times—whether paying back student loans or stashing a college fund.

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

On the other side, Betterment’s new 529 program will let clients save for college smartly. Also offered as part of the Betterment at Work 401(k), it will advise employees on investing their pre-tax dollars into college funds over time, whether for themselves or for their children. This solution comes through Betterment’s deal to acquire several divisions of Gradvisor, a college savings advisor.

Both further Betterment’s quest for customization, as passive investors demand more personalized options for their money in today’s era of Robinhood traders. Such solutions widen the company’s appeal for customers of different needs across varying stages of life, from young recent graduates, to mid-career workers with families, to those nearing retirement.

In another recent move to meet the needs of the moment, Betterment revealed in early February it will offer cryptocurrency portfolios via its acquisition of crypto investing advisor Makara. “It’s definitely maturing into more of an alternative like gold or precious metals,” Betterment’s director of behavioral finance and investing, Dan Egan, said of Bitcoin in a segment on CNBC. “You should have a little slice of it in your portfolio just for diversification’s sake.”

But Betterment’s debt program feels even more urgent: It comes amidst a backdrop of political debate over what some view as an impending student loan crisis, with the country’s collective student debt standing somewhere around $1.5 trillion. That number adds up to a nearly 150% rise over the past 15 years. As many of the nation’s roughly 45 million borrowers have struggled to repay seemingly insurmountable debt burdens during the COVID pandemic, fears are growing that it’s 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.