With the possibility that student-loan debt could push a potential buyer into the subprime credit tier, one automaker is rolling out a program to assist those consumers.
In building on its brand promise to make things better for customers, Hyundai this week introduced Student Assurance, an incentive for customers with student loan debt. The OEM said Student Assurance will help eligible customers free themselves of student loan debt faster by providing a contribution of up to $900 directly toward their student loan with a purchase or lease of a new Hyundai vehicle.
The automaker said Student Assurance is initially available at Hyundai dealerships in California and the Phoenix area through Sept. 30, with plans for a national rollout based on dealer and customer back.
More than 44 million Americans have student loan debt, totaling more than $1.5 trillion, according to the Federal Reserve Bank of St. Louis. Hyundai said soaring student loan debt has far-reaching consequences that not only affect those who owe it, but also the economy at large. A significant number of young adults are putting off life-establishing moves that are traditionally made in their 20s and 30s, including purchasing or leasing a new vehicle. This delay in acquiring a vehicle can often impact their ability to travel to a job. According to Gallup, 83 percent of Americans rely on a vehicle to get to work every day.
“We recognize that student loan debt is one of the most significant financial stress points for people and we want to help address that issue, while allowing people to take advantage of the many benefits of owning a new vehicle,” said Michael DePaul, director of retail operations at Hyundai Motor America.
“Making things better is at the heart of everything we do, and that’s why we are directly contributing to helping our customers get out from being under the burden of student loan debt,” DePaul said.
How the program works
Hyundai has designed the program to make it easy for customers to take advantage of this industry-first offer and has partnered with Gradifi, a leading provider of student loan benefits, to administer the contributions directly to the customers’ student loan debts. There are five steps, including:
— Customer visits HyundaiStudentAssurance.com to check eligibility and is directed to the Hyundai Student Assurance Center to receive a reward code.
— They purchase or lease an eligible new Hyundai vehicle from a dealer in California or the Phoenix area.
— They verify their purchase at Hyundai Student Assurance Center using the reward code and VIN.
— The customer then receives an email from Gradifi with instructions to create an account and register their student loan for verification.
— Upon the loan being verified the customer will receive up to a $900 contribution directly to their student loan debt
Better Idea Generator
Student Assurance is a result of Hyundai’s internal innovation contest, the Better Idea Generator (BIG), that was launched in late 2017. The Better Idea Generator enables Hyundai associates at all levels of the organization to develop and pitch new and innovative ideas. The overall goal of the program is to make innovation inherent throughout the company regardless of seniority or area of responsibility.
Student Assurance was one of 118 ideas that was submitted. To qualify as a BIG idea, the idea must have met at least one of the following conditions:
— Increase sales
— Provide new revenue
— Improve quality
— Enhance the product
— Improve efficiency
After being reviewed by an expert panel of Hyundai senior leaders, Student Assurance founders Samantha Recchia, an associate in public relations, and Martha Mejia, an assistant manager in quality data analytics, developed a business plan and presented Student Assurance to the executive team. It was then approved to proceed to the R&D phase for testing and validation, ultimately leading to the pilot program now available.
“It’s a great feeling to work for a company that encourages new ideas from employees at all levels,” Recchia said. “Developing an idea that revolved around alleviating student debt was the first thing that came to mind when I heard about the Better Idea Generator. Martha and I were determined to come up with a solution that would directly impact the pay down of someone’s student loan.
“Our partner, Gradifi, modified its traditional business model of employee contributions and helped us make the program a reality,” Recchia said.
Mejia said, “It has been a pleasure to lead the launch of an industry-first program that is aimed at helping peers my age with this debt crisis. I am humbled by the opportunity that Hyundai has given me to bring forth an idea that has such personal relevance in my own life.”
To learn more about Student Assurance and to find a participating dealer, visit www.hyundaistudentassurance.com.