Providing Retirement Matches for Student Loan Borrowers

Student loan borrowers who are finding it difficult to contribute to their retirement accounts and are missing out on employer matching programs received some good news recently. Thanks to the Secure Act 2.0, signed into law in 2023, employers may now count student loan payments as contributions when calculating retirement program matches. That means, if a company offers this new benefit and matches an employee's retirement contributions, payments made by the employee toward a student loan may count, and that same amount (up to the employer's match parameters) will be added to the employee's retirement account by the company. We provide further details on how it all works below.

What counts as a loan payment?

Loan payments include any payment toward a loan that was used to pay for higher education costs for the employee, the employee's spouse, or the employee's dependents. Payments include those made toward both federal and private loans.

Where can employers deposit matches?

Employers can make matching contributions into employee 401(k), 403(b), 457(b), or SIMPLE IRA accounts.

When does this go into effect?

The opportunity became available January 1, 2024.

Do all employers participate?

Even if an employer matches retirement contributions, they may not choose to consider student loan payments when calculating their match amounts. Contact your benefits department to find out if your company participates.

Are there matching limits?

Yes, all retirement accounts have contribution limits, so your matches, plus any money that you've deposited yourself into your retirement account, can't exceed that amount.

Keep in mind that if you're already contributing toward your retirement account, and receiving your employer's full match, your student loan payments won't add any additional benefit. But if you haven't been able to receive your company's full match, check in with your employer to see if they're offering this benefit, or plan to soon. Your student loan payments could help you stay on top of saving for your retirement.