Tackling student loan debt

As federal student loan debt payments and interest accrual restart after a three-year pandemic-related break, around 43 million people face challenging financial concerns, including the impact payments will have on their workplace retirement plan contributions. Unsurprisingly, 84% of employees would prefer to work for an employer that offered student loan management assistance.¹ By offering debt benefits, employers can help relieve their employees’ financial stress.

Employers can make tax-free contributions directly to their employees’ student loan servicers, even while employees continue to make regular payments, via a student loan direct payment program. 

Another program — due to an optional provision in the SECURE2.0 Act — permits employers to make matching contributions to their employees’ 401(k) plans, 403(b) plans, or SIMPLE IRAs based on qualified student loan payments starting in 2024. With this benefit, employees wouldn’t have to miss out on saving for retirement while paying off their student debt.

When implementing either program, there are considerations and next steps employers need to explore. Employers should work with their benefits or plan consultants to determine the best approach for their company objectives and employee demographics.

To learn more about how employers can help their employees tackle their student debt while saving for retirement.