Student loan payments have emerged as one of the primary obstacles to retirement saving, but a new plan may change that.
Provisions in the Secure 2.0 Act are designed to help the 28 million student borrowers pay their loans and start retirement savings.
The student loan match works much like employer match with a 401(k). Employers can match loan payments as contributions to an employer-sponsored retirement plan like a 401(k). That means employees would be able to save for retirement just by repaying their student loans. Employers would be able to match dollar-for-dollar or as a percentage of the annual pay.
It is still unknown how many employers will implement the benefit. In a 2023 survey by the National Association of Plan Advisors, fewer than 5 percent of the firms surveyed say they have or will add student loan matching.
Some research suggests that employees are more likely to stay with a company when loan match is in place, according to Money.com.
