Key points
- A growing number of U.S. employers offer retirement plan matches tied to student loan payments.
- Typical match rates fall in the range of 4-6% of the salary range.
- The adoption rate remains low because it is a complex proposition and requires significant human resource support to implement.
Under SECURE 2.0 (passed in late 2022) that takes effect in 2024, employers can make matching contributions to qualified retirement plans (such as a 401(k), 403(b), SIMPLE IRA, or 457) based on an employee’s salary. Eligible student loan payments Instead of traditional elective deferrals only.
In simple terms:If you make a student loan payment that meets the plan’s definition of “qualified,” your employer treats that payment as if you had deferred a 401(k), thus triggering your company match. The US IRS issued guidance (Notice 2024-63) which confirms that this match must be offered on the same terms as the employer’s regular retirement match (e.g., same pay percentage, same vesting schedule).
What is eligible to pay a student loan? Typically federal or private loans incurred for the higher education of an employee, spouse, or dependent (provided the employee is legally responsible – such as a parent plus loan). Payment must be made within the plan year and meet other plan conditions.
By enabling this match, employers aim to address a common dilemma: Should employees focus on paying off debt or saving for retirement? This benefit allows for both.
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What companies offer a 401k student loan repayment match?
Although adoption is low, here are some of the top companies that offer it:
|
a company |
Match details |
|---|---|
|
Abbott Laboratories |
Matching 5% if employee pays at least 2% toward student loans |
|
Avangrid |
6% matching |
|
Boeing |
10% matching |
|
Chipotle |
Matching 4% |
|
Comcast |
6% matching |
|
Kraft |
Match 100% with the first 3%, then match 50% with the next 2% |
|
News Corp. |
Match 100% with the first 1%, then match 50% with the next 5%. |
|
RTX (Raytheon) |
Matching 4% |
|
Travelers insurance |
5% matching |
|
Verizon |
6% matching |
|
Walgreens |
Matching 4% |
|
Work day |
6% matching |
What this means for student loan borrowers
For many workers, this benefit alleviates the pressure of balancing student loan repayments with retirement savings. If you’re paying off student debt, this allows you to build retirement assets without giving up your employer match just because you’re not putting money into a 401(k) deferral.
But there are facts to keep an eye on:
Eligibility and verification. Even when a company offers the benefit, you will likely need to meet eligibility requirements such as a minimum length of service (some programs require a year of service or 1,000 hours) before a match can apply. For example, Walgreens’ program stipulates eligibility after 1 year + 1,000 hours of service. Furthermore, you typically must provide proof of loan payments (amount, date, borrower name, account) via a partner platform. Failure to do so may result in you being disqualified from the match.
The matching formula is important. Because the match must follow your company’s standard 401(k) matching rules, you need to check the rate applied and whether your student loan payments count toward the full match or only a portion of it. If an employer’s normal match, for example, is between 50% to 6% of salary, then the student loan follows this formula.
Immediate maturity versus delayed maturity. The same vesting schedule that applies to regular employer contributions will apply to the student loan match. If your company has a late vesting (for example, full vesting after three years), the match is subject to that. This means that if you leave early, they can get it back!
Impact of family budget. If you take advantage of this match, you may feel less pressured to choose between paying off debt and saving for retirement. However, you still need to balance cash flow: making student loan payments plus securing an employer match plus the potential for elective deferrals. It’s helpful to know how much matching your employer offers and work backwards to ensure any pay limits are met.
What do you do next?
The student loan-based retirement match is a useful tool for workers managing dual financial priorities. It allows employers to treat loan payments like retirement contributions and offer the same matching, turning what was often a trade-off into a matching benefit.
While it’s still early adoption and not every company is offering it yet, the trend is slowly growing — especially among large employers in talent-competitive sectors. For borrowers and savers alike, now is a smart time to explore whether this benefit applies to you, understand the rules, and develop a strategy to take advantage of it if it’s available.
Don’t miss these other stories:
How to Use Employer Tuition Reimbursement to Pay for College
5 reasons to use education insurance
These companies offer student loan repayment assistance
Editor: Colin Greaves
The article Companies That Offer 401(k) Student Loans appeared first on The College Investor.
