How to Get a 401(k) Match for Your Student Loan Payment

Those who have an overwhelming amount of student loan debt are often unable to contribute to a 401(k) plan and qualify for a valuable 401(k) match.

The SECURE 2.0 Act, which was signed into law by President Joe Biden on Dec. 29, 2022, allows eligible employees to receive a 401(k) match if they are making qualified student loan payments.

Here’s how a student loan 401(k) match works:

— An employee must be making qualified student loan payments due to higher education expenses.

— The employer must offer a qualifying retirement account and a student loan matching contribution program.

— Student loan matching contributions can be made to a 401(k), 403(b), SIMPLE IRA or 457(b) plan.

What is a Student Loan 401(k) Match?

A student loan 401(k) match allows companies to pair student loan repayment with contributions to a traditional 401(k) plan.

“A 401(k) student loan match lets employers help employees with repayments of qualifying student loan debt using defined contribution retirement plans, after calculating the employer’s matching contribution,” says Katie Hockenmaier, defined contribution research director at Mercer in San Francisco.

If an employee is paying down eligible student loan debt and does not contribute to the defined contribution plan, then an employer would be permitted to make a matching contribution to the plan on behalf of that employee, Hockenmaier says.

“The 401(k) student loan benefit would particularly impact employees who have little discretionary income to contribute to their retirement plan and contribute to their long-term financial wellness,” Hockenmaier says.

[Read: How to Maximize Your 401(k) Match.]

Who Benefits from a 401(k) Student Loan Matching Program?

A 401(k) student loan matching program potentially benefits employees who are actively paying off student loan debt and employers who wish to recruit and retain college-educated workers.

For employees who are already paying down student loan debt, a 401(k) match enables them to begin building wealth for retirement at the same time. Witnessing the 401(k) plan’s compounded investment growth may compel them to save more in the retirement plan when they are able to do so.

Employers are able to provide a valuable new benefit to highly educated employees. A 401(k) student loan matching program helps employees to save for retirement and pay down student loan debt at the same time, and keeps employees engaged with company benefits.

How to Qualify for a Student Loan 401(k) Match

A worker needs to be employed at a company that provides a 401(k) plan and a student loan matching contribution program. Companies that offer a student loan 401(k) match include Abbott Laboratories and Boeing.

“To qualify for a student loan 401(k) match, an employee must work for a company that offers the program, and they must have both a qualifying student loan and a qualifying retirement account,” says Tim Doman, chief executive officer at Top Mobile Banks, a digital banking platform.

“The exact details of how the program works will vary depending on the employer but, in general, the employer will match a certain percentage of the employee’s student loan payments up to a set maximum amount,” Doman says.

Employers can make student loan matching contributions to several types of retirement accounts including a 401(k) plan, 403(b) plan or SIMPLE IRA. Government employers can make student loan matching contributions to a 457(b) plan.

The employee must be making qualified student loan payments to be eligible for the student loan 401(k) match. Employees may need to provide loan repayment documentation to qualify for the program, depending on an employer’s policy on student loan matching.

[READ: How Much Should You Contribute to a 401(k)?]

How Does a Student Loan 401(k) Match Work?

401(k) student loan matching contributions work like traditional employer 401(k) plan matching contributions, but with a twist. The employer match will apply to the amount of student loan payments rather than the employee’s 401(k) contributions.

For example, if your employer provides a dollar-for-dollar 401(k) match, and you make $3,000 worth of qualifying student loan payments, you could receive a $3,000 401(k) contribution from your employer.

Aircraft manufacturing giant Boeing recently launched the Boeing 401(k) Student Loan Match program, which is designed to help staffers pay down student loan debt while saving for retirement.

“If you enroll in The Boeing 401(k) Student Loan Match, then the amount you pay on your student loans will be added to any match-eligible contributions (base pay and/or incentive deferrals) that you make to your Boeing 401(k),” Boeing states on its website.

“While you are enrolled there will be no per paycheck company matches to your 401(k). Instead, after the year ends Boeing will match the total of your loan payments and match-eligible contributions up to your applicable company match maximum,” the company states.

Companies looking for help can leverage a third-party employee benefits partner. For example, employer benefits provider Vault offers companies a student loan 401(k) matching service that allows for a 401(k) matching contribution based on specific employee student loan amounts.

[Read: New 401(k) Contribution Limits for 2023]

The Benefits of a 401(k) Student Loan Matching Program

A 401(k) student loan matching contribution program can mean the difference between employees putting off saving for retirement while laboring to repay student loans on their own, or getting help from an employer to gain ground on their 401(k) retirement plan contributions while they pay down student debt.

“The impact of a student loan 401(k) match can be significant,” Doman says. “For example, if an employee has a $30,000 student loan and their employer is offering a 50% match on student loan payments, the employee could receive an additional $15,000 in their retirement account over the life of the loan.”

A student loan 401(k) match program can help employees make the transition from paying down past debts to creating a nest egg for retirement.

“That’s a significant boost to their retirement savings, and it can make a real difference in helping them achieve their financial goals,” Doman says.

More from U.S. News

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How to Get a 401(k) Match for Your Student Loan Payment originally appeared on

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