Your employer can now match your student loan repayments as 401(k) contributions
By Darreonna Davis, at The 19th
Starting this year, employers can match employees’ student loan repayments as 401(k) contributions, a policy that experts say can be a “game changer” for Black women, who have the highest student loan debt on average.
When someone makes a student loan payment, their employer can contribute that same amount of money to the employee’s retirement plan under Section 110 of a federal law known as the SECURE Act 2.0. The policy, which stands for Setting Every Community Up for Retirement Enhancement, “permits an employer to make matching contributions under a 401(k) plan, 403(b) plan, or SIMPLE IRA with respect to ‘qualified student loan payments.’”
Signed into law in 2022, the contribution option comes at a time when many Americans are burdened with student loan debt — especially women. Up to 61.4 percent of women with bachelor’s degrees have federal student loans, compared with 52.2 percent of men who hold a bachelor’s degree, according to the Education Data Initiative. The research institution, which focuses on collecting and distributing U.S. education system statistics, reported that Black women have the highest amount of debt — $29,051 — compared with other groups of women.