Game-Changer: Companies Now Offering 401(k) Matches for Student Loan Payments – Here’s What You Need to Know

A groundbreaking new policy now allows companies to offer employees a “match” on their student loan payments in the form of contributions to their 401(k) retirement plans. This change, introduced as part of the Secure 2.0 retirement reform package, aims to ease the financial burden on workers juggling student loan repayments and retirement savings.

Traditionally, 401(k) matches were tied to voluntary contributions employees made to their workplace retirement plans. For instance, a company might match an employee’s 3% contribution with an additional 3%. Under the new rule, companies can now treat student loan payments as if they were 401(k) contributions, enabling workers to receive matching funds for their debt repayments without needing to contribute to the retirement plan directly.

A Growing Trend Among Employers

Since the policy took effect in 2024, more than 100 companies have adopted this benefit, collectively covering nearly 1.5 million eligible employees, according to data from Fidelity, the nation’s largest 401(k) plan administrator.

Major corporations like Kraft, Workday, and News Corp. are among the early adopters. Jesse Moore, senior vice president and head of student debt at Fidelity, noted that many of these are “some of the largest firms in the U.S.,” signaling a growing interest in innovative financial wellness solutions for employees.

Addressing Dual Financial Challenges

The initiative seeks to address two major financial hurdles faced by workers: managing student debt and building a secure retirement fund. With rising student loan balances forcing many employees to prioritize debt repayment over retirement savings, this policy provides a pathway to achieve both goals simultaneously.

By allowing workers to benefit from 401(k) matches tied to their loan payments, employers hope to support their workforce’s long-term financial health while improving retention and engagement.

As more companies recognize the value of this benefit, the program is expected to expand, potentially influencing how employers approach financial wellness initiatives in the future.