Nonprofit Commonwealth recently launched Benefits for the Future. The initiative works with employers to pilot intentional workplace financial benefits that improve financial security for millions of workers.

---

For many workers, every paycheck presents an unwelcome choice: chip away at student debt or save for retirement. For many—particularly younger workers or those living on low-to-moderate incomes with little discretionary spending—the urgency of monthly loan payments outweighs the long-term need to invest for the future. The result is that these workers miss out on significant retirement savings growth over time, making it harder to set themselves up for a financially secure future. However, there is an underutilized opportunity for employers to help employees do both at once. Since 2022, employers can offer retirement matching for student loan payments through a provision in the Secure 2.0 Act. Through this benefit, employees can simultaneously pay down their loans and save for retirement, rather than choosing between these two goals. This provides a valuable opportunity for employers to build a more financially resilient and stable workforce, reducing turnover at a relatively low cost compared to other benefit options. 

What is the Student Loan Retirement Match and SECURE 2.0?

Passed in December 2022, the Secure 2.0 Act aims to make secure retirement achievable for more individuals. One key provision allows employers to provide matching tax-deductible contributions to employees’ retirement accounts based on “qualified student loan payments (QSLPs).”  For example, if a company matches employee 401(k) contributions dollar-for-dollar on the first 5% of salary, the same match would apply for student loan payments. By matching in this way, employees have the opportunity to save for retirement while making progress on paying down their loans. The benefit extends beyond the individual employee to include debt held by an employee’s spouse or dependent incurred to pay for higher education expenses (i.e., tuition, fees, books, and supplies). Employers can make matches to 401(k), 403(b), governmental 457(b), or SIMPLE IRA plans. 

Why is it important?

Student loan debt is a well-documented barrier to retirement savings—research from J.P. Morgan Asset Management and the Employee Benefit Research Institute shows that when borrowers begin repaying student loans, their retirement contributions often decrease. Additional research similarly found that on average workers with student debt contribute 6% less to their retirement accounts than those without. 

As repayments resume for many following the pandemic-era pause, employees face renewed tradeoffs between managing student loan bills and saving for retirement. For example, Candidly reported that 38% of borrowers reduced retirement savings contributions in 2024 due to the return of student loan repayments. 

In addition, repayment plan options will change under the One Big Beautiful Bill Act (OBBBA). For some, including many living on low to moderate incomes (LMI), monthly payments may go up under the new options, further reducing their ability to save for retirement. For example, the estimated monthly payment for a single borrower making $40,000 per year will increase from $50/month under the former SAVE plan to $100 in the new Repayment Assistance Plan (RAP) options. The new RAP options, which replace prior Income Driven Repayment (IDR) options, will not account for inflation and have no option for $0 monthly payments regardless of income or job loss. These provisions can put added financial pressure on households living on LMI and making student loan payments. 

As the policy changes go into effect, the student loan retirement match available through SECURE 2.0 presents an even greater opportunity for employers to positively impact worker financial health and protect long-term savings of their employees. The retirement match for student loan payments can be a game changer for employees with student loans who are currently contributing little or nothing to their retirement plan. In research by Fidelity, participants enrolled in a student debt retirement benefit are projected to nearly double their 401(k) balances and double the retirement expenses they can cover by the time they retire. 

What are the benefits for employers? 

In addition to improving employees’ financial health, this benefit can be a boost for employers—improving employee recruitment, retention and satisfaction, all while improving the bottom line: 

• Recruitment: A 2021 Betterment Survey found that 85% of loan borrowers said they would be enticed to leave their jobs for an employer offering better financial benefits. 
• Retention and employee satisfaction: For employees enrolled in student loan retirement matching, Candidly reported a 58% reduction in the likelihood of employee turnover. 
• Return on investment (ROI): Betterment found that an employer’s investment in an employer match and subsequent administrative fees were less than the cost of replacing an employee.

Some companies are already offering student loan retirement match solutions. For example, Walgreens announced it would begin offering a 401(k) education loan payment match benefit to eligible employees, joining companies like Verizon Communications, Chipotle Mexican Grill and Abbott. More employers can benefit by joining this growing cohort. 

How can employers adopt this benefit? 

Commonwealth’s Benefits For the Future initiative seeks to strengthen workers’ financial security by expanding access to intentional workplace benefits, such as retirement matching for student loan payments. Commonwealth is partnering with employers and record keepers to conduct workplace benefit pilots.

Do you want to offer student loan retirement matching or other intentional benefits that improve employees’ financial security, satisfaction and productivity at work? Learn more about partnering with Commonwealth’s Benefits for the Future initiative to build financial security through intentional workplace benefits.