If you have an employer-sponsored retirement plan, such as a 401(k), you are probably familiar with matching contributions, with which you can receive an additional employer-paid investment toward your retirement savings for every contribution you make. Now you may also be eligible for an employer match against every student loan payment you make.
Thanks to the SECURE 2.0 Act and new implementation guidelines from the IRS, qualified loan payments can be treated as qualified retirement contributions, making them eligible for a 401(k) match if your employer chooses to offer this option. While the specifics, including rates and vesting schedules, of the student loan match will vary by employer and your retirement plan rules, you can expect it to be similar to the regular match offered with elective deferrals.
How to get a 401(k) match for your student loan payments
To receive matching contributions to your retirement account for your student loan payments, you must be enrolled in a qualifying plan—a 401(k), 403(b), governmental 457(b), or SIMPLE IRA—through your participating employer. So first things first, check that your employer is offering student loan matches and that you are signed up for their sponsored plan.
In addition, you must be making qualified student loan payments (QSLPs) on a qualified education loan. Qualified educational expenses must meet several criteria laid out by the IRS:
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They must be taken out on behalf of the taxpayer, taxpayer’s spouse, or taxpayer’s dependent at the time it originated.
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They must be paid or incurred “within a reasonable period of time before or after” you took out the loan.
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They must be related to education received during a time when the recipient was an eligible student.
You will also need to provide your employer with documentation about the loan, including the amount and date, payment history, and evidence that it meets the criteria listed above. Depending on how your employer plan is set up, you may need to opt into the match and certify payments on a per-payment or annual basis. There is no age limit or requirement for participating in the student loan employer match.
