Despite a law that allows companies to count student loan payments towards 401(k) matching contributions, experts say that employers are wary of offering this perk. The SECURE Act 2.0 Act, passed in December 2022, aimed to alleviate the financial burden of student loans by allowing employers to contribute to their employees’ retirement funds while still paying down student debt. However, the objectives of the law might be thwarted by lingering economic concerns.
According to a survey conducted by the nonprofit trade association Plan Sponsor Council of America, nearly two-thirds of companies have stated that they will not offer student loan matching, with only 5% having implemented it or planning to do so. Reasons cited for not planning to offer this benefit range from cost and complexity to competing priorities, lack of interest, or necessity. This hesitancy from companies to offer student loan matching demonstrates their reluctance to expand their benefit offerings, particularly in light of concerns related to cost control.
However, despite this trend, some industries such as health care and professional services might adopt this benefit faster as they seek to attract and maintain talent. As we continue into 2024, there may be increasing levels of interest in offering student loan matching benefits, but the degree of its adoption remains uncertain. Furthermore, companies are already offering other forms of student loan assistance, such as educational loans and debt consolidation services, signaling the potential for alternative benefits to address the student debt crisis.
