You Can Get a 401K Match for Student Loan Payments
If you have an employer-sponsored retirement plan such as a 401(k), you’re probably familiar with matching contributions, which allow you to earn an additional employer-matched investment into your retirement savings for every contribution you make. You may also now be entitled to an employer match for every student loan payment you make.
Thanks to the SECURE 2.0 Act and new IRS guidelines , qualified loan distributions can be treated as qualified retirement contributions, making them eligible for a 401(k) match if your employer chooses to offer that option. While the specifics, including rates and vesting schedules, of a student loan will vary depending on the employer and the rules of your retirement plan, you can expect it to be similar to the regular match offered with elective deferments.
How to Get a 401(k) Match for Student Loan Payments
To receive matching contributions to your retirement account for student loan payments, you must be enrolled in a qualifying plan—401(k), 403(b), public 457(b), or SIMPLE IRA—through your participating employer. So, first things first, make sure your employer offers equal student loans and that you are signed up for their sponsored plan.
In addition, you must make qualified student loan payments (QSLP) on your qualified education loan. Qualified education expenses must meet several criteria set by the IRS :
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They must be issued in the name of the taxpayer, the taxpayer’s spouse, or the taxpayer’s dependent at the time they arise.
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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 acquired while 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’s plan is set up, you may be required to agree to participate in the plan and certify for benefits on an individual or annual basis. There are no age restrictions or requirements to participate in the Student Loan Employer Competition.