Recruiters and hiring managers are constantly looking for that next high-impact benefit to attract talent. One emerging perk is 401(k) student loan matching, made possible by the SECURE 2.0 Act of 2022. This new benefit allows employers to contribute to an employee’s 401(k) plan when the employee makes student loan payments, even if the employee isn’t contributing to the retirement plan themselves (experian.com). In simple terms: if a candidate is drowning in student debt and can’t afford to put money into a 401(k), you can still give them a company match in their 401(k) just for paying their loans. This helps them build retirement savings while tackling debt – a win-win that savvy employers are now leveraging in their recruitment strategy.
In this post, we’ll break down how 401(k) student loan matching works under SECURE 2.0, why candidates (especially Millennials and Gen Z) crave this benefit, and how you can incorporate it into your hiring and employer branding. We’ll also share real examples of companies using it to stand out, plus tactical tips (including sample messaging) to make this benefit a recruiting game-changer for your organization.
401(k) student loan matching is a new benefit enabled by Section 110 of the SECURE 2.0 Act. It allows employers to treat an employee’s qualified student loan payments as if they were 401(k) contributions for the purpose of the company match (planadviser.com). In practice, this means your company can contribute to the employee’s 401(k) when they pay their student loans, just like you’d match a normal 401(k) contribution.
For example, if your plan matches 50% of contributions up to 6% of pay, and an employee pays 6% of their salary toward student loans, you would put an amount equal to 3% of their salary into their 401(k) plan – even though they didn’t directly contribute to the 401(k) (businessinsider.com). The employee gets the free retirement money they would have otherwise missed, simply by servicing their student debt.
This provision took effect for plan years starting in 2024, and the IRS issued guidance in August 2024 to streamline administration. Importantly, employees can self-certify their student loan payments to qualify, keeping it simple for HR. They’ll attest to details like that the loan was for qualified education and that they made the payments, which the IRS is allowing via an honor system (benefitnews.com). All regular 401(k) match rules (eligibility, vesting, etc.) apply, and everyone eligible for the 401(k) match must be eligible for the student loan match – you can’t pick and choose who gets it. In short, it’s an optional plan feature that any employer can add to their 401(k)/403(b) plan to support workers with education debt.
Why was this created? Lawmakers recognized that millions of younger workers were forgoing 401(k) contributions because of student debt, thus missing out on employer matching dollars (experian.com). The new rule is “intended to assist employees who may not be able to save for retirement because they are overwhelmed with student debt”. By offering a student loan match, you help employees do both: pay down debt now and save for the future. For employers, it’s a powerful way to demonstrate you understand candidates’ financial challenges.
It’s no secret that student debt is weighing down today’s workforce. Outstanding student loans in the U.S. total over $1.7 trillion, and young professionals are keenly aware of every dollar. As a result, job seekers are actively looking for employers who will help with student debt – and they’re willing to make career decisions because of it.
Consider these eye-opening statistics:
Majority want help: Surveys show most college students expect or hope their employer will help repay student loans (meetpaidly.com). In one survey, 86% of young workers said they’d commit to a company for five years in exchange for student loan repayment assistance. Over half even said they have applied to jobs specifically because the company offered a student loan benefit. This signals huge loyalty and talent attraction upsides for employers who offer loan-related benefits.
It influences job choices: Nearly 70% of new graduates report that student debt will influence their job search or acceptance decisions (axios.com). Gen Z candidates in particular are looking for more than just cool perks – 1 in 4 students say a student loan repayment benefit is “essential” in their next job (linkedin.com). Yet only about 1 in 10 job postings currently mention student loan assistance, meaning there’s a big gap (and opportunity) for employers to stand out by advertising this benefit.
Emerging as a standard expectation: What was once a rare perk is quickly becoming mainstream. The number of employers offering student loan-related benefits tripled from 2019 to 2024 (from 4% to 14% of employers) (shrm.org). And in certain industries like healthcare, nonprofit, and government, more job listings are featuring student loan relief as a selling point. The message is clear: especially among Millennial and Gen Z talent, help with student debt is a highly valued benefit – often ranking on par with traditional benefits like a 401(k) match or health insurance.
Boosts retention & engagement: Early data suggests offering a student loan match or repayment benefit can significantly improve retention and engagement. One provider’s research found a student loan matching program led to a 58% reduction in employees’ likelihood of turnover and a 13.5% increase in first-time retirement plan participation. It also drove 27% more employees to maximize their full employer 401(k) match. In other words, alleviating student debt stress makes employees more likely to stick around and invest in their future with you.
For today’s candidates, a company that addresses student debt stands out as forward-thinking and empathetic. By acknowledging this burden and offering a solution, you instantly elevate your employer value proposition in the eyes of talent.
Employers of all sizes are beginning to deploy 401(k) student loan matching as a recruitment and employer branding tool. Here are a few examples of how it’s catching on:
Corporate leaders adopting the benefit: Over 100 corporations have already partnered with major 401(k) providers (like Fidelity) to launch student loan matching programs in 2024 (nysscpa.org). Big names like Verizon, Dow, News Corp, and Liberty Mutual are among those enabling student loan payments to count toward their 401(k) match. Liberty Mutual even promoted its new “401(k) Student Loan Match” on social media to bolster its employer brand, highlighting that “we’ll match employees’ student loan payments in the form of 401(k) contributions, up to the full company match”. These early adopters signal to the market that this benefit is both feasible and highly attractive to employees.
Mid-sized companies highlighting it in job ads: It’s not just Fortune 500 firms. Kimley-Horn, an engineering consulting company (~5,000 employees), prominently features its student loan match benefit in recruiting. In job postings, under “Financial Wellness,” Kimley-Horn lists: “Student loan matching in our 401(k)” right alongside perks like bonuses (careers-kimley-horn.icims.com). By calling this out, they send a clear message to candidates: you don’t have to choose between paying your loans and saving for retirement here. This helps Kimley-Horn snag talent who might otherwise hesitate to contribute to a 401(k) due to debt.
Smaller employers leveraging creative programs: Even smaller organizations are getting in on the action by offering student debt help as part of their culture. Some have used traditional student loan assistance (employer makes direct loan payments, up to $5,250 tax-free under IRC Section 127) to great effect, and are now expanding into the 401(k) match approach. For example, Avangrid, Inc., a utility company, initially launched a student loan repayment program giving employees up to $3,000 per year toward loans. They found it dramatically improved engagement and retirement readiness for younger employees. While Avangrid’s program was via a different section of the law, it set a precedent that smaller and mid-sized companies can successfully implement student loan benefits. Now, with SECURE 2.0, similar companies can achieve impact without extra out-of-pocket cost by using the 401(k) match model.
Finance and tech firms competing on debt relief: A growing number of banks, fintechs, and even startups are adding student loan match programs to compete for young talent who may have offers from higher-paying tech companies. Synchrony Financial, for instance, rolled out a student loan 401(k) contribution feature in early 2024. One Synchrony employee noted that it felt like “divine intervention” – she had paused retirement contributions to tackle $180k in loans, and now her employer’s match (when she pays loans) means she can resume saving for retirement without derailing her debt payoff. Stories like this spread quickly, positioning the employer as a hero in employees’ financial lives.
The takeaway from these examples is that 401(k) student loan matching is moving from theory to practice, fast. Companies are advertising it in job descriptions, touting it in offer letters, and showcasing it in employer branding campaigns to differentiate themselves. Importantly, you don’t need to be a huge corporation to do this – vendors like Goodly, Candidly, and major 401(k) recordkeepers are making it turn-key for even small HR teams (pressroom.aboutschwab.com). If your competitors (big or small) haven’t adopted it yet, implementing this benefit now gives you a prime window to shine as an innovative, employee-centric workplace.
Offering a great benefit is half the battle – you also need to communicate it effectively so candidates take notice. Here are tactical ways to weave your student loan matching program into recruiting materials and conversations:
Highlight it in job postings and career pages: Don’t bury this benefit in a long list. Instead, call it out under a “Benefits” or “Financial Wellness” section of the job description. For example, Kimley-Horn’s posting reads: “Financial Wellness: Student loan matching in our 401(k), and performance-based bonuses”. You can similarly list it as “401(k) Student Loan Repayment Match” with a one-line explanation (“We contribute to your 401(k) when you make student loan payments, so you can build savings while paying off debt”). Make sure it’s prominent — candidates skimming job ads should immediately see that you offer student debt support.
Include a blurb in offer letters: Seal the deal by reminding candidates of this benefit when extending an offer. For instance, in the offer package you might add: “As part of our commitment to your financial wellness, [Company] will match your student loan payments with an equivalent contribution to your 401(k) (up to [X]% of your salary). This means you can eliminate debt without sacrificing your retirement match.” Such language makes the offer more enticing and shows you invest in employees’ long-term success.
Train recruiters to talk it up: Ensure your recruiters and hiring managers understand the student loan match and mention it in interviews, especially with early-career candidates. It can be as simple as, “We know student debt is a big concern for many. One unique benefit we offer is a student loan 401(k) contribution match…” This not only educates the candidate, but also signals that your company gets it when it comes to their generation’s challenges.
Leverage it in employer branding and social media: Promote the benefit in channels where you showcase company culture. This could be an article on your careers blog about an employee who benefited, a social media post celebrating the launch of the program, or a bullet point on your LinkedIn Life page. For example, Liberty Mutual’s careers team announced their new student loan match on LinkedIn/Instagram to generate buzz externally. The messaging focused on how “it pays to pay off your student loans here” because the company contributes to your 401(k) for you. By publicly highlighting the program, you not only attract job-seekers but also reinforce to existing staff that you invest in them.
Target it to the right audiences: If you’re recruiting on college campuses or hiring interns/new grads, make sure this benefit is front and center. Younger candidates with loans will perk up when they hear about it. Likewise, for roles that typically require advanced degrees (and thus often come with heavy grad school debt – e.g. MBAs, engineers, nurses, lawyers), emphasize this perk during recruitment as a way you support continued career growth without financial compromise.
By incorporating the student loan match into your messaging at every stage – job ad, interview, offer, and onboarding – you’ll ensure candidates understand its value. It can genuinely tip the scales in your favor when a candidate is comparing offers. Many employers still don’t offer this, so shouting it from the rooftops gives you a distinct voice in a noisy job market.
You might be thinking: Can we afford to do this? The good news is that a 401(k) student loan match is one of the most cost-effective talent investments you can make. Here’s why:
Uses existing budget allocations: Unlike a direct student loan reimbursement (which is essentially extra cash compensation), the 401(k) match approach typically uses the same budgeted dollars as your normal 401(k) match. You’re simply extending that match to employees who previously weren’t able to take advantage of it. If an employee was not contributing to the 401(k) because of loans, you weren’t paying a match for them before. Now you will – but that expense is comparable to what you’d spend if they had been contributing. In other words, you’re not necessarily adding a new line-item cost, you’re maximizing the impact of a benefit you already offer.
Tax-advantaged and regulated: Contributions you make to the 401(k) (including these matches) are tax-deductible for the company, just like regular match contributions. And because it goes into a retirement plan, employees generally can’t cash it out immediately, which means it’s truly supporting their future with the company. It’s essentially “forced” savings that increases the stickiness of your benefit. Plus, SECURE 2.0 included provisions to simplify compliance (like relaxed nondiscrimination testing when offering this feature), making it easier for plans of all sizes to implement without legal headaches. The IRS’s interim guidance confirmed employers can rely on employee certification of loans to keep admin simple.
High perceived value to employees: The psychological ROI is huge. For a relatively modest cost per employee, you deliver outsized goodwill and loyalty. Consider an employee with $30,000 in loans who can’t spare $200/month for retirement. Your company’s student debt 401(k) match now gives them perhaps an extra $100/month toward retirement (if your match is 50% up to a threshold) – money they deeply appreciate because it was otherwise “lost” to them. Employees see this as free money and a gift toward their future, which builds gratitude and morale. In contrast, spending the same money on, say, a marginally higher base salary might not have the same motivational punch, since salary quickly blends into taxes and living expenses.
Differentiation in a crowded market: Offering this benefit immediately puts you in a select minority of employers. As of mid-2024, 64% of companies said they had no plans yet to implement a student loan 401(k) match. That means by adopting it now, you join an innovative group ahead of the curve. You can literally be one of the only employers in your space advertising this benefit. This kind of differentiation is priceless when competing for talent. It shows your company is agile and cares about employee wellness in a modern, relevant way – not just trotting out the same old benefit menu.
Impacts retention and productivity: As noted earlier, employees who benefit from student debt assistance are more likely to stay at a company longer (86% would commit 5 years; turnover risk drops by ~58%). Reducing churn itself yields cost savings in hiring and training. Additionally, by alleviating financial stress, you’re likely improving employees’ focus and productivity on the job. It’s hard to quantify, but employees without the weight of student loans on their mind can bring more energy and engagement to work. All told, the program can pay for itself through better retention and a more financially secure workforce.
From a pure cost perspective, some employers worry that more people will suddenly qualify for match dollars (true, if previously a chunk of your workforce wasn’t contributing to the 401k, you’ll now be paying match for some of them). But remember: helping those employees save is exactly the point – you are investing in those who need it most, likely younger employees who your succession pipeline depends on. And you can always put reasonable limits (it only matches up to the same percentage of pay as your normal match formula, and never above IRS contribution limits). The financial exposure is controlled, and you can project it using how many employees have student debt. Many companies find the actual uptake is modest in year one, but the goodwill from simply offering it is universal across all candidates. Even those without loans will view it as a positive signal about your culture.
In short, 401(k) student loan matching offers high impact for relatively low incremental cost. It addresses a real pain point for millions of workers and differentiates your brand, all while leveraging an existing benefit structure (the company match) that employees already understand. Especially in a competitive talent market, it’s a rare chance to do well by doing good.
As you refine your talent acquisition strategy, ask yourself: How can we show candidates we truly understand their needs? Embracing 401(k) student loan matching is a powerful answer to that question. It tangibly proves your company is listening and adapting benefits to solve the problems that keep employees up at night. By helping recruits pay off debt and save for tomorrow, you’re investing in their holistic financial well-being – and that fosters the kind of loyalty and engagement that money alone can’t buy.
Early adopters of this benefit are already reaping the rewards in hiring and retention. The playing field is still uncrowded, so there’s an outsized opportunity right now to claim a unique recruiting advantage. Imagine candidates choosing your offer over others because you’ve removed the guilt and stress of “saving vs. debt” from their lives. That’s the definition of a high-impact benefit.
Don’t wait for everyone else to catch on. With the SECURE 2.0 law in place and providers ready to help administer it, now is the time to act. Make 401(k) student loan matching a centerpiece of your recruiting message and employer brand, and watch how it elevates your talent attraction in this debt-burdened generation.
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You’ll discover how our platform can seamlessly integrate 401(k) student loan matching into your benefits, ensure compliance, and help you maximize the ROI of this game-changing perk. Don’t miss out on this chance to turn the student debt crisis into a talent attraction opportunity – grab the guide now and let Loan Certify help you lead the way in competitive recruiting.