How Does SECURE Act 2.0 Student Loan Matching Work?

The SECURE 2.0 Act of 2022 introduced a provision allowing employers to offer a student loan matching program within their retirement plans. This feature is designed to address a common financial challenge: employees burdened by student loan debt often cannot afford to contribute to their retirement savings, thereby missing out on employer matching funds. By enabling employers to match qualified student loan payments with contributions to an employee’s retirement account, the law helps individuals build retirement assets while actively paying down their educational debt. This optional provision for employers became effective for plan years beginning after December 31, 2023.

Core Mechanics of the Program

An employee makes a payment towards their qualified student loan, and in turn, the employer contributes a matching amount to the employee’s retirement account. For the purpose of calculating the employer match, the employee’s student loan payment is treated as if it were a traditional, pre-tax contribution to their retirement plan. This mechanism allows employees to receive the employer match without having to make a separate contribution from their paycheck.

This benefit can be integrated into several types of retirement plans, including:

• 401(k) plans
• 403(b) plans
• Governmental 457(b) plans
• SIMPLE IRA plans

The amount of student loan payments that can be considered for a match is subject to the annual limit on employee elective deferrals, which is $23,500 for 2025. If an employee also makes regular contributions to their retirement plan, the total amount eligible for a match—combining both their deferrals and their student loan payments—cannot exceed this annual cap.

Employee Eligibility and Requirements

To participate in a student loan matching program, an employee must meet the same eligibility criteria required for the employer’s regular matching contributions. If an employer offers this benefit, it must be available to all employees who are eligible to receive a standard match on their retirement plan deferrals. Companies cannot selectively offer the student loan match to only certain groups of employees, ensuring equitable access for all who qualify for the retirement plan.

A central component of the program is the “qualified student loan payment” (QSLP). This is defined as a payment of principal or interest on a qualified education loan. The loan must have been used for qualified higher education expenses for the employee, their spouse, or a dependent. To be eligible, the employee making the payments must be legally obligated to repay the loan, for instance as the primary borrower or a co-signer.

To receive the match, employees must provide their employer with proof that they have made these qualified payments and certify annually that they have done so.

Employer Implementation and Plan Rules

Employers need to formally amend their retirement plan documents to offer a student loan matching program, and they have until the end of the 2026 plan year to do so. The amendment officially adds the student loan match as a feature of the company’s benefits package, outlining the specific terms and conditions.

Matching contributions made on behalf of student loan payments are subject to the same overall annual contribution limits as other employer and employee contributions. This sets a cap on the total amount that can be contributed to an individual’s retirement account from all sources in a given year.

The vesting schedule for student loan matching contributions must be identical to the schedule used for regular matching contributions. An employee gains ownership of the student loan match funds over the same period as a standard match, and employers cannot impose a longer or different vesting schedule for these contributions.

Retirement plans must pass certain tests to ensure they do not unfairly favor highly compensated employees. IRS guidance provides some relief for the Actual Deferral Percentage (ADP) test, allowing plans to test employees receiving a student loan match separately from those receiving a regular match on their deferrals.

The Process for Claiming the Match

The first step is to formally notify the employer of the intent to participate, often through a self-certification process where the employee attests to making qualified student loan payments. After notification, the employee must submit the required proof of payment. The specific method and frequency of submission are determined by the employer’s plan rules and could involve uploading loan statements to a benefits portal or providing forms to HR.

Following the submission of proof, the employer will process the information and make the corresponding matching contribution to the employee’s retirement account. The timing of this deposit can vary, with some plans making contributions per pay period and others doing so quarterly or annually.