IRS: How to Get a 401(k) Match for Your Student Loan Payment
Those with 401(k), 403(b), and other savings plans might get relief through their employer-provided retirement account.


Data show more than half of all students in the U.S. graduate with student loan debt, but here’s some good news: You may be able to save for retirement quicker while you pay your student loan.
The IRS just released new guidance on how some with student loans may be able to receive a retirement match from their employer for every loan payment made. So for example, if you pay $200 a month in student loans, you could get a $200 match from your employer toward your retirement fund.
Employers don't have to participate in the match. But if yours chooses to, here's what the IRS says you need to know to get started.

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What is the SECURE 2.0 Act employer match?
The new IRS guidance clarifies how those with student loan debt can receive an employer-paid match into their retirement savings account. As mentioned, these matches are made for every qualified loan payment you make. (The IRS essentially allows your employer to treat the student loan payment as a qualifying contribution to your 401(k) or other similar retirement plan.) More on all of that later.
This could be a game-changer for some borrowers. Before the SECURE 2.0 Act, you were only allowed matches based on how much you contributed to your retirement plan since prior law didn’t provide a match for student loans. However, this new-ish law (enacted two years ago) is designed to encourage those with student debt to save more for retirement.
Studies show that grads with debt are disadvantaged when it comes to retiring. Those with student loans accumulate 50% less retirement wealth by age 30 than their student-debt-free peers. And the burden of those loans isn’t limited to young people. An economic think tank recently found that over 2.2 million Americans over 55 have outstanding student loan debt.
Under the student loan 401(k) match provision, there is no age limit to participate.
New 401(k) rules for student loans
Those with student debt who work for a participating employer with a 401(k) plan, 403(b) plan, governmental 457(b) plan, or SIMPLE IRA can participate in the retirement match.
To qualify, you must be making "Qualified Student Loan Payments (QSLPs)." You should be prepared to provide your employer with the following QSLP information:
- The amount and date of the loan payment
- Confirmation that you made the payment (and not your friend, for example)
- Confirmation that the loan is a qualified student loan and was used to pay for qualified higher education expenses for yourself, your spouse, or your dependent
- Confirmation that you incurred the loan
“Qualified higher education expenses” for this match mean those expenses associated with the cost of attending school. If you can prove the above eligibility requirements, retirement matches may start right away.
Note: The IRS says a "qualified student loan" is a loan you took out solely to pay qualified higher education expenses that were: (1) For you, your spouse, or a person who was your dependent when you took out the loan; (2) For education provided during an academic period for an eligible student; and (3) Paid or incurred within a reasonable period of time before or after you took out the loan.
How much is the match and how do I enroll?
Your student loan contribution match will generally be the same as your plan’s regular match (i.e. same rates, vesting schedules, etc.). Your employer may require that you opt in and have you provide certification of your QSLPs to receive your match.
It's important to inquire with your employer if you are unsure about your retirement plan’s rate, rules, or other details.
Other ways to save for retirement
Only 40% of older adults rely on Social Security as a sole source of retirement income. And young people seem to know this. Data show that over 50% of adults aged 24 to 35 expect to rely on a retirement plan, such as a 401(k) as their source of income after retirement, not Social Security.
So what can you do to build your nest egg? Here are some ideas.
- Be sure you’re taking full advantage of all education tax credits and deductions
- Retirees: Make a tax plan
- Consider retiring in a tax-friendly state
Also, keep in mind that the IRS is gradually unfurling rules and regulations to fully implement the SECURE 2.0 Act. Currently, the agency is welcoming comments on the student loan match guidance and working on proposed regulations.
Related Content
- The Student Loan Interest Tax Deduction
- What’s Happening With Biden Student Loan Forgiveness?
- A Tax-Free Way To Help Pay Your Student Loan
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Kate is a CPA with experience in audit and technology. As a Tax Writer at Kiplinger, Kate believes that tax and finance news should meet people where they are today, across cultural, educational, and disciplinary backgrounds.
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