Tax Facts

8890.01 / What is the new student loan matching benefit that employers may provide beginning in 2024?

Updated: October 20, 2026 at 04:16 PM
Typically, employers make matching contributions to employer-sponsored retirement plans based on the participant’s elective deferrals to the plan. For example, an employer may offer a 50 percent matching contribution up to 5 percent of the employee’s salary. So, for every dollar the employee contributions, the employer contributes an additional 50 cents—up to the compensation limit. Historically, employees have only received this benefit if they have the funds to contribute to the account.


Beginning in 2024 and beyond, employers will be entitled to make matching contributions to an employer-sponsored retirement plan based on an employee’s qualified student loan payments (see Q ).1 The option will be available even if the employee does not directly contribute to the retirement plan.

Student loan repayments are only treated as contributions to the plan for purposes of qualification testing. Further, employers are permitted to either include these matching contributions with their general non-discrimination testing or test participants who receive these loan-based matching contributions as a separate group.

The provision applies to any type of employer-sponsored deferral-based retirement plan, including 401(k)s, 403(b)s, SIMPLE IRAs and governmental 457(b) plans. Under the new law, the employer must treat the qualified student loan payment match in the same manner as the employer’s deferral-based matching contribution.2





1.  IRC § 401(m)(4)(A)(iii).

2.  IRC § 401(m)(13).


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