Student Loan Repayments Are Restarting: How Should Employers Respond?

The student loan repayment freeze is set to expire on August 29, 2023. Many student borrowers have not been making a payment for at least three years. Many employers are wondering what they can do to help employees handle these additional obligations. 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. The option will be available even if the employee does not directly contribute to the retirement plan. While these contributions do not specifically reduce student loan debt, they do allow the employee to accumulate retirement savings while paying off student loans. Financial services companies have already begun to roll out verification processes to help plan sponsors maximize the value of the new student loan matching provision--meaning that now might be the time for employers to consider providing employees student loan benefits as a way to retain valuable staff. For more information on the student loan matching option, visit Tax Facts Online. : Q . Note: Q is updated with a new Q8890.1.