As we take our first steps into 2025, many employers and employees alike are left trying to make sense of shifting policies as they navigate their plans for the future. For employees with student loans, the struggle is even more complex. With 20% of American adults with undergraduate degrees affected by student loan debt, employees are seeking ways to balance the financial burden of student debt with long-term goals like retirement savings — and they’re increasingly looking to their employers for help (Source: educationdata.org).
Understanding and implementing innovative solutions to address these concerns can set your organization apart in a competitive talent market and increase employee loyalty. However, implementing a plan and navigating policy can seem daunting without the proper support. Here’s what you need to know.
How the SECURE Act 2.0 Creates New Opportunities
The SECURE Act 2.0 was implemented last year. This legislation allows employers to treat employees’ qualified payments toward student loan debt as if they were 401(k) contributions for matching purposes. Prior to this change, people often missed out on employer match opportunities because they had to prioritize repaying their student loans over funding their retirement accounts.
Benefits of a SECURE Act 2.0 Student Loan Match
- Attract and retain top talent. Adding a student loan retirement match benefit to their retirement savings plan can give employers a competitive edge over other employers.
- Reduce financial stress and improve productivity. A student loan retirement match benefit helps employees focus on debt reduction while saving for retirement. That could lead to better job performance and increased engagement.
- Foster employee loyalty and engagement. Helping your employees reduce their financial stress demonstrates your understanding of the challenges they face, which can foster a stronger connection with employees and lead to greater retention.
- Already budgeted and tax exempt. Plan sponsors have already budgeted for matching contributions. While more participation leads to increased matching contribution costs, these matching contributions can be taken as deductions on corporate income tax returns, just like regular contributions.
Addressing Challenges in Implementation
While the benefits of a student loan match program are clear, administrative complexities can seem like a barrier to implementing one. Let’s take a look at the three key tasks employers need to address.
- Verification of Payments. Employers need to verify that employees' student loan payments qualify for the match. This involves collecting and validating documentation.
- Employee Certification. Employees must certify annually that they have made qualifying student loan payments. Employers need to set up a system to collect these certifications and ensure they are accurate and up to date.
- Data Management. Recordkeepers require detailed information to manage the program effectively, including the following information.
- Loan payment amount
- Payment date
- Employee certification of payment
- Confirmation that the loan qualifies as a Qualified Student Loan (QSL)
How Ascendium Simplifies the Process
Although those factors may seem like a lot to tackle, Ascendium is here to address each concern and take the guesswork out of managing a student loan match program. Through partnerships with payroll and technology providers, Ascendium offers a seamless and automated solution for employers. Employee enrollment can be fully integrated with payroll systems, making the process easy for employers and employees. Our platform ensures that every aspect is handled efficiently and transparently from verification to reporting.
- Ascendium serves as a single point of contact to ensure everything is working the way it should.
- Ascendium ensures that employee payments are going toward a qualified student loan. We track the payments, collect employee certifications, and report the details to employers on the cadence they prefer.
- Our platform helps employers administer their student loan repayment assistance benefits. It’s easy to implement and is customizable to the goals of the employer. You can make contributions to help pay down employees’ student loans, verify employee student loan payments to support matching contributions to a retirement account, and facilitate employee payments as part of a payroll deduction.
- We also partner with other tech providers to deliver a comprehensive, hands-off solution for employers, including automated employee enrollment.
Now Is the Time to Act
As employees continue to prioritize financial wellness, offering benefits like a student loan match program can set your organization apart. By leveraging the opportunities provided by the SECURE Act 2.0 and partnering with a trusted provider like Ascendium, you can demonstrate your commitment to employee well-being while enhancing your ability to attract and retain top talent.
Take the first step in transforming your benefits package — contact Attigo by Ascendium to learn more about how we can help you implement a student loan match program that meets your organization’s needs.
