2 months ago
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By Darreonna Davis, at The 19th
Starting this year, employers can match employees’ student loan repayments as 401(k) contributions, a policy that experts say can be a “game changer” for Black women, who have the highest student loan debt on average.
When someone makes a student loan payment, their employer can contribute that same amount of money to the employee’s retirement plan under Section 110 of a federal law known as the SECURE Act 2.0. The policy, which stands for Setting Every Community Up for Retirement Enhancement, “permits an employer to make matching contributions under a 401(k) plan, 403(b) plan, or SIMPLE IRA with respect to ‘qualified student loan payments.’”
Signed into law in 2022, the contribution option comes at a time when many Americans are burdened with student loan debt — especially women. Up to 61.4 percent of women with bachelor’s degrees have federal student loans, compared with 52.2 percent of men who hold a bachelor’s degree, according to the Education Data Initiative. The research institution, which focuses on collecting and distributing U.S. education system statistics, reported that Black women have the highest amount of debt — $29,051 — compared with other groups of women.
