The SECURE 2.0 match that pays your retirement while you repay your loans
Under Section 110 of the SECURE 2.0 Act, your employer can treat your student loan payments as 401(k) contributions and match them — same formula, same money, whether you defer or repay. It's optional for employers, allowed since plan years beginning after December 31, 2023, with IRS rules settled by Notice 2024-63 (August 2024); most adopting plans made 2025 their first full plan year. The math: a $60,000 salary paying $300/month on student loans is paying 6% of pay, and under the most common match (100% of the first 3% + 50% of the next 2%) that earns 4% — $2,400 a year — deposited into the 401(k). Compounded monthly at 7%, ten years of that match is $34,617. Federal and private loans both count, payments don't touch your 402(g) deferral limit, and voluntary extra payments qualify.
| Plan formula | $300/mo payments (6% of pay) earn | Match per year | Grows to in 10 yrs @7% |
|---|---|---|---|
| 100% of first 3% + 50% of next 2% | 3% + 0.5 × 2% = 4.0% of pay | $2,400 | $34,617 |
| 100% up to 4% of pay | 4.0% of pay | $2,400 | $34,617 |
| 50% up to 6% of pay | 0.5 × 6% = 3.0% of pay | $1,800 | $25,963 |
| Dollar-for-dollar up to 6% | 6.0% of pay | $3,600 | $51,925 |
Growth figures compound the match monthly at 7% and ignore taxes on eventual withdrawals. Match percentages apply to plan definition of compensation — usually W-2 box 1 pay — the same way your regular match is computed. Your plan's summary plan description lists the exact formula.
| Rule (SECURE 2.0 §110 / Notice 2024-63) | Detail |
|---|---|
| Loan types | Federal, private, and refinanced education loans — refinancing counts if the new balance doesn't exceed the refinanced one |
| Whose education | The employee's, a spouse's, or a dependent's qualified higher-education expenses |
| Payment types | Principal + interest, scheduled or voluntary, including extra payments and payments during deferment/forbearance |
| Excluded | Payments reimbursed by another program (e.g., employer repayment assistance), credit-card draws, non-education debt |
| Certification | Annual employee certification; one consolidated filing per year is allowed; plans must allow a reasonable submission window before year-end |
| Limits | Doesn't consume your 402(g) deferral limit; match counts toward 415(c) and follows plan vesting |
Before SECURE 2.0, your 401(k) match punished anyone repaying student debt instead of saving: every dollar aimed at loans was a dollar the employer wouldn't match. Section 110 fixed that. If your plan adopted the provision, your qualified student loan payments (QSLPs) are treated as elective deferrals for match purposes only. The loan repayment and the 401(k) deposit are the same money to your employer's formula.
Annual payments = monthly payment × 12. Payments as % of pay = payments ÷ salary. Your plan's formula then applies to that percentage exactly as it would to deferrals: a tiered formula (100% of the first 3% + 50% of the next 2%) pays 4% of salary on a 6% payment rate; a straight formula (rate × cap) multiplies. The projection compounds each year's match monthly at your assumed return.
$60,000 salary, $300/month loan payment. Payments are $3,600 a year — 6% of pay. Under the most common formula, the match is 3% + 0.5 × 2% = 4% of pay: $2,400 a year into the 401(k), deposited while the borrower repays the loan exactly as planned. At 7% compounded monthly, ten years of $2,400 deposits grows to $34,617, of which $24,000 is employer money. A 50%-up-to-6% plan pays the same person $1,800 a year — $25,963 over the decade. Same loan, same payment, 33% more employer money purely from the formula's shape.
One more layer: if the plan matches deferrals at the same formula, deferring and loan-paying combine — deferrals plus QSLPs count together toward the match percentage, but the combined match can't exceed what a full deferral of the same percentage would earn.
Enter your salary and the payment you actually make — on federal Direct loans, a private loan, or a refinanced one; all qualify if the plan participates. Pick your formula from the summary plan description, or enter a custom rate and cap. The horizon defaults to 10 years; stretch it to 20 and the same $2,400-a-year match compounds past $104,185. Then ask HR two questions: did the plan adopt §110, and when is the certification deadline?
Educational estimate, not tax or investment advice — plan rules vary and the IRS's guidance (Notice 2024-63) continues to evolve pending final regulations.
Yes, if the plan opts in. Section 110 of the SECURE 2.0 Act lets 401(k), 403(b) and governmental 457(b) plans treat qualified student loan payments as if they were elective deferrals, purely for calculating the employer match. It's optional for employers, effective for plan years beginning after December 31, 2023, and most adopting plans made 2025 the first full plan year after the IRS's Notice 2024-63 guidance arrived in August 2024.
It follows your plan's regular match formula. Example: a $60,000 salary with $300/month loan payments ($3,600 a year = 6% of pay) under the most common formula — 100% of the first 3% plus 50% of the next 2% — earns 4% of pay, or $2,400 a year. Compounded monthly at 7%, ten years of that match grows to $34,617 while you repay the same loan you were repaying anyway.
Yes. A qualified education loan can be federal or private — the test is purpose, not program. It must have been borrowed for the employee's own qualified higher education expenses, or a spouse's or dependent's. Refinanced loans also count as long as the refinancing didn't exceed the balance being refinanced, per IRS Notice 2024-63.
No. Qualified student loan payments are only treated as deferrals for the match calculation. They don't reduce your elective deferral limit, so you can still defer up to the annual cap yourself. The employer match they generate does count toward the overall 415(c) annual additions limit and follows the plan's normal vesting schedule.
You certify your payments to the plan. Under Notice 2024-63, a single annual certification covering the whole year is allowed, and plans must give you a reasonable period to submit it — deadlines can't land before a reasonable window before year-end. Check with HR or your recordkeeper for the form; payments on behalf of you by a spouse or parent can also qualify with certification.
Yes. Notice 2024-63 confirmed that voluntary payments — including extra principal payments and payments made while the loan is in deferment or forbearance — qualify, as long as they're payments on a qualified education loan and aren't reimbursed by another program.
Educational calculator only — not tax, legal, or investment advice. Match formulas, compensation definitions, and QSLP procedures are plan-specific; confirm details with your plan administrator.