Key Points

• More companies are choosing to offer a 401(k) match to workers who are paying off their student loans.

• A recent law, Secure 2.0, allowed employers to essentially treat student loan payments as a 401(k) contribution in order to provide a match, starting in 2024.

• Large companies like Kraft, Workday, News Corp. and Comcast are early adopters.

• However, most employers do not yet offer or plan to offer the benefit.

Companies can now offer their workers a “match” of their student loan payments in the form of a contribution to their 401(k) plan, and a small but growing number of employers are taking advantage of the option.

Traditionally, companies have only paid a 401(k) match to workers based on their voluntary contributions to the workplace retirement plan. A worker who chooses to save 3% of their annual salary in a 401(k) plan could get a 3% match from their employer, for example.

Companies can now treat a worker’s student loan payments as an elective contribution to the 401(k) plan.

Federal law allows employers to offer a match based on a worker’s payments toward student debt. Workers generally do not have to contribute to the 401(k) plan to qualify for the funds.

The measure, part of a package of retirement changes called Secure 2.0, came into effect from 2024.

Kraft, Workday among companies adding the benefit

The policy’s goal is to help workers address two competing financial obligations: paying off debt and simultaneously saving for retirement.

More than 100 companies have implemented the benefit to date, covering nearly 1.5 million eligible employees, according to data from Fidelity, the administrator of the nation’s largest 401(k) plan.

They include “some of the largest companies in America,” such as Kraft, Workday and News Corp., Jesse Moore, senior vice president and head of student debt at Fidelity, said in an email.

“Many more [are] showing strong interest in offering it in 2025,” Moore said.

About 5% of employers have already added the benefit, according to results of an upcoming survey from Alight, one of the largest retirement plan administrators in the United States.

An additional 12% of employers say they are “very likely” to adopt it by 2025, while 29% are “moderately likely” to do so, according to Alight. In September it surveyed 122 employers, with a total of 11 million workers.

Interest in the benefit has grown largely because of Secure 2.0, Rob Austin, head of thought leadership at Alight, said in an email.

Financial help and worker retention

Comcast is among employers that will add a 401(k) student loan matching benefit in 2025. A Comcast spokesperson said offering the benefit will help workers “manage their long-term financial well-being” in a tax-efficient manner.

About 90,000 U.S. employees are eligible for the match, with up to 6% of their annual income eligible, the spokesperson said.

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Some companies also see the matching program as a way to attract and retain college graduates in competitive fields, experts said.

“We’ve heard from many employees who are having trouble with student loans,” especially those early in their careers, the Comcast spokesperson said. “We’re trying to build a value proposition that meets [workers’] needs.”

The student loan measure is also available to companies that sponsor other types of workplace retirement plans, such as 403(b) or government 457(b) plans or SIMPLE IRAs, according to the Internal Revenue Service.

How the student loan benefit works

The maximum amount of “qualified student loan payments” is generally the annual salary contribution or deferral limit, according to Brian Dobbis, retirement solutions leader at Lord Abbett, a money manager. That 401(k) limit is $23,000 in 2024 for workers under age 50.

Here’s a general example: A 30-year-old participates in a 401(k) plan in 2024. The worker chooses to contribute $18,000 to the plan. If they also pay $8,000 on their student loans that year, only $5,000 ($23,000 minus $18,000) of those payments are eligible to be matched, Dobbis said.

The worker’s maximum match amount is dictated by employers’ respective match limit, commonly set between 3% and 6% of a worker’s annual salary.

Of course, companies can structure the benefit somewhat differently from each other.

Companies had the benefit prior to Secure 2.0

Employers had begun offering a student loan benefit tied to the 401(k) even before Secure 2.0.

Abbott, a health technology company, has provided a similar benefit since 2018, through its “Freedom 2 Save” program, which was thought to be the first of its kind. The company obtained a private letter from the IRS to do so.

Since then, more companies have followed.

In 2022, for example, about 1% of all 401(k) plans offered or planned to offer a match based on student loan payments, according to an annual survey by the Plan Sponsor Council of America, a trade group. By 2023, that share had risen to about 2%, according to the group’s latest survey of 709 employers, which will be published this month.

“Pharmaceutical companies are among the early adopters, most likely because Abbott pioneered this idea and the competition followed,” said Alight’s Austin.

The proportion rose the most (to nearly 5% in 2023 from 2% in 2022) among the largest companies, or those with more than 5,000 employees, PSCA found.

There appears to have been “increased interest” among companies with a large cohort of college-educated workers, said Hattie Greenan, research director at PSCA.

“We will continue to see this number slowly increase as those companies look for ways to differentiate their benefits packages to compete for top talent and as some of the administrative complexities are resolved,” Greenan said.

Why many firms aren’t adding a student loan match

However, most companies remain on the sidelines.

For example, 55% of employers say they are “not at all likely” to add the provision in 2025, according to the Alight survey.

There are a few reasons why companies may not want to implement the measure, said Ellen Lander, founder of Renaissance Benefit Advisors Group, based in Pearl River, New York.

For one thing, employers may already offer a different educational benefit to their workforce. Additionally, companies, especially those with much higher incomes, may not feel they need the benefit if there is no evidence of lagging 401(k) plan participation, even among those with student debt, he said.

Some employers may already make a non-elective contribution to workers each year, such as a profit-sharing contribution, even to workers who don’t participate in the company’s 401(k) plan, Lander said.

Lander said one of his clients considered the student loan policy “unfair” because it applied only to a certain subset of workers, namely those with student debt.

He said none of his clients have decided to adopt him yet.

“I hope every client talks about it with their consultant,” Lander said. “To me, it’s something you should definitely consider. And then you have to get into the weeds: do you need it?

Disclosure: Comcast owns CNBC’s parent company, NBCUniversal.