How Student Loan Payments Can Now Count Toward 401(k) Matching: What Employers Need to Know About SECURE Act 2.0’s QSLP Provision
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How Student Loan Payments Can Now Count Toward 401(k) Matching: What Employers Need to Know About SECURE Act 2.0’s QSLP Provision

One of the most innovative changes introduced by the SECURE 2.0 Act is the Qualified Student Loan Payment (QSLP) provision. This new rule allows employers to make matching contributions to a retirement plan—such as a 401(k)—based on employees’ student loan repayments.

For many employees, paying off student loans can take priority over contributing to a retirement plan. The QSLP provision helps ensure that workers who focus on paying down their debt don’t miss out on valuable employer retirement contributions.

How the QSLP Match Works

✅ Eligibility

Employees who are eligible for standard 401(k) matching contributions are automatically eligible for QSLP matches. Employers cannot pick and choose who gets the benefit—it must be offered uniformly to all eligible employees.

✅ Qualified Student Loan Payments

To qualify, the loan must be a qualified education loan under IRS rules. The debt must have been incurred by the employee, their spouse, or a dependent—and the employee must be legally obligated to repay it.

✅ Matching Contributions

Employers can treat qualified student loan payments as if they were employee deferrals, and match them accordingly. The match formula, eligibility criteria, and vesting schedule must align with those used for standard retirement plan matches.

✅ Certification Requirements

Employees must annually certify that they made student loan payments in order to receive the match. The IRS offers flexibility here, allowing for self-certification methods depending on the plan’s setup.

Implementation Considerations for Employers

🔧 Eligible Plans

This provision applies to a wide range of retirement plans:

  • 401(k)

  • 403(b)

  • Governmental 457(b)

  • SIMPLE IRAs

🔧 Contribution Limits

Matching contributions made under the QSLP provision count toward the IRS annual contribution limits, just like regular employer matches.

🔧 Administrative Procedures

Employers must establish reasonable and documented procedures for collecting employee certifications, setting deadlines, and determining how often QSLP matches are calculated and made (e.g., monthly, quarterly, or annually).

Why This Matters

🎯 For Employees

This rule is a game-changer for employees carrying student debt. It means they no longer have to choose between paying down loans and saving for retirement—they can do both, with help from their employer.

🎯 For Employers

Offering a QSLP match can enhance your benefits package and help attract and retain top talent—particularly younger employees burdened by student loans.

Final Thoughts

The QSLP provision of SECURE Act 2.0 gives employers a unique opportunity to support their workforce’s financial wellness while still encouraging long-term retirement savings. It’s a win-win strategy that aligns debt reduction with financial security.

If you’re interested in adding a QSLP match to your retirement plan or want help setting up the right procedures, our team at Birdseye Pension Group is here to help.

👉 Contact us today for a free consultation on how to bring this powerful new benefit to your team.

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