Universal Adoption of Student Loan Match Program Could Add $20.2B Annually to DC Plans, per EBRI

Student loan debt has grown substantially over the past two decades, particularly—though not exclusively—for younger Americans.

Student loan debt reached $1.66 trillion at the end of the first quarter of 2026, up from $360 billion in 2005, according to the data from the Federal Reserve Bank of New York. While young borrowers continue to be the most affected, no demographic appears to be free of the burden, one that can severely limit retirement savings.

According to the Employee Benefit Research Institute’s issue brief, “Understanding Who Would Benefit From a Student Loan Retirement Matching Program and by How Much,” released today, roughly 20% of 401(k) plan participants aged 25 through 69 carried student loan debt from 2019 through 2023. Some 35.7% of participants aged 25 through 29 had student loan debt, compared with 20.8% of those aged 40 through 44 and 12.9% of those aged 55 through 59.

Over the same period, younger student debt borrowers were less likely to participate in a defined contribution plan when eligible—only 75.5% of those with student loans did so, compared with 84.1% of those their age without debt. Those who did participate generally had lower account balances: The difference in the median balance was 18.5% lower for those with student debt. But the largest difference in balance existed not among the youngest participants, but among those in their 40s: a 45% differential.

As a potential solution to close the gap, EBRI estimated the potential value of plan sponsors’ universal adoption of a student loan retirement matching program. The additional annual matching contributions to 401(k) plans for individuals ages 25 through 69 with student loan debt could total $11.2 billion under an assumed 4% maximum matching threshold and $20.2 billion under an assumed 6% maximum matching threshold.

Under the SECURE [Setting Every Community Up for Retirement Enhancement] 2.0 Act of 2022, employers may make matching contributions to a 401(k) when an employee makes student loan payments. Employers can also contribute up to $5,250 per individual per year toward an employee’s student loans without counting it as taxable income for the employee.

“For employees working to pay down student loan debt while also trying to prepare for retirement, access to an employer match can make a meaningful difference,” said Laurel Taylor, founder and CEO of student debt and savings optimization provide Candidly, in a statement. “This research helps quantify the scale of the challenge facing workers and employers. Student loan retirement matching programs can provide another way for employees to build retirement savings while meeting an important financial obligation, rather than feeling that one financial priority must come at the expense of the other.”