An analysis published this week by the Employee Benefit Research Institute (EBRI) finds that a SECURE 2.0 provision allowing employers to match qualified student loan payments could add between $11.2 billion and $20.2 billion in 401(k) contributions annually for workers with student debt.
The EBRI Issue Brief, “Understanding Who Would Benefit From a Student Loan Retirement Matching Program and by How Much,” examines which workers carry student debt, how it affects their defined contribution plan behavior and how much employer matching they are currently leaving on the table.
The report was authored by Craig Copeland, director of wealth research at EBRI, and was supported with supplemental funding from Candidly. EBRI explained that it does not lobby or take positions on specific policy proposals.
“Student loan debt can have an impact on retirement preparation that goes well beyond the size of the loan balance itself,” Copeland said in a statement. “This research shows the differences between those with and without student loans in participation in 401(k) plans, how much is contributed and ultimately how much is accumulated in these plans.
“The fact that these differences appear to persist over time highlights the interaction of student loan payments and retirement savings over a worker’s entire career.”
“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 Candidly.
“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.”
Digging into the details
The study found a prevalence of student loan debt as one in five 401(k) participants ages 25 to 69 carried educational debt. The burden is highest among younger workers as 35.7% of participants ages 25 to 29 had student loans, compared with 20.8% of those 40 to 44 and 12.9% of those 55 to 59.
Among workers ages 25 to 34, 75.5% of those with student loans participated in a defined contribution plan when eligible, versus 84.1% of their peers without loans.
But when student loan borrowers do participate, they contribute at lower rates. For some age groups, contribution rates for those with student debt were up to 14.7% lower than for those without, with the gap persisting across income levels.
Median 401(k) account balances for participants with student loan debt were significantly lower than those without. The gap was widest for those in their 40s, when borrowers’ median balances were 45% lower. The lower retirement account balances for student loan debt holders persisted across income and tenure cohorts.
In longitudinal comparisons, lower contribution rates and balances for borrowers remained even as savers aged. By their 50s and 60s, the difference between those with and without student loans was largely stable over the study period.
Missed employer matches, potential impact of SECURE 2.0
EBRI also quantified how many borrowers are failing to contribute enough to capture common employer matches and what that could mean under the SECURE 2.0 student loan matching provision.
- Below match thresholds: Among 401(k) participants with student loans:
- 39.2% contributed less than 4% of pay
- 49.7% contributed less than 5% of pay
- 61.3% contributed less than 6% of pay
- Employer match leverage: For participants contributing below these maximum match levels, the median ratio of employer-to-employee contributions was in the 60% to 70% range. For every $1 an employee contributed up to the match, they typically received $0.60 to $0.70 from the employer, a pattern that held across ages and incomes.
- Estimated upside from student loan matching: Assuming universal adoption of a student loan retirement matching feature for defined contribution plan-eligible workers ages 25 to 69 with student loans, EBRI estimates additional employer contributions of:
- $11.2 billion annually under one set of matching assumptions
- $20.2 billion annually under a higher matching threshold scenario
Why this matters for housing professionals
EBRI notes that student loan debt reached $1.66 trillion in 2026, up from $360 billion in 2005, and is increasingly a long-term burden, not just an issue for younger borrowers.
For mortgage and housing professionals, this debt load directly affects borrowers’ ability to save for down payments, qualify under debt-to-income (DTI) limits and build retirement assets alongside home equity.
The SECURE 2.0 student loan matching provision gives employers and plan sponsors a tool to improve retirement readiness for indebted workers who might otherwise forgo 401(k) contributions to prioritize loan payments.
For lenders and real estate agents, wider adoption of these programs could, over time, support stronger household balance sheets, potentially improving credit profiles and long-term housing stability among millennial and Gen Z borrowers.
EBRI’s findings suggest that employers evaluating student loan repayment and match designs should focus on younger and mid-career workers with loans. These groups are most likely to under-participate in defined contribution plans and miss matching dollars that could meaningfully improve retirement outcomes.
This article was generated using HousingWire Automation and reviewed by a HousingWire editor before publication.