How New 2024 Student Loan Rules Help Employers Boost Employee Wellness and Loyalty
Want to take advantage of new legislation to capture some employee loyalty? The New Year brings some good news, especially for employers with lots of employees who are paying back student loans. Starting in 2024, the Secure 2.0 Act of 2022 lets employers amend their 401(k) plans so they can match employee contributions for “qualified student loan payments.”
So, for example, if an employee is making $500 payments on a qualified education loan, the employer may change its plan documents to treat that payment as if the employee had deferred $500 from their paycheck to a plan account in their name. The employee then also could qualify for an employer match into his or her plan account.
Secure 2.0 aims to address a central economic problem that student loan borrowers face: It’s tough to simultaneously pay back student loans and save for retirement or home ownership. And an astonishing number of US workers have student loans. The Federal Reserve estimates that more than 43 million Americans have some student loan debt, with the total amount owed by all borrowers sitting at about $1.7 trillion. The average borrower owes about $37,000, according to Fed statistics. (Source)
This recent legislation indicates that the United States government is clearly looking to partner with employers to help solve this problem. It’s also clear that employees are eager for support. A 2023 BrightPlan survey found that increased financial stress could be shifting employee priorities.
The BrightPlan survey reveals that financial wellness-related benefits are now the most desired innovative benefit, rising from No. 3 (29%) in 2021 to No. 1 (54%) this year. Nearly 9 out of 10 employees (88%) expect their employers to provide tools and resources to help them with their finances. Financial wellness benefits are therefore a useful benefit to attract and retain top talent.
As you look for benefits and solutions that improve the wellness of your employees, financial wellness is critical. “You can’t talk about employee wellness without addressing their financial wellness,” says Larry Robinson, Chief Product Officer at BrightPlan.
If you’re ready to learn more, read the summary of how BrightPlan’s holistic financial wellness can support you and your employees with student debt. Or, reach out to speak with one of BrightPlan’s financial wellness experts to see how our differentiated financial wellness solution helps reduce stress and solves real life financial problems for businesses and their employees.