Perspectives : DC Retirement | September 06, 2022

What to know before adopting an in-plan student loan benefit

Read time: 2 min

Congress may allow 401(k) plans to treat student loan repayments as if they were elective deferrals, permitting employers to make matching contributions. Legislation, referred to as SECURE 2.0, could be signed into law late in 2022 or in 2023.

Knowing this, many companies are asking: Should the student debt benefit remain outside of the employer-sponsored retirement plan, be integrated into the plan, or should it combine both?

Providing a student loan reimbursement program or including the benefit within a retirement plan holds promise for employers looking to enhance their financial wellness offerings, according to a new commentary from Vanguard.

Plan sponsors may create an integrated financial wellness experience that focuses on student loan debt, recommending solutions to lower payments through refinancing and/or prioritizing the debt among other financial imperatives.

Vanguard sees the benefits of offering a student loan repayment program and has partnered with a third-party vendor to provide such services as a component of our comprehensive financial wellness programs both within and outside the 401(k) plan.

However, we believe plan sponsors should consider several factors, including cost, administrative complexities, and the current saving behaviors of their participants, before selecting an in-plan student loan benefit for their employees. 


  • All investing is subject to risk, including the possible loss of the money you invest.
  • Diversification does not ensure a profit or protect against a loss.
  • Vanguard commentary should not be considered legal advice on specific legal issues or a substitute for legal counsel.