Tax Tip #317

Student loan payments can affect your retirement savings even if your employer doesn't directly help pay the loans. 

Employers can treat certain qualified student loan payments as elective deferrals for purposes of making matching contributions to a workplace retirement plan. 

To qualify, you must be making student loan payments and have a direct legal obligation to repay the loan. Guarantors do not qualify.

Parents paying installments on Parent PLUS loans taken out for their children's education are also eligible. 

Total matched loan payments and direct 401(k) contributions combined cannot exceed the annual federal IRS deferral limit ($24,500 for 2026, excluding catch-up contributions).