Wyden’s bill creates new matching contribution for employees repaying student loans
Washington, D.C. – Senate Finance Committee Ranking Member Ron Wyden, D-Ore., today rolled out legislation to give working Americans the flexibility to save for the future while having enough money to make their student loan repayments. Wyden’s introduction is in preparation for next year when it is expected that broader conversations on how to improve retirement policies will be debated in the 116th Congress.
Wyden’s bill, the Retirement Parity for Student Loans Act, allows employers to make “matching” contributions to a 401(k) retirement plan while their employees make student loan repayments. Under this proposal, recent graduates who cannot afford to save money above their student loan repayments would no longer have to forego the employer match.
“Millions of new college grads are buried under tens of thousands of dollars in student loan debt. Paying down student loans shouldn’t mean employees lose out on the opportunity to save for the future,” Wyden said. “Tax incentives for retirement savings must be designed to help workers build a nest egg, and that’s exactly what my legislation does.”
According to the Employee Benefit Research Institute, households headed by a person age 35 or less with a college degree and no student loan debt report median defined contribution account balances of $20,000—compared to $13,000 for similar families that have student loan debt.