New EBRI Research: 45% Lower 401(k) Balances; $10B+ Potential in Student Loan Matches
Workers in their 40s with student loan debt held median 401(k) balances about 45% below those of comparable participants without such debt, highlighting the potential retirement-savings cost of loan repayment, according to new research from the Employee Benefit Research Institute.
The nonprofit research group estimates that broad employer adoption of student loan retirement matching programs could generate $11.2 billion to $20.2 billion in additional 401(k) matching contributions annually for workers ages 25 to 69 with student debt. The range reflects assumed employer match caps of 4% and 6% of pay, respectively.
EBRI’s analysis examined participation, contribution rates and account balances among 401(k) participants with and without student loans, using anonymized loan data from TransUnion alongside retirement-plan data. The research was supported by student-loan benefits company Candidly.
One in five 401(k) participants ages 25 to 69 carried student loan debt, EBRI found. The debt was more prevalent among younger workers: 35.7% of participants ages 25 to 29 had student loans, compared with 20.8% of those ages 40 to 44 and 12.9% of those ages 55 to 59.
The gap began with plan participation. Among workers ages 25 to 34 who were eligible for a defined-contribution plan, 75.5% of those with student debt participated, compared with 84.1% of those without loans.
Borrowers who did participate generally saved at lower rates. For participants ages 50 to 54, median contribution rates for those with student debt were as much as 14.7% lower than for nonborrowers. EBRI said lower contribution rates persisted across income levels and over time.
Even among older workers, the savings difference remained material. Longitudinal analysis showed that while the gap narrowed somewhat, participants with student loans continued to have account balances roughly 30% lower than those without debt at older ages.
Student loan retirement matching programs, permitted under the SECURE 2.0 Act, allow employers to make retirement-plan matching contributions based on employees’ qualified student loan payments. Workers do not have to make corresponding elective 401(k) contributions to receive the match.
EBRI found that many borrowers could be eligible for additional employer contributions under such arrangements. Among 401(k) participants with student debt, 39.2% contributed less than 4% of income, 49.7% contributed less than 5%, and 61.3% contributed less than 6%. For borrowers contributing below common match limits, employer contributions equaled roughly 60% to 70% of employees’ own contributions at the median.
Student loan debt totaled $1.66 trillion at the end of the first quarter of 2026, up from $360 billion in 2005, EBRI said. The institute plans a second study assessing how student loan matching contributions could affect long-term retirement-income adequacy.