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DENVER — For many people, paying off student loan debt and saving for retirement can feel like an impossible task. A new law is giving companies an opportunity to change that.
The Secure 2.0 Act became law in 2022, but parts of it did not take effect until 2024. Section 110 of the Act allows companies to match contributions to an employee’s 401k or retirement account in exchange for student loan payments.
Candice Smith, founder of Boss Generation, a nonprofit that uses coaching to address the student debt crisis affecting Black women and women of color, What they do will make a big difference.” , connections, and resources to grow.
“Black women continue to face challenges such as wealth disparities, gender pay gaps, student debt, and lack of business capital,” Smith explained.
Black women have the highest average debt of all women, at $29,000, according to the Education Data Initiative.
Smith hopes this legislation will help change that.
“This is just one of many solutions that I think can be implemented to support Black women,” she explained. “So I think this is monumental and really puts us on a path to creating financial well-being and ultimately generational wealth.”
Companies like Chipotle are already implementing it. The company will match up to 4% of employees’ 401,000 if they pay their student loans.
“We’ve seen a very positive response to our new benefits that we announced last month,” Daniel Banks, Chipotle’s director of global benefits, said in a statement. I am enrolled in the student system.” Loan payments/401K match. ”
It’s unclear how many companies are offering this opportunity, but in addition to Chipotle, Verizon and Abbott are a few others with this program.
Given the retention effect this can have on companies, Smith expects more companies to implement this opportunity in the future.
“This will create an easier path to financial well-being and ultimately the generational wealth that many families deserve,” Smith added.
Recommended videos: All episodes of Next with Kyle Clark
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