EBRI prices the unused student-loan match at $20.2 billion

Student loan debt reached $1.66 trillion at the end of the first quarter of 2026, up from $360 billion in 2005, according to New York Fed data that opens the Employee Benefit Research Institute's new issue brief, “Understanding Who Would Benefit From a Student Loan Retirement Matching Program and by How Much.” Released today and reported by PLANADVISER, the brief prices the other side of the ledger: under universal adoption by plan sponsors, additional annual matching contributions to 401(k) plans for participants aged 25 through 69 with student loan debt would total $11.2 billion at an assumed 4% maximum matching threshold and $20.2 billion at an assumed 6% threshold.

That range sizes the student-loan match as a system-wide expense rather than a line in one plan's wellness budget, and it reframes the design question usefully: the match is an employer contribution that lands in a retirement account in place of the deferral a participant could not afford to make while servicing debt, not a payment to a lender.

Who carries the debt matters more than the total. Roughly 20% of 401(k) plan participants aged 25 through 69 carried student loan debt across 2019 through 2023, according to the brief, and incidence falls steeply with age—35.7% of participants aged 25 to 29 held such debt, against 20.8% of those aged 40 to 44 and 12.9% of those aged 55 to 59.

The effect shows up twice: among younger participants eligible for a defined contribution plan, 75.5% of those with student loans participated, compared with 84.1% of peers their age without debt, and those who did participate carried median account balances 18.5% below participants without debt.

The 45% differential in median balances between participants in their forties with and without student loan debt is the largest the brief reports, wider than the gap facing the youngest borrowers, and it should reorganize how this benefit gets sold. Marketing a loan match as a recruiting perk for early-career hires targets the age group where debt is most common, while the balance shortfall is largest in the forties, where a participant in her forties has far less time for compounding than the 25-year-old the pitch is aimed at.

The authority already exists: under SECURE 2.0, enacted in 2022, employers may make matching contributions to a 401(k) when an employee makes student loan payments, and may contribute up to $5,250 per individual per year toward an employee's student loans without the amount counting as taxable income. Both of EBRI's figures assume universal adoption at the stated thresholds, so the $9 billion spread between them is a match-rate assumption rather than a behavioral finding, and read as exposure rather than forecast the range makes one useful prediction: most plans that adopt will land near the low end, because the threshold is a budget decision before it is anything else.

What the brief does not price is the sponsor's side of the transaction: a loan match is an employer contribution made against a payment that never enters the plan, so the expense arrives without the participant deferral that ordinarily accompanies a match. The student-loan match is the highest-leverage, least-used design tool in SECURE 2.0, and sponsors that skip it are accepting permanent leakage; the cost structure is the likeliest reason they skip it, and the likeliest reason the low end of EBRI's range becomes the industry's default.

Administration is the other constraint, and it is a familiar one: PWD reported this month that Candidly's debt tool rides in on four recordkeeper pipelines, which locates the integration work with the recordkeeper rather than the sponsor, who gets a participant-facing feature without building payroll plumbing. The same pattern is visible on the way out of the plan, where the plan website now functions as the rollover desk.

Candidly founder and CEO Laurel Taylor said in a statement that access to an employer match can make a meaningful difference for employees paying down student loans while also preparing for retirement, and that the research quantifies the scale of the challenge facing workers and employers. Candidly sells student debt and savings optimization software, worth keeping in view when reading the endorsement; the arithmetic is EBRI's rather than the vendor's, and it points one direction: the population is large, the gap opens early, and the tool is already legal.

That decision belongs to plan committees. EBRI has supplied the population, the participation gap and the balance gap; what remains is a sponsor spending this plan year's cash on a contribution whose compounding the participant in her forties, the one carrying that 45% differential, has the least time to collect.