Sen. Ron Wyden (D-OR) is sponsoring legislation that seeks to help people save for retirement while repaying their student loans.
The Retirement Parity for Student Loans Act allows employers to contribute to a 401(k) retirement plan while their employees make student loan repayments. In other words, recent graduates who cannot afford to save money above their student loan repayments would not have to forego the employer match.
Households headed by a person age 35 or under with a college degree and no student loan debt report median defined contribution account balances of $30,000. According to the Employee Benefits Research Institute, similar families with student debt have average balances of $15,000.
“Right now, generations of Americans are struggling under the crushing burden of student debt. They are putting off buying a home, having children, and saving for retirement to pay down their student loans. As the cost of higher education continues to skyrocket, so does the debt,” Wyden, chair of the Senate Finance Committee, said. “Americans need to be able to save for retirement, even while repaying their loans. The Retirement Parity for Student Loans Act would give employers the ability to make matching contributions to their employees’ retirement, as the employees simultaneously make their student loan payments.”
This bill was co-sponsored by Sens. Maria Cantwell (D-WA), Sheldon Whitehouse (D-RI), Sherrod Brown (D-OH), and Ben Cardin (D-MD).