April 29,2021

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Wyden Bill Ensures Student Loan Debt Won’t Prevent Recent Graduates From Saving For Retirement

Wyden’s bill creates new matching contribution for employees repaying student loans

Washington, D.C. – Senate Finance Committee Chair Ron Wyden, D-Ore., today unveiled legislation to ensure working Americans are able to save for retirement as they repay their student loans.

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.

“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 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. While I support student debt forgiveness, it’s important to put every option on the table to relieve this burden for millions of Americans. This bill is an important tool in the tool box.”  

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 $30,000—compared to $15,000 for similar families that have student loan debt.

This bill was cosponsored by U.S. Sens. Maria Cantwell, D-Wash., Sheldon Whitehouse, D-R.I., Sherrod Brown, D-Ohio, and Ben Cardin, D-Md.

A copy of the bill text is available here.

A one-page summary is available here.