While President Biden's massive SAVE student loan forgiveness program is on hold, the Internal Revenue Service (IRS) has provided guidance for employers to help employees pay back their student loans while also saving for retirement. On Monday, the IRS issued the highly anticipated guidance for employers wanting to match 401(k) plan contributions to employee's student loan payments.

"If an employee isn't able to contribute to their retirement in the 401(k) plan, but they are making their student loan repayments … [employers] are still able to reward them with the employer matching contribution," said Rob Krupa, head of 401(k) compliance at Betterment.

The IRS Notice 2024-63 implements how employers can match contributions for employees based on their student loan payments. Beginning on December 31, 2023, SECURE 2.0 had permitted employers with a 401(k) plan, 403(b) plan, or SIMPLE IRA to offer matching contributions based on student loan payments, rather than solely on what participants contributed to their retirement plan.