Walgreens launches a student loan 401(k) match program for employees

Even though Walgreens had to close all health care clinics earlier this year citing “lack of profitability,” the drugstore chain is providing a generous new benefit for employees – a student loan 401(k) match program, available in January 2025. This new benefit, made possible with a SECURE 2.0 provision which took effect this year, will allow employees to qualify for company 401(k) match contributions as they pay down their student loans.

Walgreens’ announcement comes just as President Joe Biden’s 12-month student loan payment “on-ramp” period came to an end September 30, which means borrowers will face penalties and negative credit scores if they miss payments. In addition, Pres. Biden’s massive new Saving on a Valuable Education student loan forgiveness plan remains on hold, as GOP-led state lawsuits are making their way through the federal courts after the Supreme Court said no to unblocking the new program.

“We understand the burden student loan debt places on many of our team members, and this program empowers us to make a lasting impact on their financial well-being,” said Elizabeth Burger, EVP and Chief Human Resources Officer, Walgreens. “With this new benefit, our team members are no longer faced with the difficult choice between managing their student loan debt and investing in a secure financial future – now they can confidently do both.”

Roughly 30% of Walgreens employees are facing student debt  – “including more than half of our pharmacy team members – and according to the American Association of Colleges of Pharmacy, pharmacists have an average student loan debt of $170K,” according to Walgreens.

The Walgreens Student Loan 401(k) Match Program treats enrolled employee student loan payments like contributions to the Walgreens Retirement Savings Plan 401(k). Walgreens matches eligible student loan payments up to 4% of eligible pay. Team members are generally eligible for company matching contributions after one year plus 1,000 hours of service.

Under the new federal SECURE 2.0 provision, the student loan matching is designed to allow workers to address their student loans while continuing to save for retirement. “This innovative provision aligns with the changing financial priorities of the workforce, particularly Gen X and millennials, who are burdened by the highest percent of student loan obligations of any age group, and also comprise three quarters of the workforce,” said Harlyn Croland, head of business operations & strategy at Betterment at Work, one of the first firms to facilitate matching student loan payments for employers.

“By allowing employers to offer a 401(k) match on dollars their employees use to repay their loans, we could see a sharp increase in the number of savers. Employers can implement this benefit today, so it’s important to look for a provider who can support helping savers’ preparations for retirement.”

While workers welcome this new student loan matching program, many employers have been hesitant due to compliance concerns.

Related: SECURE 2.0: New ways to boost 401(k)s and support employees’ unique needs

Walgreens also recently enhanced its Walgreens Pharmacy Educational Assistance Program, which provides tuition assistance each year when eligible team members are enrolled in a professional pharmacy program while working for Walgreens as a pharmacy intern. For all years combined, the awards can be as much as $40,000 in total. In exchange for each award, pharmacy students are required to sign an agreement that includes a one-year work commitment as a registered pharmacist at Walgreens.