An IRS Ruling Could Open Up 401(k) Matches for Student Loans, Medical Payments [Video]

The IRS has allowed workers at one company use to use 401(k) matching contributions to pay for medical and student loan expenses, indicating the possibility that others might someday be able to do the same.

The agency in an August ruling determined that a company, which it didn’t name, could allow its workers to allocate matching contribution to their 401(k), retiree health reimbursement arrangement (HRA), health savings account (HSA), or an educational assistance program used to pay off student loans.

During open enrollment, employees would make an annual election for those matching contributions. If the employee doesn’t make a choice, those contributions are allocated to their 401(k).

While the private letter ruling only applies to one company, under the Secure 2.0 Act—a federal retirement law passed in 2022—all companies can now offer employees matching contributions to pay off student loans. This change went into effect at the beginning of 2024, but it’s unclear …