New federal law aims to ease the burden of student loan debt

This company offers a way to tackle student debt while also saving for retirement.

Nearly 43 million Americans owe a combined $1.8 trillion in student loans, and many expect to spend decades repaying those debts.

The numbers are overwhelming, but there is good news for borrowers.

A new federal law signed last month will allow employers to make contributions to employees’ retirement plans, when they use a percentage of their earnings to pay off their student debts.

Abbott was the first company to offer this benefit, with permission from the IRS more than four years ago. More than 2,200 employees have enrolled.

Divisional Vice President for Corporate Benefits and Wellness at Abbott, Diego Martinez, says it’s something that is much needed.

“With this new feature, basically, allows employees to continue to pay their loans and the companies will recognize those payments and will be able to match it with the 401K. It’s a great opportunity for those who are not participating today. It means they can start saving for retirement earlier,” Martinez said.

Martinez says this will be available next year for all companies to utilize.

“This will become available starting in 2024. Actually it works out well, because you need to work behind the scenes, the operation side of things, and communication and education to employees is important as well,” Martinez said.

Martinez says this would end having to choose between saving for retirement or paying student loans.