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Fidelity Introduces New Solution as Employers Embrace Innovative Benefits to Help Employees Boost Retirement Savings and Tackle Student Debt

Release Date: 26 Feb 2024
Research College Student Debt
  • Fidelity to Provide Access to Student Debt Benefits for More than 1.2 million Americans as Demand Grows More than 5x Since Passing of Secure 2.0
  • Student Debt Retirement Participants Projected to nearly Double both Retirement Balances and Anticipated Expenses
  • New Benefit Helps to Address Student Debt Pressures in the Workplace

Pay down debt or save for the future? This age-old dilemma now has an innovative solution as employers seek novel strategies to help employees struggling with boosting their retirement savings while also paying down student debt. In fact, 67% of recent college graduates burdened with student loan debt claiming this debt is preventing them from participating in major life milestones such as saving for retirement, getting married or buying a home[1]. As a market leader for student debt workplace benefits since 2016, Fidelity Investments®, is pleased to add to its award-winning student debt workplace offerings by introducing another benefit aimed at addressing the growing pressures of student debt – Student Debt Retirement.

“Student debt is a barrier that prevents so many Americans from participating in important life milestones – particularly saving for retirement,” says Jesse Moore, senior vice president, head of Student Debt at Fidelity Investments. “The introduction of a retirement-focused student debt benefit is a game-changing step forward for the benefits industry that will help millions on their path toward financial wellness and mobility.”

The benefit, made possible through the passage of SECURE 2.0, allows employers to use money already allocated for retirement plans to help employees save for retirement while paying down student debt. Employers continue to benefit from tax advantages, while providing their employees relief in paying down student debt and saving for the future. The benefit is put to practice when the employee makes a student debt payment. Their employer will then match a percentage of that payment in the form of a retirement plan contribution – allowing the employee to continue saving for retirement when they otherwise may not have been able to contribute. According to Fidelity data[2], participants enrolled in a student debt retirement benefit are projected to nearly double their 401(k) balances as well as double the retirement expenses they can cover by the time they retire. In the year ahead, Fidelity anticipates providing access to student debt benefits, including student debt retirement, for more than 1.2 million Americans.

For Illustrative purposes only. Mia enrolls in the Student Debt Retirement benefit, receiving their full match, and is projected to double Mike's future retirement balances at age 65 from $195,248 to $389,371. Since Mike cannot make contributions to the plan and receive their full match, given his student loan debt and the fact that he is not enrolled in the benefit. Additionally, Mia is projected to nearly double the amount of retirement expenses they can cover from 7.5% to 15%.

Since federal student loan payments resumed in October 2023, student debt repayment benefits have increasingly played a role in attracting and retaining talent, as well as improving employee financial well-being. In fact, Fidelity research[3] finds that employees consider student debt assistance as the top benefit contributing to their financial well-being. Additionally, retirement trend data from Fidelity’s student debt tool[4] shows many student loan borrowers used the federal payment pause to focus on retirement savings, with 72% of student loan borrowers contributing at least 5% to their 401(k), compared to only 63% prior to the payment pause.

Employers are also recognizing the positive impact of student debt benefits and the significant influence they can have on retirement savings. Industry research[5] shows that 67% of employers either already offer student loan debt benefits or intend to introduce them in the next 1-2 years, and at Fidelity, demand for implementing student debt benefits, whether it be Fidelity’s Student Debt Direct payment benefit the Student Debt Retirement benefit, has grown more than 5x since the passing of SECURE 2.0. A few examples of some of the companies working with Fidelity in 2024 to introduce Student Debt Retirement and provide access to student debt benefits for more than 1.2 million workers include LVMH, NewsCorp and Sephora.

“At News Corp we felt the ability to recognize student loan debt as a plan contribution for matching purposes allowed us to address potential inequities in retirement savings between those who carry a large student debt load for themselves or their children, and those who might have more money available to save during their working years,” says Marco Diaz, senior vice president, global head of benefits at NewsCorp.

For more information about employer student loan benefits and to help borrowers manage their student loan payments, Fidelity has assembled several resources:

About Fidelity Investments

Fidelity’s mission is to strengthen the financial well-being of our customers and deliver better outcomes for the clients and businesses we serve. Fidelity’s strength comes from the scale of our diversified, market-leading financial services businesses that serve individuals, families, employers, wealth management firms, and institutions. With assets under administration of $12.6 trillion, including discretionary assets of $4.9 trillion, we focus on meeting the unique needs of a diverse set of customers. Privately held for 77 years, Fidelity employs more than 74,000 associates across the United States, Ireland, and India. For more information, visit about Fidelity Investments, visit

  Views expressed are as of the date indicated, based on the information available at that time, and may change based on market or other conditions. Unless otherwise noted, the opinions provided are those of the speaker or author and not necessarily those of Fidelity Investments or its affiliates. Fidelity does not assume any duty to update any of the information.

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[2] Participants are projected to double their projected retirement balances from $195,248 to $389,371 by
participating in the Student Debt Retirement program. Additionally, they are projected to double the amount of
retirement expenses they can cover from 7.5% to 15%.

[3] Fidelity 2021 Employee and Employer Value of Benefits Research

[4] Data from Fidelity Investments Student Debt Tool as of June 30, 2023. Note:Data is representative of student debt tool users who uploaded their student loan information between August 2018 date and June 2023.

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