Washington, D.C. – Congressmen Darin LaHood (R-IL) and Danny Davis (D-IL), members of the House Ways and Means Committee, reintroduced the Retirement Parity for Student Loans Act. The legislation would permit 401(k), 403(b), SIMPLE and governmental 457(b) retirement plans to make matching contributions to workers as if their student loan payments were salary reduction contributions. Thereby reducing student loan debt and building retirement savings. Workers could pay off debt while saving for retirement at the same time, rather than having to choose how to stretch their dollars.
The legislation is slated to be marked up by the House Ways and Means Committee tomorrow as part of the Securing a Strong Retirement Act of 2021 retirement legislation.
“Individuals who are working hard to pay off student loans shouldn’t lose out on opportunities to put away money for retirement,” said Rep. LaHood. “Our bipartisan legislation will allow workers to continue to make student loan payments while receiving employer matching contributions into their retirement plan. I am proud to join my Illinois and Ways and Means colleague Rep. Danny Davis to introduce this commonsense legislation that will provide greater financial security to Illinois residents.”
“Student loan debt has reached the $1.5 trillion figure. Americans carry more student loan debt than auto loans and credit cards. In addition, student loan debt disproportionately affects those entering the workforce and young professionals. Many employees cannot afford to pay student loan debt and contribute to a 401 (k) or retirement plan,” said Rep. Davis. “This approach provides additional resources to the employees to build their retirement savings while reducing their student loan debt”
Entry-level and low-salary employees face financial obstacles to significantly reduce their student loan debt and the absence of disposable income reduces the likelihood of adequate investment into retirement plans. This bill helps workers who cannot afford to both save for retirement and pay off their student loan debt.
Sen. Ron Wyden (D-OR) introduced similar legislation in the Senate. Reps. LaHood and Davis co-led similar legislation in the 116th Congress.