Tips for School Systems Considering a Student Loan Matching Contribution Program

Q. What are some considerations for a school system that is thinking about putting in place a student loan matching contribution program? 

A. Following are some considerations for such a school system: 

• All IRS pre-approved public education plan documents permit employer matching contributions as a choice. 
• Since public education plans are not subject to ERISA, non-discrimination testing is not a concern; school districts can slice and dice match eligibility to target specific employee populations (i.e., teachers). 
• The matching contribution formula must accommodate participants who make elective deferrals or student loan payments. 
• TPAs with common remittance systems can support employee and employer contribution sources.