CHARLOTTE, N.C. — Last week the supreme court heard arguments regarding the Student Loan Forgiveness Program.
A handful of republican dominated states want the Supreme Court to permanently block the Biden Administration's Loan Forgiveness Program.
Those states argue that President Biden exceeded his legal authority when he implemented the program to cancel up to $20,000 in debt for people with certain federal student loans.
It could take months before a decision is made, but in the meantime, we are taking a look at how one new law might still be able to help students pay off those loans.
The Secure Act 2.0 that went into law on Jan. 1 makes some changes to existing rules and retirement accounts. It also could give a one-up to people struggling to pay student loans.
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It's a tough choice for some student loan borrowers. They could either put money into their 401K, save for retirement or make payments on their student loans. A provision in the Secure Act 2.0 might make it easier for borrowers to save for retirement and pay off their loans.
"In 2025, businesses will be able to contribute to your 401k if you pay down your student loans," Henry said.
According to the Secure Act 2.0, it works like a company match on 401k contributions. Companies can count payments made on student loans, match those payments, and put that money into employees' 401k.
"You pay a $200 payment down your student loan, and the company you work for puts $200 in your 401k," Henry said.
According to the Board of Governors of the Federal Reserve System, the total student debt balance, including federal and private loans, is more than $1.76 trillion.
For students struggling to choose savings or paying off loans, Henry tells WCNC this new law will help.
"That would encourage young people to actually pay down their student loans," Henry said.
The Secure Act 2.0 does not force companies to match student loans. That will be up to the companies if they want to participate or not.
Contact Meghan Bragg at mbragg@wcnc.com and follow her on Facebook, Twitter and Instagram.
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