Through 2025, employer-sponsored retirement plans are able to help workers “crush student debt” by offering a retirement plan match based on a qualified student loan payment, Candidly Founder and CEO Laurel Taylor said Tuesday at a conference.

The retirement symposium was sponsored by the Employee Benefit Research Institute and the Milken Institute.

The potential benefit comes from the Consolidated Appropriations Act, which was signed into law in 2020 as part of pandemic relief efforts. 

“We exist to crush student debt, empowering hardworking Americans to go beyond debt into savings and retirement savings,” Taylor said.

She said that Candidly, a financial wellness platform, is using artificial intelligence in several ways to reduce student debt by coupling large language models with portfolio optimization. A large language model is a deep learning algorithm that can perform a variety of tasks.

“And when combining that with portfolio optimization, specifically on the liability side of the balance sheet, in the backdrop of the program design that the plan’s sponsor is offering, that’s where we’ve really been able to drive significant impact,” Taylor said. 

Programs to reduce student debt over time are not limited to recent graduates, she noted.

“It’s Mom debt, it’s Dad debt, it’s spousal debt, it’s grandparent debt,” Taylor said. “And one of the primary ways that we’re using AI and large language models is a use case I think many of us in this audience can relate to.”

Eighty-percent of workers traditionally have tried to pay off student debt ahead of planning for retirement, she noted. 

The Setting Every Community Up for Retirement Enhancement Act 2.0, also known as SECURE 2.0 “is such an incredible, transformative breakthrough in a few different ways, but it primarily enables simultaneous progress,” Taylor said.

The act is “aimed at incentivizing small employers to offer retirement programs, through plan startup tax credits and further modifications to pooled employer plans and multiple employer plans,” attorney Jeffrey D. Smith, a partner at Fisher Phillips and a member of the firm’s Employee Benefits Practice Group, previously told the McKnight’s Business Daily. 

“At its highest level, plan sponsors are now able to offer a retirement match based on a qualified student loan payment,” Taylor said.

The average baby boomer — of the generation born between 1946 and 1964 — has approximately $106,000 in retirement savings, she said. But “someone just coming out of school, working for an employer who offers a match on their qualified student loan payments, even if they put zero dollars into their retirement savings for the duration of their career, they’d have $450,000 at the time of retirement,” Taylor added.

Not taking advantage of the opportunity leaves “free money” on the table, she said. 

Workers not using the matching funds “are not thinking about their 50-year-old self or 60- or 70-year-old self, to actually get into the plan for the first time or maximize for the first time, which is just so exciting,” Taylor said.

One provider recently told McKnight’s Senior Living that it is offering student debt repayment as an option to employees. Goodwin Living, a faith-based, not-for-profit long-term care organization in Alexandria, VA, is offering clinical staff members up to $5,250 annually in student loan repayment grants. 

“The idea that the Goodwin Living Foundation can ease the burden of student loans on our clinical team members is transformational,” Goodwin Living Foundation Board of Directors Chair Joan Renner said in a statement. “If you think about the challenges that older adults are facing — not just today’s older adults, but the older adults of the future — Goodwin Living is helping to ensure a strong talent pipeline to care for older adults not only now, but in the future.”