Many adults in the United States find themselves juggling two major financial responsibilities: paying off student loans and preparing for retirement. With millions of borrowers carrying student loan balances well into midlife and beyond, it’s understandable that saving for the future can sometimes fall behind. At the same time, surveys show that many people—especially high-net-worth professionals and those in the middle of their careers—feel like they’re not saving enough for retirement.

As we recognize Financial Aid Awareness Month this February, it’s a great opportunity to look at how these two priorities can work together. Whether you’re responsible for Parent PLUS loans, paying down your own student debt, or financially supporting your child’s education, there are practical ways to move forward without sacrificing long-term financial security.

Leverage Employer Benefits Through the SECURE 2.0 Act

A key resource now available to borrowers is the retirement plan match on student loan payments established by the SECURE 2.0 Act. This benefit allows employers to treat your qualifying student loan payments as if they were retirement plan contributions. That means your employer can contribute to your 401(k) or similar plan even if you aren’t currently adding your own money to the account.

This feature is particularly valuable because it helps you grow retirement savings while you stay focused on debt repayment. You’re able to benefit from compounding returns without having to redirect cash away from your student loan payments. For adults in the early or middle stages of their careers, this dual progress can reduce financial stress and support long-term planning goals.

If you think this program may be available to you, reach out to your HR department or plan administrator to confirm eligibility and learn how to enroll.

Use Extra Payments Wisely When Reducing Debt

Making additional payments toward your student loans can be an effective way to reduce what you owe, but only if the payments are applied correctly. Many loan servicers automatically direct extra amounts toward upcoming scheduled payments instead of reducing the principal balance. While this may make you appear ahead on your payment schedule, it doesn’t help lower long-term interest costs.

To truly accelerate your payoff timeline, request in writing that your additional payments go directly toward the principal. This simple adjustment can shorten the length of your loan and lower the total interest you pay over time. If you’re unsure how your payments are currently being applied, call your servicer and ask for a detailed explanation, then keep documentation of your request for your records.

Lower Student Loan Payments by Contributing to Retirement

Borrowers using income-driven repayment (IDR) plans can benefit from contributing to a pre-tax retirement account, such as a 401(k), 403(b), or SIMPLE IRA. Since IDR payments are based on your adjusted gross income (AGI), lowering your AGI through retirement savings can reduce your monthly student loan obligation.

This approach offers two important advantages. First, you’re building tax-deferred retirement savings. Second, you may lower your monthly payments, which can be especially beneficial for borrowers working toward Public Service Loan Forgiveness or similar long-term forgiveness options. For wealth advisors, retirement planners, and high-net-worth individuals managing multiple financial goals, this strategy can meaningfully influence overall results.

Include Long-Term Forgiveness in Your Financial Strategy

For borrowers eligible for forgiveness programs that span 10 to 25 years, it’s important to evaluate whether accelerating loan repayment is always the best choice. While paying down debt quickly can feel productive, it may reduce the benefit of future forgiveness and limit your ability to contribute to retirement savings.

If forgiveness is part of your plan, increasing retirement contributions may lower your AGI and monthly payments, which can lead to a larger remaining balance being forgiven at the end of your repayment term. Meanwhile, your retirement savings continue to grow tax-deferred, strengthening your long-term financial foundation.

Thoughtful Planning Can Help You Achieve Both Goals

You don’t have to choose between repaying your student loans and preparing for retirement. With the right strategies, it’s possible to make consistent progress on both. Depending on your situation, that might include confirming access to student loan payment matching under the SECURE 2.0 Act, making sure extra payments reduce your principal, increasing pre-tax retirement contributions while on an IDR plan, or evaluating whether forgiveness programs may apply to you.

For individuals with complex financial situations, multiple income sources, or high-net-worth considerations, consulting a financial professional can be especially beneficial. A qualified advisor can help you review your options, understand tax implications, and create a coordinated plan that supports both immediate and long-term goals.

The Takeaway: You Can Build Retirement Savings While Paying Off Loans

Although it’s a common misconception that you must choose one goal over the other, the reality is that both can be managed with an intentional strategy. Today’s tools—including the SECURE 2.0 Act, IDR plans, and forgiveness programs—make it more feasible than ever to balance debt repayment with retirement planning.

Financial Aid Awareness Month serves as a reminder that financial education is important at every life stage. If you’re working toward a future that includes both reduced student loan debt and a strong retirement foundation, now is a great moment to evaluate your progress and outline next steps.

If you’d like guidance reviewing your finances or building a personalized plan, don’t hesitate to reach out. With the right approach, you can reduce your loan burden, strengthen your retirement outlook, and move forward with confidence.