By Jessica Washington
Black Americans are drowning in student debt, and many of us struggle to keep up with the demands of paying off loans and saving for retirement. If youāre tired of choosing between dodging debt collectors forever and working until you croak, you might want to learn about this new retirement law.
Biden recently signed the Secure 2.0 bill, which makes some pretty important changes to how Americans can save for retirement. The most notable change is that employers can now match what someone spends on their student loan payments with retirement payments.
The lawĀ goes into effect in 2024, butĀ the implications are pretty astounding, especially forĀ Black Americans who hold a disproportionate amountĀ of this countryās student debt.
Black women, in-particular, carry a massive student debt burden. On average, Black women have more thanĀ $38,000Ā in student loan debt, according to Education Trust. And Black women with masterās degrees have overĀ $58,000Ā in federal student loans.
Student loan debt can be a massive inhibitor for saving for retirement. According to the Boston College Center for Retirement Research, Bachelorās degreeĀ holders with student debt at age 30Ā have significantly less retirement funds than people without student loans.
Making it so that people can simultaneously pay off their student loans and save for retirement could help close this gap.
However, one thing this law doesnāt solve, is the fact that many Black Americans, especially Black women, have employers that donāt offer retirement plans at all.
Geoffrey Sanzenbacher, an associate professor at Boston College and research fellow at the Center for Retirement Research, toldĀ DAME Magazine,Ā thatĀ women of color are less likely than white womenĀ to be offered retirement plans through their employer.
This bill would not force companies to offer student loan matching programs or other types of retirement programs.
Helping more people save for retirement is obviously a great idea! But itāll be worth watching how many employers actually take Congress and the White House up on this new initiative and whether the benefits reach the people who need it the most.