401k Student Debt Relief Program

401(k) Student Debt Relief Program

The 401(k) Student Debt Relief Program is designed to grant borrowers access to their participating 401(k) accounts specifically for the purpose of repaying student loans incurred during the pursuit of higher education or vocational training. Funds withdrawn for this purpose can be accessed tax- and penalty-free when used to repay loans from approved federal student loan programs.

Upon withdrawal and subsequent repayment of their student loans, borrowers will have the opportunity to replenish their 401(k) accounts with contributions exceeding the federal allowable limits for “Catch Up” contributions. This catch-up provision enables borrowers to invest a larger sum into their 401(k) accounts, facilitating the recovery of funds for use upon reaching the designated age for withdrawal. The catch-up amount may be determined based on the sum withdrawn or until the total amount has been fully restored.

The primary objective of this program is to alleviate the student loan debt burden for students and graduates who have pursued higher education. By offering debt relief to affected individuals and enabling catch-up funding, the program aims to mitigate future impacts on entitlement programs.