How to Pay for Your Student Loans and Plan for Retirement

What would you say if it was possible to make student loan payments that result in NBUSA contributing to your retirement account? Read on and find out how a new initiative from NBUSA offers a way to make that happen. A recent enhancement to our Nazarene 403(b) Retirement Savings Plan (Plan) now allows ministers to build their retirement savings while servicing their student loan debt—without negatively impacting their family budgets.

How Does It Work?

We implemented the new ministers match program (nbusa.org/ministers-match-resources) as of January 1, 2024, to address the lack of retirement readiness among so many of our clergy. Under the program, NBUSA makes quarterly matching contributions based on the eligibility of the church employer (in paying their NBUSA Fund budgets) and the level of local effort contributions by the minister and/or church to the minister’s Plan account. We recently added this student debt component to specifically help those ministers for whom student debt payments are a barrier to saving for retirement.

Our ability to do this was made possible through the provisions of what is known as the SECURE 2.0 Act passed by Congress in December 2022 which became effective this year. We worked with Fidelity (our Plan record keeper) over the past several months to make this additional matching opportunity available.

Fidelity’s Role

NBUSA does not see your confidential loan data because Fidelity utilizes a third-party to track the student loan payments of eligible participants and only reports the level of annual loan payments (both principal and interest) back to us.

The Process

If you are otherwise eligible for the new minister’s match program, it’s as simple as registering your student loans online through Fidelity’s NetBenefits portal, which is the same web access used to access your Plan account. After registering and supplying them with proof of your loans, Fidelity will go through a verification and approval process to determine your eligibility to participate. From that point forward, they will track the level of payments and report the annual total to NBUSA during the first quarter of the following year. We will calculate the corresponding NBUSA match dollars and make an annual contribution to your Plan account during the second quarter.

For ministers grappling with student debt, your top priority should be to pay it off as soon as possible. While you work on that, NBUSA will support your retirement savings efforts.

Constraints and Future Goals

Unlike the regular matching program which provides for up to four quarterly NBUSA matching contributions, the student loan matching portion is limited to a single, annual matching contribution. It’s a constraint of the new program we hope can be adjusted in the future to provide for more frequent matching, but that remains to be seen. Also, it’s important to know the amount of any debt forgiveness (such as under certain federal government programs) is not eligible to be matched. Only loans in the name of the participant and used for the education of the participant are eligible to be included in the program. This means loans incurred for the benefit of a dependent child are not eligible.

Eligibility and Contribution

Eligibility for the annual student loan match is the same as the quarterly local effort match. The applicable table for Local Church Ministers is shown here:

For a church who pays 100% of its NBSUA Fund budget, the minister is eligible for a match up to $2,500 ($5,000 x 50%). If there are no local effort contributions but the minister makes student loan payments of $3,600, NBUSA will match $1,800 ($3,600 x 50%).

Final Advice

For ministers grappling with student debt, your top priority should be to pay it off as soon as possible. While you work on that, NBUSA will support your retirement savings efforts by matching a portion of your student debt payments and any local effort contributions made by you and/or your local church employer. Achieving debt-free status is the fastest way to financial independence, will set you on the path to retire well, and will move you closer to achieving peace of mind about your finances in retirement. Once your student loans are gone, you can reallocate those amounts in your budget toward your retirement Plan account, and NBUSA will match those.

How to Enroll

As of this writing, the implementation process was still being finalized but should be in place by the time of publication. For more information, visit our website at nbusa.org or call us at 888.888.4656.

Kevin P. Gilmore serves as executive director of Nazarene Benefits USA for the Church of the Nazarene.