A new study by the Plan Sponsor Council of America on howstudent loan debt impactsparticipants’ retirement savings rates shows that only 1.4 percentof plan sponsors offer student loan repayment programs.

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Recently, several large sponsors made news in announcing the newbenefit offering. Fidelity, PwC, and Natixis are among thosesponsors that will contribute to help workers offset loan debt.

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The nascent benefit offering is a spin on tuition reimbursementprograms, which employers have traditionally used to encourageemployees to further their education. PSCA’s study shows that forall plan sizes, more than 70 percent have a tuition reimbursementprogram in place.

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While adoption of loan repayment programs has beenmarginal, the study shows that one in five sponsors with more than1,000 participants is considering adding a loan repaymentprogram.

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PSCA’s study underscores a reality retirement advocates havebeen pointing to for some time: that high levels of student debtdiscourage participants’ ability to adequately save forretirement.

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Of the participants surveyed in 143 plans across all sizesegments, 26 percent said student loan debt presented a “moderate”barrier to saving for retirement, while nearly 9 percent said itpresented a “high” barrier. About 25 percent said debt presented alow barrier. Nearly 40 percent reported being unsure.

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Read: 6 positive trends in student loandebt

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Overall, PSCA termed the findings as significant.

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“As the cost of tuition and the significance of a diplomacontinue to rise, many employers are considering new benefitprograms to help future job entrants with the cost of four-yearcollege degrees,” said Hattie Greenan, Director of Research a thePSCA, in a statement.

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“Employers may need to think about student loan debt in theirefforts to educate millennial employees about the benefits ofsaving for retirement, perhaps using a more holistic approach tofinancial education,” she added.

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PSCA conducted the study after it held a roundtable discussionwith sponsor members last year. Interpretations of the impact ofdebt on millennial savings rates varied.

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When accounting for millennials’ responses, the study seems tobetray similar discrepancies regarding how younger employeesperceive the impact of their debt on savings rates.

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In the financial and services industries, 16 percent and 15percent of millennials said their debt load created a high barrierto retirement investing, respectively.

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But in the insurance and retail sectors, no millennials saiddebt was a high barrier.

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All sectors saw notable levels of “unsure” responses, suggestingan overall lack of financial awareness. In the insurance and retailsector, where millennials did not report a high barrier, 67 percentand 65 percent of millennials were unsure whether debt obligationswere impeding retirement savings rates.

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The study cites data from EdVisors, which provides an onlineplatform for borrowers to compete for loans, which says the classof 2015 graduated with an average of $35,051 in student loan debt.Based on a 10-year replacement plan, $403 in monthly payments willbe required.

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The National Association of Colleges and Employers says theaverage staring salary for a graduate in 2014 was just over$48,000. Less taxes, PSCA estimates net income of about $37,000.Subtracting student loan debt, the average new hire is left withjust over $32,000 to live on, or less than $3,000 for all othermonthly expenses, notes PSCA.

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Nick Thornton

Nick Thornton is a financial writer covering retirement and health care issues for BenefitsPRO and ALM Media. He greatly enjoys learning from the vast minds in the legal, academic, advisory and money management communities when covering the retirement space. He's also written on international marketing trends, financial institution risk management, defense and energy issues, the restaurant industry in New York City, surfing, cigars, rum, travel, and fishing. When not writing, he's pushing into some land or water.