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PSCA Study Finds Student Loan Debt May be a Barrier to Saving for Retirement

Plan Sponsors Are Finding Ways to Address


Hattie Greenan

The Plan Sponsor Council of America (PSCA) today announced the results of its 2016 study assessing student loan debt and plan sponsors’ response to the perceived notion that student debt affects employees’ participation in company retirement plans. 

Titled “The Impact of Student Loan Debt on Defined Contribution Retirement Plan Participation: Plan Sponsor Perspective,” the study surveyed PSCA organizational members in April 2016. The respondents’ organizations ranged in size from fewer than 50 plan participants to 5,000+. The average age of eligible employees was 41.6.

Among the PSCA survey’s findings:

  • Many Millennial employees say student debt keeps them from saving for retirement: 26.9 percent of employers reported a moderate degree of employees citing student loan debt as a barrier to saving and 8.9 percent cited a high degree.  25.3 percent cited a low degree.
  • Many employees will have at least some student debt: 62.3 percent of employers reported that more than half of their employees had a 4-year college degree or higher and 30.1 percent said between 10 and 50 percent of their employees were at the level.  According to the Pew Research Center, 69 percent of students graduating in 2011-12 borrowed money to finance their college education, compared to 49 percent of students graduating in 1992-93.
  • While many companies offer tuition reimbursement, a small number now offer student loan repayment programs: Tuition repayment plans continue to be popular with an overwhelming majority (70.1 percent) offering these benefits. Although only 1.4 percent offer student loan repayment plans, 11.5 percent are considering it and nearly 30 percent are undecided. 
  • Some employers are communicating about this issue: Nearly one-fourth of large companies address student loan debt with employees in some way, with 15.8 percent of all plans doing so.

The survey results come as multiple national studies by academic organizations show that student loan debt has reached record levels. According to EdVisors, the class of 2015 graduated with an average of $35,051 in student loan debt.

“As the cost of tuition and the significance of a diploma continue to rise, many employers are considering new benefit programs to help future job entrants with the cost of 4-year college degrees,” said Hattie Greenan, Director of Research.  “Employers may need to think about student loan debt in their efforts to educate Millennial employees about the benefits of saving for retirement, perhaps using a more holistic approach to financial education.”

PSCA will use the survey as a baseline for future studies to identify ways to address student loan debt through benefits strategy, she said. 

“Policy makers need to be aware that the cost of higher education is impacting the ability of a generation to save for retirement,” said Tony Verheyen, Executive Director of PSCA.  Governmental policy changes that plan sponsors are contemplating include offering tax credits to employers that implement a formal student loan repayment program.  

Click here to download the full survey report. 

For more information, please contact Hattie Greenan at

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The Plan Sponsor Council of America (PSCA) is a diverse, collaborative community of employee benefit plan sponsors, working together on behalf of more than six million employees to solve real problems, create positive change, and expand on the success of the employer-sponsored retirement system. With more than 1,000 members representing employers of all sizes, we offer a forum for comprehensive dialogue. By sharing our collective knowledge and experience as plan sponsors, PSCA also serves as a resource to policymakers, the media, and other stakeholders as part of our commitment to improving retirement security for millions of Americans. For more information, visit